inversecondemnation.com

Happy 97th Birthday, Nectow v. City of Cambridge!

It was on this day in 1928 when the U.S. Supreme Court issued its second most famous decision about zoning, Nectow v. City of Cambridge., 277 U.S. 183 (1928). 

We say "second" because everyone knows that the first is the Court's decision issued just two years earlier which generally upheld comprehensive use, height, and density regulations as a valid exercise of the government's police power to regulate property uses to further the public health, safety, welfare, or morals. See Village of Euclid v. Ambler Realty Co., 272 U S. 365 (1926). 

Partly because of the hype surrounding Euclid and the broad governmental embrace of exclusionary land use policies that Euclid unleashed, we think that Nectow has not received the attention it is due. After all, it should be seen as the companion case to Euclid: it was authored by same Justice who wrote Euclid (Justice Sutherland), and there's a straight line between all three parts of the Court's 1920's land use trilogy (Mahon, Euclid, and Nectow), two of which are strong reaffirmations of property rights. 

But today, Nectow is often dismissed as a byproduct of an earlier time, Lochnering of the substantive due process rational basis test, or even just too archaic to pay attention to.

But unlike Euclid, which was a facial challenge to zoning generally, Nectow was an as-applied challenge, asserting that placing some of Nectow's land in a residential zone -- and thereby causing a contract for sale of the land for non-residential uses to be cancelled -- was arbitrary and capricious. A master appointed to find facts determined the residential designation was out of sync with the mixed uses in the surrounding area. But the Supreme Judicial Court of Massachusetts took Euclid and Justice Sutherland at their word and concluded "who are we, mere judges, to question what Cambridge's zoning officials say is in the public interest?" (We're paraphrasing of course, but that was the vibe.)

But Justice Sutherland was all "hang on, pay attention to what we said in Euclid; that wasn't us telling courts to be poodles." (Paraphrasing, again):

Nevertheless, if that were all, we should not be warranted in substituting our judgment for that of the zoning authorities primarily charged with the duty and responsibility of determining the question. Zahn v. Board of Public Works, 274 U. S. 325, 328, 47 S. Ct. 594, 71 L. Ed. 1074, and cases cited. But that is not all. The governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare. Euclid v. Ambler Co., supra, p. 395 (47 S. Ct. 114). Here, the express finding of the master, already quoted, confirmed by the court below, is that the health, safety, convenience, and general welfare of the inhabitants of the part of the city affected will not be promoted by the disposition made by the ordinance of the locus in question. This finding of the master, after a hearing and an inspection of the entire area affected, supported, as we think it is, by other findings of fact, is determinative of the case. That the invasion of the property of plaintiff in error was serious and highly injurious is clearly established; and, since a necessary basis for the support of that invasion is wanting, the action of the zoning authorities comes within the ban of the Fourteenth Amendment and cannot be sustained.

 

So yes, zoning as a concept is within the police power, but we must keep at the forefront the core principle that property rights are to be respected. Facts, and not some vague incantation of the rational basis test should serve as the standard 

As James Metzenbaum, the lawyer who represented the Village of Euclid later wrote:

It is essential that there be kept in mind the ever-true doctrine that the owner of property does have some inalienable rights. A corollary of this doctrine is that it is the duty of the lawyer to fight for the preservation of such rights and not to permit overly zealous zoning experts who draft ordinances nor obliging Councils who pass them, to promulgate legislation which is unreasonable or which unlawfully tends toward the divestment of the property owners' constitutional rights.

See James Metzenbaum, The History of Zoning - A Thumbnail Sketch, 9 W. Res. L. Rev. 36, 42 (1957).

So here's how we see it: go ahead and zone, government (Euclid). But do it carefully: it's not carte blanche to do anything you want, and its gotta make actual sense (Nectow). And even if it does makes sense but nonetheless deprives the property owner of essential rights, you have to pay for the privilege (Mahon). 

Oh no, you say, if we revive Nectow's recognition of restraints on the police power what shall become of zoning? It doesn't mean the end, only a reasonable limits, bounded by property rights. You know what term is in the Constitution? "Private property." And what term isn't? "Police power." Sure, the term, like eminent domain, may be an inherent power and didn't need to be mentioned in the text, only limited, we suppose. But aren't we more concerned with protecting an individual's freedom to choose how to use her property, unless there's some articulable harm that can be shown, and not presumed?

After all, the whole point of government isn't primarily to ensure the public health, safety, welfare or morals, but to secure individual rights:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed

And rest easy: zoning isn't the be-all-end-all of municipal land use regulation. Especially when properly constrained by the Constitution. Professor Siegan's seminal book explains why. 

So Happy Birthday, Nectow. Ninety-seven years young and looking better each day!

SCOTUS Hat Trick? Houseboat Guy Returns For Shot At Lucas Ripeness

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

This is Fane Lozman. You know his name. Yes, the guy who has taken on the City of Riviera Beach, Florida twice at the Supreme Court, and is now coming back for a third shot on goal. Houseboat guy. Public hearing gadfly guy. And now, maybe the ripeness guy.

Lozman has filed a cert petition asking the Court to review the Eleventh Circuit's opinion which dismissed his regulatory takings claim as unripe.

Here's the Questions Presented:

Fane Lozman has a contentious relationship with the City of Riviera Beach, Florida. The City’s mistreatment of Mr. Lozman has twice required this Court’s intervention. See Lozman v. City of Riviera Beach, 568 U.S. 115 (2013); Lozman v. City of Riviera Beach, 585 U.S. 87 (2018).

In this third chapter, Mr. Lozman was forced to sue the City because its land-use restrictions have de prived his waterfront property of all economically ben eficial use, causing a taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The controlling City ordinance is clear: He can use this property for “[p]rivate residential fishing or viewing plat- forms” and small “docks for non-motorized boats,” and nothing else. Yet the Eleventh Circuit held Mr. Lozman’s Lucas claim unripe. In the court’s view, because these scant private uses are permissible, Mr. Lozman must apply to the City for a “final decision” on how he can use his property.

The questions presented are:

1. Whether a claim that a local ordinance effected a regulatory taking upon enactment remains unripe until the landowner asks the local government for permission to develop his property in ways the ordinance plainly prohibits.

2. Whether a regulation that forbids any economically beneficial use causes a taking under Lucas, regardless of the property’s residual value

The petition has garnered a ton of amicus support.

The cert-stage briefing isn't quite done yet, with (presumably) Lozman's reply on the way. Then we see where this one goes.

Stay tuned.

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

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

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

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

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

CA6: The Predeprivation Hearing Required By Due Process Can't Just Exist On Paper (And An Informal, And Possibly Made-Up Chance To Negotiate Isn't Enough)

We've had this one in our queue for a bit, but it seems now is a good time to lay out the U.S. Court of Appeals for the Sixth Circuit's opinion in McIntosh v. Madisonville, No. 24-5383 (Jan. 21, 2025). After all, the Due Process Clause seems to be in the news a lot lately, and this case explains what process is due property owners before they are deprived of that property.

Here's the story. The city, after a code enforcement officer's inspection (responding to a tenant complaint) declared that one of McIntosh's mobile homes had mold and deemed it unsafe and unsalvageable. Letter followed notifying the owner of the city's condemnation of the property, advising him that he had 30 days to submit plans for getting things in order, or else the city was going to tear it down. The city also put notice on the property itself. Both sides agree that the owner got these notices, and that he wrote back.

But that's about all they agreed on. What followed seems like a pretty typical scenario, where the owner claims to have made efforts, all of which were fruitless. McIntosh says he tried to contact city officials, but got no responses except for if he "didn't like [the decision], sue them." Slip op. at 3. Another call got a similar response: "When Mr. McIntosh again called Wallace’s office about his letter, Phillips told him: 'We do not care what your letter said . . . I’m going to tear that house down.'" Slip op. at 4. Apparently, the owner checked the city's code which said that if you disagreed with a decision like this you must administratively appeal to the City Board of Adjustment.  Problem is, the city's doesn't have a Board of Adjustment. The owner also asserted that no inspector ever came back to see whether his repairs were satisfactory.

The city said otherwise: no, the owner didn't contact us; we offered to work with this fellow; we did reinspect the property but found only minor, cosmetic repairs. Pretty wide gap in those stories. But a "month after the initial condemnation, the time for demolition arrived." Id.

Next up, a state court § 1983 due process claim and a state law claim for trespass. The city removed and sought summary judgment: we provided enough notice and an opportunity to be heard. The district court granted the motion, concluding that the city had done enough. 

The Sixth Circuit reversed. First, it agreed with the district court that McIntosh got enough predeprivation notice to tell him that something was up, and that he better respond. Slip op. at 5. Notice doesn't need to be all that specific, and here it wasn't. And there doesn't need to be some kind of roadmap to what to do next if the next stop is a courtroom. [Barista's note: this analysis is consistent with those cases where the courts hold that if a property owner is going to be required to chase administrative procedures, the government should provide a roadmap.]

But what about a predeprivation hearing of some kind? Here, the court agreed with the owner. There wasn't an emergency, so a hearing was required. Yes, what form that hearing took may not be fixed but "some kind of hearing" is an "imperative." Slip op. at 6. Here, the "key problem is that the City Code says that property owners have a right to a hearing before the Local Appeals board over a grievance against 'any decision of the Building Inspector[.]'" Slip op. at 7. And as we noted above, the city doesn't have an Appeals Board. Yeah, we meant to get around to it, but ultimately decided that our informal process was enough:

While Wallace agreed that § 150.13 “does call for an appeals council or appeals board for appealing any” of his decisions, he insisted that the City did not have one. R.24-6 at 10. When pressed about this deviation from the municipal code, Wallace explained that city officials have considered setting one up but concluded it “didn’t feel . . . necessary” given other, more informal means of disputing a condemnation. R.24-6 at 10. This could be why, when Mr. McIntosh asked an employee of Wallace’s office how to appeal (albeit, to what he called the “Board of Adjustment”), she told Mr. McIntosh that no such board existed. R.24-5 at 10. Wallace’s certainty that no board existed and his employee’s response to the McIntoshes’ inquiry along the same lines would permit a reasonable juror to characterize the City’s statutory promise of a hearing as illusory.

Id.

But who needs compliance with the law, the city argued. Everyone knows that's not the way we do things around here. We have "less formal opportunities for a pre-deprivation hearing[.]" Id. Shame on McIntosh for not knowing about this and for not "sitting down" with us for a "conversation." Id.

The court was as incredulous at this as you might expect.

Let us assume for the sake of argument that this option—not mentioned in the City’s generally applicable laws—constitutes an adequate chance to be heard. Problems remain even still. The only evidence of such a policy arises from Wallace’s testimony, not a provision in the City’s Code. Unlike appeals processes engrained in statutes, this “procedure, if it existed at all, depended on the vagaries of word of mouth referral,” creating the imperative that the City tell the McIntoshes about this opportunity. Memphis Light, 436 U.S. at 14 n.14 (quotation omitted); see Palmer, 479 F.2d at 168 (rejecting the claim that “the mere theoretical possibility of informal resolution” with company figures—a possibility unknown to customers—meets due process standards). Yet neither the condemnation flyer nor its related letter nor the statements of any official conveyed to the McIntoshes the opportunity to speak with Wallace and the City Attorney about the proposed demolition. Making matters worse, none of those sources ever informed the McIntoshes precisely what provisions of the municipal code their unit violated—and had to be repaired. A reasonable juror could find that no such policy existed or that, even if it did, the City never told the property owners about it.

Slip op. at 7-8.

At bottom, there was a factual dispute about what the owner knew about this, so the court held it was wrong to enter summary judgment while those facts remained in dispute.

By the way, the owner's due process claim was not limited to procedural due process. He also challenged the city's condemnation as arbitrary and capricious. You can guess how well that went. This is a "routine" exercise of police power and the city "condemned the home due to its mold, moisture, and structural weaknessess[.]" Slip op. at 9. District court's summary judgment on substantive due process affirmed.

McIntosh v. City of Madisonville, No. 24-5383 (6th Cir. Jan. 21, 2025)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

_____________________________

NY Zoning Law Mandating Contributions Deemed an Unconstitutional Taking

by Jennifer Polovetsky

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We'll see you there.

2025 Rocky Mountain Land Use Institute, Denver (March 5-7, Denver U. Law School)

Registration is open and underway for this year's edition of the Rocky Mountain Land Use Institute in Denver, March 5-7, 2025. Location: University of Denver Sturm College of Law.

This conference is more what we'll call "land usey" than ALI-CLE's Eminent Domain & Land Valuation Litigation Conference (as the respective titles suggest), but there's a lot at RMLUI for those whose practices lean more on the eminent domain side than the land usey. As we know, any attempt to draw a clean line between these practices is futile, and there's tons of crossover. That's why we'll be there, downloading the latest.

As always, there's a great a la carte menu of programs and tracks for attendees to choose from, including sessions on "Sheetz and Exactions," "Brownfields Re-Re-Development," "Managing Growth and Infrastructure in the Southwest," "ADUs for Aging in Place," and, thankfully, "Legal Ethics." And some add-on workshops the day before if that's your thing. Check out the full range of programming here. 

Here's the full description of the conference, via RMLUI's website:

Western communities, and the infrastructure and regulatory systems that they depend on, are experiencing the challenges associated with aging. As we invest in foundations for the future, we need to address those challenges and seize opportunities presented as we adapt. The 2025 Western Places | Western Spaces conference will explore the best ideas for how communities can update their planning processes, their infrastructure, and their regulatory systems to meet the moment.

Join us for Rocky Mountain Land Use Institute's 2025 conference, featuring focused tracks on:

Aging Physical Infrastructure / Aging Intellectual Infrastructure / Aging Population

You can also expect a variety of great sessions addressing: 

• Housing
• Energy
• Water
• Transportation + Mobility
• Small Towns & Rural Communities
• Land Conservation & Open Space
• Climate & Disaster Resilience
• Legislative Developments & Legal Issues
• Tools & Technologies
• Equity, Diversity & Inclusion
• Professional Responsibility & Ethics

Perhaps best of all, you will have the opportunity to network with an extraordinary group of thought leaders and practitioners who are working at the vanguard of planning and land use law to build a stronger, more equitable, and more resilient region.

Look for us in the back of the room, eagerly taking notes. Stop by and say hi, if you are so inclined.

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

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

Here's the description:

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

The money quote from Jeremy:

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

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

Worth a listen.

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

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

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

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

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

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

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

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

Homework, not filmstrips!

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

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

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

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

Slip op. at 8-9.

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

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

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

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

Show Me The Money: Reg Takings Claim Ripe Because City Made Its Decision Even If Owner Could Have Administratively Appealed

Nothing to do with the case, beyond the owner's name.
But c'mon, its ABBA.

Ms. Money and her spouse own a home in San Marcos, Texas. That home is in a historic district.

But it turns out that some of that history isn't pretty: one of the previous owners was "notoriously associated with the Ku Klux Klan." Yikes. And to make it worse, that owner, a certain Frank Zimmerman, branded the home by installing a Juliet balcony with a big ol' wrought iron "Z" on the front of the house.

Very understandably, once they found out this detail (after they purchased the home), Ms. Money and her spouse wanted the Z gone. First the good news: although the home is in a historic district, the structure itself isn't historic. So there's that. But game not over, because even though it isn't historic, the home nonetheless is in the historic district, meaning that the city's code prohibits removing things like the "Z" without the city's permission, even where that Z was put there by a Klan guy .

So Money asked. No, sorry, said the city's Historic Preservation Commission: Klan guy or not, that Z is historic, and you can't take it down. Don't like that? Then you can appeal from the Commission to the Zoning Board of Adjustment under the city's code.

But "the Moneys concluded that an appeal would be futile." So they sued, asserting facial and as-applied physical takings claims under both the U.S. and Texas Constitutions. The city sought dismissal, on the grounds that the takings claim was not ripe because the city had not made a final decision; Money could appeal the Commission's denial to the ZBA. Seems like a legit argument, at least if you buy the theory that even though the Supreme Court has emphasized that you don't need to exhaust administrative remedies to ripen a federal takings claim, the government must have made a "final decision." Emphasis on the "final." The District Court agreed with the city and dismissed, and sua sponte threw in a 12(b)(6) dismissal for failure to state a claim for good measure.

In Money v. City of San Marcos, No. 24-50187 (Feb. 7, 2025), the U.S. Court of Appeals for the Fifth Circuit reversed. As the court framed it, the district court held the claim unripe because "these per se takings claims are not ripe because the Moneys did not appeal the Commission's denial to the Zoning Board, and therefore did not receive a final decision." Slip op. at 4-5. (Note: in the Fifth Circuit, the "final decision" requirement applies to all takings claims, physical and regulatory, unlike other circuits where the requirement does not apply to physical takings claims; the court here noted that rule makes little sense, but concluded in essence, "it's circuit precedent, so what the hell.")

This physical takings claim is ripe, held the court. The requirement is for finality, not exhaustion:

As for the as-applied challenge, the district court seems to have conflated finality with exhaustion. The Moneys received written notice that their “request for a Certificate of Appropriateness to allow the removal of the wrought iron Juliette balcony on the second story of the front façade was denied by the Historic Preservation Commission on May 4, 2023.” The notice informed them that applicants “may appeal a final decision of the Historic Preservation Commission on an application for a certificate of appropriateness to the Zoning Board of Adjustments within ten (10) days of the Historic Preservation Commission’s action on the application.” It also included instructions on how to submit this appeal. The Commission’s denial satisfied the finality requirement. The Moneys were not obligated to exhaust their remedies by filing an appeal. Their as-applied takings claim is also prudentially ripe.

Slip op. at 6.

The court declined to decide whether exhaustion is required to ripen a Texas constitutional takings claim. See slip op. at 7 ("Because appealing the Commission’s denial would not have mooted the Moneys’ Texas Constitution claims, we need not decide whether the caselaw requiring exhaustion would otherwise apply.").

As for the district court's sua sponte 12(b)(6) of the Money's federal physical takings claim? That went down too. The complaint alleged that by refusing to allow removal of the offensive "Z," the city required the Moneys to endure an unwanted physical occupation of their land. Relying as you might expect on Loretto, the court compared the situation there, and concluded this one is pretty much the same in all relevant aspects:

Here, the district court dismissed the Moneys’ as-applied per se takings claim after concluding that the alleged facts are governed by Penn Central, not Loretto. We disagree. We see no meaningful distinction between the allegations in the Moneys’ complaint and Loretto. Both here and there, a government ordinance prohibited a building owner from removing an object that was already attached to the exterior of his building when he purchased it. Likewise, both the Z and the cable equipment were installed at a former owner’s discretion, not pursuant to government action or regulation, but subsequently enacted public ordinances prohibited removal. The district court erred by sua sponte dismissing this claim under Rule 12(b)(6).

Slip op. at 10 (footnote omitted).

About the only thing about this opinion that we don't care for is that it is unpublished.

Too bad, it is worthy of being precedential.

Money v. City of San Marcos, No. 24-50187 (5th Cir. Feb. 7, 2025) (unpub.)

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

Shands Key, with the City of Marathon in the background

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

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

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

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

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

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

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

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

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

Friday Dirt Law Round-Up

Here's what we're reading this day:

• Christian Britschgi (Reason), "18 Months After Wildfires Destroyed Some 2,000 Homes on Maui, Only 3 Have Been Rebuilt"
• Christy DeSmith (Harvard Gazette), "Study says tighter land-use controls hurt productivity, innovation among builders, fuel housing crisis"
• Steven Greenhut, "If California Can Suspend Permitting Rules After Wildfires, It Can Abolish Them"
• Carol N. Brown (Medium), "A Civil Rights Defense of Gentrification"
• Michael J. Crosbie (Common Edge), "Unlocking the Mysteries of Zoning" (a review of Key to the City: How Zoning Shapes Our World (Sara Bronin)

Good weekend reading as well.

Mass SJC: State Requiring Municipalities To Adopt Multi-Family Zoning Is Enforceable By AG...But

The only courthouse we know where the Supreme Court
is below the Court of Appeals (SJC on the second floor,
appellate court on the third)

A brief one from the Supreme Judicial Court of Massachusetts.

In Attorney General v. Town of Milton, No. SJC-13580 (Jan. 8, 2025), the court rejected a challenge to a state statue which allowed the Massachusetts Bay Transportation Authority, the public transit authority in the Boston area, to require municipalities which access the T loosen their zoning regimes to "provide for at least one district of multifamily housing 'as of right' near their local MTBA facilities." Slip op. at 3. One town declined to do so, and the state AG sued to enforce the statute.

The town responded by challenging the statute's validity and the AG's authority to sue to enforce it. Yes on both counts held the SJC. But (and there's a big "but" here, see below)...

As a question of statutory and state constitutional interpretation, this case is mostly of local interest (see the extensive list of amici briefs filed at footnote 2, for example), but us non-Bay Staters may still find some wicked smaht stuff, especially as states nationwide are similarly employing what we call "cram-down" Dillon Ruley strategies to force slow-moving municipalities to get off the dime and loosen their development and zoning regimes to allow more housing (most notably in California).

The court first rejected the argument that the state requiring municipalities to do things violates the state constitution's separation of powers doctrine. You sep-of-powers mavens understand that Massachusetts (led by John Adams) was the first jurisdiction to write down in its constitution the notion that power should be distributed, with the various branches being pushed-and-pulled against each other. That principle manifests in the general notion that the legislature cannot delegate its power to make laws (something land users are familiar with). See pages 10-13 of the slip opinion for the court's analysis supporting its conclusion that no, this was not an illegal delegation from the legislature to the MTBA.

The court also concluded that the AG has the authority to sue in equity to enforce, notwithstanding the fact that the statute does not expressly charge the AG with this power. See slip op. at 15 ("But the Attorney General's enforcement power is not dependent upon whether a particular statute happens to reference it."). If it is in the public interest to enforce a law, the AG can sue.

But (and here's where we get to that "but" we referenced earlier), it turns out that the guidelines promulgated by MTBA on how to implement the statute were not properly adopted under the rulemaking requirements of the Massachusetts Administrative Procedures Act. Do it again and don't do anything until you do, held the court. Slip op. at 22 ("Because HLC failed to comply with the APA, HLC's guidelines are legally ineffective and must be repromulgated in accordance with G. L. c. 30A, § 3, before they may be enforced."). Who says that courts are oblivious to politics?

Attorney General v. Town of Milton, No. SJC-13580 (Mass. Jan. 8, 2025)

New Cert Petition: To Have A Nollan-Dolan-Koontz Claim, Must You Be Forced To Give Up Land And Money?

Here's a recently-filed cert petition to watch. We won't go into the background, because the Questions Presented pretty much lay the foundation:

Respondent County of San Diego, et al. (County), a California land use agency, denied the land use permits for Village Communities et al. (Village) to develop a much-needed residential and mixed-use community in North San Diego County, California. The County denied the Project solely because Village “failed” to satisfy the County’s condition requiring Village to pay money to acquire offsite easements from 100 percent of the 50 property owners along a public road near Village’s property site in spite of the fact that the County made no individualized determination that the monetary exaction, a sum of approximately $2.5 million, bore an “essential nexus” and “rough proportionality” to the purported impacts associated with Village’s project as required by Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994).

The questions presented are:

1. Whether the Ninth Circuit’s holding that a land use permit applicant/landowner must show the government’s permit condition would coerce the applicant to give up both its own property and money to establish a Fifth Amendment takings claim under the unconstitutional conditions doctrine, conflicts with this Court’s decision in Koontz v. St. Johns River Management District, 570 U.S. 595 (2013)?

2. Whether the Ninth Circuit’s decision is contrary to Koontz, which imposes on the land use permit applicant/landowner only the burden to show that the government imposed an unconstitutional condition that required the applicant to give up property/money for which the Fifth Amendment would otherwise require just compensation under Koontz, Dolan, and Nollan?

Follow along on the Court's docket, or stay tuned here. Case set to be conferenced next month.

Petition for a Writ of Certiorari, Village Communities, LLC v. County of San Diego, No. 24-736 (U.S. Jan. 1...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Slip op. at 3.

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

Declaratory judgment and injunction issued.

Check it out.

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

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

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

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

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

(Un?)Happy Euclid Day!

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

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

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

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

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

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

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

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

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

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

Euclid is literally a landmark decision.

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

 

 

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

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

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

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

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

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

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

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

Lozman was not one to let that slip by:

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

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

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

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

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

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

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

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

Slip op. at 9.

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

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

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

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

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

Links From Today's ABA Land Use Session

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

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

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

The Old "Neighborhood Character" Trope Dressed In Environmental Clothing

Justice Sutherland asks:
whadda mean, you don't like apartments?

Check out this uncharacteristically-lengthy opinion from New York's Appellate Division (and entire 6 pages!).

In Bennett v. Troy City Council, No. CV023-0709 (Oct. 24, 2024), the court invalidated a municipal upzoning (from single-family residential to Planned Development -- which would permit apartments) because the city's conclusion that the zone change would have no significant environmental impact under New York's study-and-disclose statute.

Not content with apartments coming to the neighborhood, an adjoining owner, the "coufounder of The Friends of the Mahicantuck," sued to challenge the negative environmental declaration. Under New York's environmental study-and-disclose statute, the "environment" may include such things like historic or archaeological resources, and similar. 

Zoning and rezoning is generally subject to deferential judicial review under Euclid, with the courts applying rational basis review and generally taking a hands-off approach. But this was not a Euclid-like challenge arguing that the upzoning was arbitrary and capricious. The environmental statute empowered the court to delve into the record, and determine for itself whether the city's negative declaration had a sufficient factual basis and the city had applied the required scrutiny to those facts.

Short story: it didn't:

In view of the site's significant archaeological history, and the omission of the Stockbridge-Munsee Community as a consulting party in formulating any required data retrieval plan, we find that respondent failed to take the necessary hard look at the significant environmental impact expected from the project by issuing a negative declaration.

Slip op. at 5.

The challengers also brought a spot zoning claim which the court rejected by applying the rational basis/fairly debatable test:

While the project certainly differs from the existing single-family zoning, it does maintain a residential use and would establish a multi-use trail along the shoreline opening public access to the Hudson River. The initial rejection of the proposal by the Planning Commission is relevant to this compatibility question (see Matter of Save Our Forest Action Coalition v City of Kingston, 246 AD2d 217, 221 [3d Dept 1998]), but the record was expanded by the EDP October 2021 report prior to respondent's determination. Under these circumstances, where the question of compatibility is "fairly debatable," we conclude that petitioner did not meet her burden of demonstrating that the zoning amendment constituted illegal spot zoning (Matter of Evans v City of Saratoga Springs, 202 AD3d at 1324 [internal quotation marks and citations omitted]; see Matter of Heights of Lansing, LLC v Village of Lansing, 160 AD3d 1165, 1169 [3d Dept 2018]).

Slip op. at 6.

The presence of the spot zoning claim tells us that this was not, at heart, a true environmental challenge but more NIMBYs who don't want apartments ruining the character of their neighborhood who found a way to dress up those objections in environmental clothing.

Bennett v. Troy City Council, No. CV-23-0709 (N.Y. App. Div. Oct. 24, 2024)

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

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

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

Here are the Questions Presented:

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

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

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

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

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

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

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

Here's the description:

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

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

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

Some possible topics:

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

Fertile grounds for exploration.

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

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

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

Here's the Abstract:

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

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

Download the pdf here.

Worth your time to check out.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Build-to-Rent Homes: A Promising Solution to Chronic Housing Shortages" - CRE 2024 Jared Shales Prize

Congratulations to our Pacific Legal Foundation colleague Brian Hodges for his article "Build-to-Rent Homes: A Promising Solution to Chronic Housing Shortages" being awarded the 2024 Jared Shales Prize by the Counselors of Real Estate (CRE).

From the Introduction:

When homeownership is increasingly out of reach for many, build-to-rent (BTR) housing offers a desirable alternative to traditional homeownership. First, BTRs provide flexibility that traditional homeownership cannot match. By renting rather than owning, tenants are free to move around the city or the country as their jobs, family situations or lifestyle decisions dictate. They can enjoy the benefits of urban or suburban living without being tied down to a particular location or property. Second, BTRs are often built to higher standards than traditional rental properties, with modern amenities and communal spaces that foster a community and belonging. These properties are often professionally managed, meaning that tenants can enjoy the benefits of high-quality maintenance and management without the stress and expense of managing a property themselves. And third, BTRs offer a high-quality home without homeownership mortgage and maintenance obligations.

Where available, BTRs are quickly becoming a preferred option for many young families, empty-nesters, and itinerant retirees. Yet several local governments, especially in Georgia, have enacted laws banning BTR developments, mainly in response to misplaced NIMBY — not in my backyard — resistance to living alongside renters.

Read the entire piece here, or download the pdf.

Court To Phoenix: Clean Up Your Act!

A frequent vibe in cases where a member of the public asks a court to compel a local government to do something about an undesired land use (i.e., "the city should stop my neighbor from illegally renting their property," or "the police should remove the pop-up unlicensed food stand on the sidewalk in front of my restaurant") is that zoning enforcement is often viewed by courts as a discretionary municipal function or a question about allocation of enforcement resources -- and therefore the judiciary takes a hands-off approach.

That vibe, however, did not carry the day when the Arizona Court of Appeals tackled Brown v. City of Phoenix, No. CV23-0273 (Aug. 27, 2024). In that case, the court upheld a trial court's preliminary injunction ordering Phoenix to do something about the notorious "zone" that the trial court determined was a public nuisance "created or maintained" by the city.

We won't go into great detail here, but recommend you check out the opinion. It offers a pretty decent roadmap for aggrieved plaintiffs to avoid the usual judicial hands-off vibe. One of the key parts of the decision in our view is the conclusion that the city can be held responsible for what other people do:

¶23 To the extent the City presses this argument for property it owns and controls in the Zone, the argument fails. The City properly may be held responsible both for a public nuisance, and to abate a public nuisance, on land it owns and controls. In requiring such abatement, the superior court properly relied on Phoenix v. Johnson, 51 Ariz. 115 (1938). Applying Arizona’s common law, Johnson addressed a sewer system the City built and installed that the City then failed to operate properly, resulting in the emission of foul odors. 51 Ariz. at 120. In addressing resulting claims, the court approved a jury instruction allowing the City to be held liable for failing to manage its sewer system, thereby causing a public nuisance. Id. at 130. That same analysis applies here.

¶24 “[O]ne who owns land and fails to act to abate a [public] nuisance originating on that land” can be held liable under a public nuisance theory. Bischofshausen v. Pinal-Gila Ctys. Air Quality Control Dist., 138 Ariz. 109, 112 (App. 1983) (citing RESTATEMENT (SECOND) OF TORTS §§ 824, 838-840 (Am. Law. Inst. 1979)). Though not expressly stated in the permanent injunction, the parties acknowledged at oral argument in this court that the “public property” reference in the permanent injunction is limited to public property the City owns and controls and does not apply to public property owned and controlled by another public entity or property owned by private individuals or entities.

Slip op. at 8-9.

Worth reading.

Brown v. City of Phoenix, No. CV23-0273 (Az. Ct. App. Aug. 27, 2024)

Book Launch Event, Aug 13, 2024: Jim Burling, "Nowhere to Live: The Hidden Story of America's Housing Crisis"

If you are in the California Southland (or plan to be in the next week), please be sure to reserve on your calendar Tuesday, August 13, 2024, to join us in-person for the launch of our colleague Jim Burling's forthcoming book, "Nowhere to Live: The Hidden Story of America's Housing Crisis."

Here's a blurb about the book, which is available for preorder on Amazon:

A century of policy mistakes ruined America’s cities and created an unprecedented housing crisis.   
 
For many families, homelessness is no longer someone else’s problem. It is right around the corner, a real threat in their own immediate future. Our housing crisis is the result of a long history of government policies, court cases, and political manipulation. While these disparate causes make up a tangled web, they have one surprising root: the attack on private property rights. For more than a century, government policies and court decisions have attacked, undermined, and eroded private property rights. Whether it be exclusionary zoning, eminent domain abuse, rent control, or excessive environmental regulations, the cumulative impact of these assaults on private property is that it’s become increasingly difficult—or even impossible—to build adequate housing supplies to meet market demands. We are fast approaching a time when millions of typical Americans will, quite literally, have nowhere to live. 

Nowhere to Live: The Hidden Story of America’s Housing Crisis, takes readers through the history of how we got here. With stories going back to the Civil War, the early twentieth century, and the ill-fated “urban renewal” movement of the 1950s, Nowhere to Live reveals how the government layered mistake upon mistake to create the current crisis. It also provides a way out: not by government fiat, but through the restoration of private property rights.  

The event will take place at the Pacific Club in Newport Beach, California, from 6:00-8:00 p.m., on Tuesday, August 13, 2024. It will feature Pacific Legal Foundation President Steven Anderson, and national zoning expert Nolan Gray, and, of course, Jim. The event will feature an open bar and is free. Register here.

Come, join us and learn and celebrate!

Relying On Complaint's Allegation That City Issued A Permit As Confirmed By Chief Building Officer Email, Texas App Holds Takings Claim Ripe Even Though City Said Council Must Issue Permits

Check out City of Kemah v. Crow, No. 01-23-00417-CV (July 25, 2024), from the Texas Court of Appeal (First District).

This is yet another takings ripeness case -- here, the so-called "final decision" requirement -- the second recent opinion on this issue from the Texas court. See "Final Decision Takings Ripeness Is Based On All Circumstances, Not Hard-And-Fast Requirements (Read That Again: A Factual Question)" for our write-up of the other case.

In this one, the owner asserted that the city issued her a building permit for her "barndominium" and and two other structures to be used as short-term rentals, but later issued a stop work order. This resulted in a Penn Central taking, she asserted.   

The city sought ripeness dismissal, asserting the owner didn't actually have a permit issued by the city council as its ordinances require. The owner didn't have the actual permit, but her complaint alleged that she did have emails from the City's Planning officer and City Manager saying she had a permit, and her complaint also included allegations that these and other city officials repeatedly confirmed that she had the permit. See pages 2-9 of the slip opinion for the details as recited by the court.

The city argued that emails and other communications with city officials don't count, and only the city council can issue permits. Yes, she applied for a permit, but the city council has never approved one.

The City argued that Crow never obtained a final decision from the City on her permit application. Specifically, it asserted that although Crow claimed to have received an email from Shoaf advising her of the City’s approval of her permit application, she failed to allege facts showing the actual issuance of such a permit or the City’s denial of her application. It further argued that Crow did not allege that she obtained a variance, or that her alleged variance request was denied, and she failed to allege facts showing that re-application for a building permit would be futile. Thus, it argued, Crow failed to present a ripe claim over which the trial court could assert subject matter jurisdiction.

Slip op. at 9-10.

No official final decision from the council = takings claim not ripe.

The court limited itself to the allegations in the complaint: we take those allegations and the attachments to the complaint (including, inter alia, the emails from the planning and city officials saying 'you have a permit') as true, and if proven, this would be enough to show that the city made enough of a final decision to consider the takings claim on the merits, even though the city now claims it didn't make a formal, official permit grant. The city made enough of a final decision to show the case was ripe:

In support of her allegation that the City issued her a building permit, Crow attached copies of the emails and texts above as exhibits to her amended petition. Crow also attached a transcript of the minutes from the February 16, 2022 City Council meeting. At the meeting, Mayor Joiner stated, “[Item] 24. Discussion, consideration, and possible action on a request to lift the stop work order on 1306 Fay Road, Kemah, Texas 77565, Owner Veronica Crow, request for the city to provide a hard copy of the permit for 1306 Fay Road, Kemah, Texas 77565, issued under No. 210603007 . . . .” Also attached to Crow’s amended petition is a December 10, 2021 email from Shoaf to the Mayor and City Council providing an update on 1306 Fay Road. In the email, Shoaf stated, “It has also been brought to the attention of Walter [Gant] and myself that a member of Council has reached out to the permit holder.” (emphasis added)

Crow alleged that she was issued a permit to build on 1306 Fay Road in July 2021, constituting the final determination of her permit application, the City then denied Crow her right to proceed with construction under that permit, and later denied that the permit ever existed. Crow alleged that she sustained the loss of investment-backed expectations as a result of the City’s improper, intentional, and wrongful conduct, which amounts to a taking under the Texas Constitution. Taking her factual allegations as true, as we must, we conclude that Crow’s claim is ripe.

Slip op. at 17-18.

Here's a practical lesson that we take from this case and others: we know that in most jurisdictions, a complaint only need meet the fairly low bar of "notice pleading" tempered (in federal courts) by Twiqbal "plausibility." And that ripeness is generally a defense and not an essential element of a claim. But when pleading regulatory takings, property owners are seemingly held to a higher standard.

That being so, if you have the facts and the documents to anticipatorily plead the case is ripe, you should do what Crow's lawyers did her: plead with specificity like this was a fraud claim, and attach the documents to the complaint. Yes, it might not be required, but there's little harm in it, and doing so might avoid all kinds of mischief wrought by defendants and courts looking to get rid of your claim. 

PS - can we move all of our clients' properties to Texas, please? 

City of Kemah v. Crow, No. 01-23-00417-CV (Tex. App. July 25, 2024)

New Article - "Sheetz v. County of El Dorado: Legislatures Must Comply with the Takings Clause" (Brian Hodges & Deb La Fetra)

Check this out: our Pacific Legal Foundation colleagues (Brian Hodges and Deborah La Fetra we on our Sheetz SCOTUS team), have posted a new scholarly piece on SSRN, "Sheetz v. County of El Dorado: Legislatures Must Comply with the Takings Clause."

Here's the Abstract:

For more than 30 years, the Supreme Court has recognized that building permit conditions requiring a dedication of property to the public implicate the Fifth Amendment’s Takings Clause and are therefore subject to the unconstitutional conditions doctrine as set out by Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). But for nearly as long as the Nollan/Dolan doctrine has been in place, state and lower federal courts have divided on the foundational question of whether the doctrine applies equally to all branches of government, or if it applies only to administrative exactions imposed by agencies on an ad hoc basis. See, e.g., California Bldg. Indus. Ass’n v. City of San Jose, 136 S. Ct. 928, 929 (2016) (Thomas, J., concurring in denial of certiorari) (acknowledging a decades-long split of authority); Parking Ass'n of Georgia, Inc. v. City of Atlanta, 515 U.S. 1116, 1117-18 (1995) (recognizing that the split of authority raises an important question of constitutional law).

The United States Supreme Court’s unanimous decision in in Sheetz v. County of El Dorado settled this split of authority by ruling that the unconstitutional conditions doctrine applies to all branches of government, including the legislature. 601 U.S. 267, 280 (2024). Although the holding drew support from the full Court, the opinion drew three concurring opinions commenting on additional questions may need to be determined on remand or in future litigation. Id. at 280-84.

This article reviews the state of the law regarding Nollan/Dolan’s special application of the doctrine of unconstitutional conditions both before and after the Sheetz case and discusses the questions posed by the concurring opinions—i.e., whether an impact fee is an exaction subject to Nollan and Dolan and whether class-based exactions should be held subject to the same heightened scrutiny, “essential nexus” and “rough proportionality” tests as all other exactions. The article then discusses the decision’s implications on other emerging takings issues, including whether sovereign immunity can bar property owners’ recovery of just compensation and the cognizability of judicial takings claims.  

Download the article here.

Highly recommended.

New Cert Petition: Gov't Asks Whether A Penn Central Taking Is Really A Lucas Taking

Check this out, a local government has filed a cert petition seeking reversal of one of those relatively rare circumstances where the property owner won below on a temporary regulatory takings claim for the County's denial of a development permit.

We won't go into details on this, but urge you to read the petition, especially the Questions Presented:

In First English Evangelical Lutheran Church of Glendale v. Los Angeles County, Cal., the Court held that the Fifth Amendment requires “just compensation” for temporary regulatory takings, i.e., “those regulatory takings which are ultimately invalidated by the courts.” 482 U.S. 304, 310 (1987). The appropriate compensation for a temporary regulatory taking is described as “fair value for the use of the property during this period of time.” Id. at 322. All claims for temporary regulatory takings must be analyzed using the ad-hoc, fact-based analysis set out in Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978). Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 328 (2002). The takings analysis must “focus on ‘the parcel as a whole,” including a temporal element, in determining the impact of the challenged regulation. Id., 535 U.S. at 331 (quoting Mahon, 438 U.S. at 130-131.

Judgment was entered in this case finding that the denial of a permit for a specific project – a three-story beachfront duplex – during administrative appeal proceedings was a temporary regulatory taking, even though other economically beneficial uses remained available, and there was no evidence of any effect that this denial may have had on the fair market value of the land. Compensation was awarded for the total value of claimed lost profits, plus additional estimated costs, as if the denial of the permit had completely stripped the property of all value during the litigation.

The questions presented are:

1) Does the temporary prohibition of a specific project or use constitute a compensable regulatory taking, regardless of the availability of other economically beneficial uses of the property?

2) Alternatively, whether it is “just” pursuant to the Fifth Amendment to award compensation for a temporary regulatory taking based solely on the lost profits and other costs of the prohibited project or use, without regard for any remaining value.

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

Petition for a Writ of Certiorari, Baldwin Cnty. v. Bordelon, No. 23-1337 (U.S. June 25, 2024)

Can The California Coastal Commission Be Reined In?

The California Coastal Commission is infamous for being the most out-of-control governmental agency in the nation. This regulatory leviathan fancies itself the undisputed czar of land use and other activities in its fiefdom, the California coastal zone.

Created in 1976 as an agency with regulatory authority across California's 1,000+ miles of coast (and land in a defined shoreward zone), it has since expanded to its current role as a government-outside-the-government, whose main role it often seems is more about wielding an iron fist over anything that happens in the coastal area, than protecting coastal access and resources while also respecting property rights as its governing statutes require.

The Commission has been blessed with procedures that appear insanely unfair to anyone not familiar with how things work in California. For example, any two Commissioners may file an administrative appeal of a municipalilty granting a development permit to get it overturned; and to whom do the Commissioners appeal? To the very Commission on which they sit, of course! Yeah, that seems fair.

For decades, the Commission has enjoyed unprecedented power and a legislature and judiciary unwilling to place or enforce any realistic limits on its power. For example, the courts have interpreted a statute that bars the Commission from taking property without compensation to give the Commission the discretion to waive, overrule, or ignore any restrictive state or local coastal law, if the Commission believes to apply it would result in a taking (the Coastal Act are full of these type of restrictions on use). This is tantamount to the Commission exercising legislative power to rewrite the law ad hoc.

OK, enough editorializing. (Strong letter to follow!)

But of late, there may be cracks in the edifice. In large part because of the YIMBY movement, the Commission has become subject to public criticism for being an impediment to reasonable development, something it is not all that used to. Why should Bakersfield, Fresno, and non-coastal communities bear the burden of absorbing the new housing needed to address California's housing shortage, while the while I-got-mine elite coastal enclaves maintain their exclusivity?

A group called "Circulate San Diego" has studied this phenomenon and published this report ("A Better Coastal Commission"):

This report documents numerous examples where the Coastal Commission has resisted, opposed, and delayed the construction of deed-restricted affordable homes that use programs like Density Bonus Law. This is even true for projects on land that is already zoned for multi-family housing, in plans already approved by the Coastal Commission itself.

Similarly, this report documents examples where the Coastal Commission opposes projects that the Legislature encourages as a part of California’s efforts to combat climate change. Crosswalks, bicycle lanes, and infill development near transit are all goals of recent statewide legislation, yet the Coastal Commission opposes or delays many of these projects. Their decisions to prioritize car travel above all other modes is inconsistent with modern climate goals, as adopted by the Legislature.

The report makes some modest recommendations for reform:

• Amend Density Bonus Law to require its implementation by the Coastal Commission, as proposed in AB 2560 (2024).
• Remove or narrow the special exemptions that keep housing reforms from applying to the coast.
• Mandate procedural reforms at the Coastal Commission.
• Apply transportation and climate policy to the Coastal Zone.
• Avoid creating, or narrowly draw, coastal exemptions to new housing legislation.
• Look skeptically on Coastal Commission requests for more authority.

Reacting as you might expect (with affront), the Commission is "offended at even the suggestion" it gets in the way of housing in the coastal zone. See this story from the San Diego Union-Tribune ("Has the Coastal Commission made housing and climate crises worse? It's offended at even the suggestion"). 

But this seems to be one of those "moments." After all, even the Commission's usual allies are asking questions and proposing reforms. When you've lost San Francisco democrats, and the California Supreme Court agrees to take up the first case in a decade which may call your power into question, Coastal Commission, you are missing the cultural zeitgeist. 

Will anything come of this report, and the reform movement generally? Will there be a reckoning for the California Coastal Commission?

If one is in the cards it won't be easy because we know that when there's a threat to its power, it pulls out all the stops and fights like hell. Stay tuned. 

New Cert Petition: When Does The Statute Of Limitations Start To Run On A Reg Takings Claim?

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

Check out this cert petition which asks about what actions trigger the statute of limitations on a takings claim. This is an issue that seems to be cropping up more and more these days. For example, see here, here, here, here, and here.

Here are the Questions Presented:

Whether the statute of limitations for a Section 1983 takings claim for the unconstitutional deprivation of private property (specifically real estate) can begin to run before the municipal action that caused the property owner to sacrifice all economically beneficial uses has transpired?

And further, whether the Tenth Circuit Court of Appeals used the proper unit of property to measure if Mr. Bruce was forced to sacrifice all economically beneficial uses of his property?

And finally, whether the 14th Amendment’s due process provisions permit the mayor of a city with a political or policy interest in the demolition of a building to act as the judge who determines whether a city will order the demolition of that building?

Follow along on the Court's docket here.

Petition for Writ of Certiorari, Bruce v. Ogden City Corp., No. 23-1260 (U.S. June 3, 2024)

Unpublished Wednesday: Eviction Moratorium Taking, Excessive Fines Taking, And 1983 Zoning Statutes Of Limitations

Here are three federal circuit opinions, all unpublished. None of them worthy of a stand-alone post, but also not to be overlooked entirely.

• GHP Management Corp. v. City of Los Angeles, No. 23-55013 (9th Cir. May 31, 2024): Lessors "failed to state a claim for a Fifth Amendment per se physical taking[,]" in their challenge to LA's eviction moratorium. You know why: you waived your right to exclude by renting your properties, so the government prohibiting you from getting breaching tenants out is merely a regulation of the landlord/tenant relationship. Yee.
  
• Innova Investment Group, LLC v. Village of Key Biscayne, No. 21-11877 (11th Cir. May 29, 2024): After the Village tagged Innova with a NOV and $4k fine for not obtaining an interior demolition permit and Innova failed to correct the violations within the 60-day deadline, the Village imposed $4k per day fines and "aggregate penalties of $924,000 and it has claimed more than $1.2 million in interest for each day the penalties have gone unpaid." Six years later, Innova sued, asserting the Village violated the Excessive Fines Clause. And yes, there's a takings claim as well. The Eleventh Circuit affirmed the district court's dismissal because the claim should have been brought long ago. Florida has a four year statute of limitations, which means that the section 1983 claim needed to be brought within four years of November 2012, when Innova "should have known how much money it would owe the village[.]" 
  
• Handsome, Inc. v. Town of Monroe, No. 23-711 (2d Cir. May 29, 2024): landowner needed a special use permit to construct industrial buildings, which was granted subject to several conditions. After the owner and the Town went back-and-forth in hearings and permit denials and grants-with-conditions, Handsome's state court lawsuit ended up in the Connecticut Supreme Court which held that Handsome did not have standing because it lost title to the property during the course of the case. Another state court action alleging Due Process and Equal Protection claims followed, after which the Town removed the case to federal court. The Second Circuit summarily affirmed the District Court's grant of summary judgment in the Town's favor, primarily because the claims were time barred. The court rejected Handsome's claim that these were continuing violations. The court also rejected the substantive due process claim, because (you guessed it) Handsome didn't have a property interest in a permit because it wasn't entitled under state law to a permit.

Check 'em out.

Happy Birthday, Nectow v. City of Cambridge!

It was on this day in 1928 when the U.S. Supreme Court issued its second most famous decision about zoning, Nectow v. City of Cambridge., 277 U.S. 183 (1928). 

We say "second" because everyone knows that the first is the Court's decision issued just two years earlier which generally upheld comprehensive use, height, and density regulations as a valid exercise of the government's police power to regulate property uses to further the public health, safety, welfare, or morals. See Village of Euclid v. Ambler Realty Co., 272 U S. 365 (1926). 

Partly because of the hype surrounding Euclid and the broad governmental embrace of exclusionary land use policies that Euclid unleashed, we think that Nectow has not received the attention it is due. After all, it should be seen as the companion case to Euclid: it was authored by same Justice who wrote Euclid (Justice Sutherland), and there's a straight line between all three parts of the Court's 1920's land use trilogy (Mahon, Euclid, and Nectow), two of which are strong reaffirmations of property rights. 

But today, Nectow is often dismissed as a byproduct of an earlier time, Lochnering of the substantive due process rational basis test, or even just too archaic to pay attention to.

But unlike Euclid, which was a facial challenge to zoning generally, Nectow was an as-applied challenge, asserting that placing some of Nectow's land in a residential zone -- and thereby causing a contract for sale of the land for non-residential uses to be cancelled -- was arbitrary and capricious. A master appointed to find facts determined the residential designation was out of sync with the mixed uses in the surrounding area. But the Supreme Judicial Court of Massachusetts took Euclid and Justice Sutherland at their word and concluded "who are we, mere judges, to question what Cambridge's zoning officials say is in the public interest?" (We're paraphrasing of course, but that was the vibe.)

But Justice Sutherland was all "hang on, pay attention to what we said in Euclid; that wasn't us telling courts to be poodles." (Paraphrasing, again):

Nevertheless, if that were all, we should not be warranted in substituting our judgment for that of the zoning authorities primarily charged with the duty and responsibility of determining the question. Zahn v. Board of Public Works, 274 U. S. 325, 328, 47 S. Ct. 594, 71 L. Ed. 1074, and cases cited. But that is not all. The governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare. Euclid v. Ambler Co., supra, p. 395 (47 S. Ct. 114). Here, the express finding of the master, already quoted, confirmed by the court below, is that the health, safety, convenience, and general welfare of the inhabitants of the part of the city affected will not be promoted by the disposition made by the ordinance of the locus in question. This finding of the master, after a hearing and an inspection of the entire area affected, supported, as we think it is, by other findings of fact, is determinative of the case. That the invasion of the property of plaintiff in error was serious and highly injurious is clearly established; and, since a necessary basis for the support of that invasion is wanting, the action of the zoning authorities comes within the ban of the Fourteenth Amendment and cannot be sustained.

 

So yes, zoning as a concept is within the police power, but we must keep at the forefront the core principle that property rights are to be respected. Facts, and not some vague incantation of the rational basis test should serve as the standard 

As James Metzenbaum, the lawyer who represented the Village of Euclid later wrote:

It is essential that there be kept in mind the ever-true doctrine that the owner of property doas have some inalienable rights. A corollary of this doctrine is that it is the duty of the lawyer to fight for the preservation of such rights and not to permit overly zealous zoning experts who draft ordinances nor obliging Councils who pass them, to promulgate legislation which is unreasonable or which unlawfully tends toward the divestment of the property owners' constitutional rights.

See James Metzenbaum, The History of Zoning - A Thumbnail Sketch, 9 W. Res. L. Rev. 36, 42 (1957).

So here's how we see it: go ahead and zone, government. But it's gotta make actual sense (Nectow). And even if it does makes sense but nonetheless deprives the property owner of essential rights, you have to pay for the privilege (Mahon). 

Oh no, you say, if we revive Nectow's recognition of restraints on the police power what shall become of zoning? It doesn't mean the end, only a reasonable limits, bounded by property rights. You know what term is in the Constitution? "Private property." And what term isn't? "Police power." Sure, the term, like element domain, is inherent, we suppose. But aren't we more concerned with protecting an individual's freedom to choose how to use her property, unless there's some articulable harm that can be shown, and not presumed?

And rest easy: zoning isn't the be-all-end-all of municipal land use regulation. Especially when properly constrained by the Constitution. Professor Siegan's seminal book explains why. 

So Happy Birthday, Nectow. Ninety-six years young and looking better each day!

CA2: If You Want To Be A Land Use Player, You Gotta Play (And That Means Keep On Trying - Without Hitching Rides)!

This is one we've been meaning to post for a while, but something else always seemed to intervene.

In BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (Feb. 16, 2024), the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a statutory and constitutional challenge to the Village's .

The court did so on the basis of the surviving part of the Williamson County ripeness requirement, that the government has taken a definitive position on whether it will allow some development of the plaintiff's land under the challenged regulations.

BMG wanted to build 181 homes, so it developed plans for a mix of uses across several parcels, and development of related infrastructure like roads and a community center. This "did not conform to the zoning codes of the Village and Town." Slip op. at 4. The Village and Town were ok with the proposal, however, provided BMG "satisfied certain conditions" such as the look and feel of the buildings, and other architectural style points. Slip op. at 6. Conditional use approvals followed. Eventually, all looked good and the Village and Town granted conditional final approvals.

But when BMG submitted applications for the building permits on several of its lots, the building inspector balked, asserting the architecture and design were off and not what the conditions required. Permits denied. BMG chased administrative appeals to the Zoning Board of Appeals for some -- but not all -- of the lots. The ZBA eventually denied the filed appeals, concluding that indeed, the construction plans were not in conformity with the conditions on those lots.

Having exhausted its administrative remedies on some but not all of the lots, BMG sued. There wasn't a takings claim (BMG's claims included section 1983, Fair Housing Act, and equal protection), but the district court nonetheless applied Williamson County to dismiss the complaint as unripe.

The Second Circuit affirmed. BMG had not received the Village's "final decision" denying development. But wait, you say...I thought that you said that BMG lost the ZBA appeal? That's usually enough, isn't it? Yes, it did do that, but it didn't chase an appeal on all of the lots. Thus, "BMG's failure to obtain a decision from the ZBA 'leaves undetermined the permitted use of the property in question[.]'" Slip op. at 12 (citations omitted). 

BMG responded: the reason we didn't chase a ZBA appeal on those other lots was that doing so would have been futile. And we did get final approvals and ZBA denials on the other parcels in the group, so isn't that enough? No, according to the Second Circuit, rejecting the argument that "[i]n essence, BMG argues that its otherwise-unripe claims relating to Lots 1, 2, and 3 can hitch a ride on the ripeness of its claims relating to Lots 45 and 46." Slip op. at 13. 

And it didn't matter anyway because even those lots on which BMG chased and lost its ZBA appeals are not ripe because (you guessed it), BMG didn't also seek a variance. Slip op. at 14. Apparently, the Second Circuit sees a variance as some kind of super appeal after ZBA denial. And didn't BMG already get a "variance" (also known as a conditional  use permit)?

But that wasn't enough:

We conclude that after the ZBA affirmed the Village Planning Board’s finding that BMG’s construction plans did not comply with previously agreed-upon conditions, BMG was then required to “submit[] at least one meaningful application for a variance” to the Village Planning Board or ZBA to see whether it could apply clustering techniques in the multi-family district while using the new rear elevation, roof pitch, and siding materials.5 See id. Put simply, the SEQRA Findings provided the terms BMG had to abide by in order to depart from the normally applicable land-use restrictions in the Town and Village. As a result, if BMG wished to alter those conditions, it first had to seek another variance before proceeding to federal court. Cf. Southview Assocs., Ltd. v. Bongartz, 980 F.2d 84, 98–99 (2d Cir. 1992) (holding that, even where “the Board ha[d] denied[] . . . one application,” developer still faced burden of establishing that “submission of another application would be futile” (emphasis added)).

Slip op. at 17.

And finally, didn't Pakdel change the ripeness/futility standards? Not at all, according to the Second Circuit. See slip op. at 19. The more things change, the more they stay the same, no?

What's that old adage? If at first you don't succeed, try and try again? We know that in land use, that means as long as the government says it is willing to "clarify" or "change" its decision (something it almost always asserts it is able and willing to do), a court will very likely never hold it to task. Planning authorities know this, and as a consequence are hardwired to almost never say no, and only "no, but..." or "maybe." 

Until the Supreme Court wakes up to this dynamic, nothing is likely to change.

BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (2d Cir. Feb. 16, 2024)

Aloha To Another Semester Of U. Hawaii Land Use

There are some rewards for working late in the 808

Yesterday was the last day of instruction for the Spring 2024 semester at the University of Hawaii Law School. Did these last few months ever go by fast. 

A big thank you to Professor Mark M. Murakami, with whom I guest-lectured at the Old School (both of us earned our JD's at the Law School) over the semester, on such topics as Euclid, vested rights and development agreements, and of course limitations on the police power such as takings.

Although our students have another couple of weeks to finish up with their final papers, we can say with certainty that the future of Hawaii land use law is in good hands. We had some very intriguing and educational discussions over the past few months. 

Law of the Splintered Paddle

      
Old School chalkboards remain in some of the classrooms.
(A plus.)


Speaking of Old School, the original signage from
the Law School's original location is up in the front office.

Flora abounds on the U. Hawaii campus, as you might expect.
Not a bad place to learn the law. Or to teach the law.

We say a fond "aloha" to our new colleagues

"Breaking Down the Supreme Court Ruling on Permit Fees" (Thursday, Apr. 25, 2024, 4pm ET/1pm PT)

Be sure to join our Pacific Legal Foundation colleagues Brian Hodges and Larry Salzman, and Paul Beard (arguing counsel) and Chance Weldon (Texas Public Policy Foundation) tomorrow, Thursday, April 25, 2024, at 4pm ET for a free webinar on Sheetz v. El Dorado County, the Supreme Court's recent decision holding that all permit conditions are subject to the nexus and proportionality tests of Nollan and Dolan.

Here's the description:

Pacific Legal Foundation just won its 18th Supreme Court victory! Join us for a virtual discussion to learn more about the case, Sheetz v. County of El Dorado, and how it helps secure property rights (and lower housing costs) for everyone. 

When George Sheetz wanted to build a modest manufactured home on the property he bought in El Dorado Country, California, the government told him he was going to have to pay a “traffic impact fee” of more than $23,000 in exchange for a building permit. Even worse, the fee would go toward projects that were not tied to the actual impact of George’s home.  

George challenged the fee as an unconstitutional abuse of the permitting process. On April 12, the Supreme Court sided with George in a unanimous decision. At this post-victory discussion, attendees will hear from Paul Beard, the former PLF attorney now at Pierson Ferdinand who argued George’s case before the Court. You’ll also hear from PLF attorney Brian Hodges, who worked on George’s case, and Texas Public Policy Foundation’s Chance Weldon as they break down the Sheetz decision and its significance for property rights and housing costs. 

Register here (free)!

 

Our thoughts on the decision here ("Sheetz pt. I - "Radical Agreement" At SCOTUS: "Your Money Or Your Rights" Isn't OK Just Because A Legislature Does It").

Sheetz pt. II: The Concurrences - Does Nollan/Dolan Operate Differently When Exaction Affects A Class?

Note: this is the second of our posts on the recent Supreme Court opinions in Sheetz v. County of El Dorado, the case in which the unanimous Court held that exactions imposed by legislation are not exempt from the essential nexus (Nollan) and rough proportionality (Dolan) standards. Here's our first post, which covers the case and the main opinion ("Sheetz pt. I - 'Radical Agreement' At SCOTUS: 'Your Money Or Your Rights' Isn't OK Just Because A Legislature Does It").

[Disclosure: this case is one of ours.]

In this post, we cover the three very short concurring opinions.

* * * *

The Court took no position on whether the County's traffic impact fee has an essential nexus to the Sheetz development, or whether $23 grand is roughly proportional to any traffic his proposal might be responsible for. For this and more, the Court remanded the case. Notably, the Court also did not decide whether "a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development." Slip op. at 9-10.

Now that the Court has expressed unanimity on the Question Presented in Sheetz (does the government have the unfettered ability to demand "the goodies" simply because a property owner needs the government's approval to make use if his or her land? No.), let's take a look at the three concurring opinions. 

Sotomayor & Jackson: Hands Off Taxes!

Justice Sotomayor joined by Justice Jackson, wrote separately to restate their agreement with the narrow holding (answering the Question Presented and only the Question Presented) that legislatively-imposed exactions are subject to Nollan and Dolan.

But they noted that this case assumed the "predicate" inquiry that "government could not have constitutionally ordered the person asserting the claim to do what it attempted to pressure that person into doing." Concurring op. at 1 (citing Koontz). thus, "[t]he question presented in this case did not include that antecedent question: whether the traffic impact fee would be a compensable taking if imposed outside the permitting context[.]" Concurring op. at 2.

What we think they are getting at is that straight-up government requirements that some, or all, persons pay money for something (also known as taxes or sometimes fees), are not subject to nexus or proportionality (or at least not in the same way as property exactions are). Fees and taxes may be subject to other limitations, but they are not, generally speaking, evaluated as "takings." 

It probably shouldn't be surprising that Justice Sotomayor concurred on this basis, since during oral arguments, she seemed particularly concerned with the line between exactions, fees, and taxes.

Gorsuch: Broadly-applicable exactions are no different than parcel-specific exactions

Justice Gorsuch preemptively addressed a question that was bandied about at oral arguments, but that the entire Court determined was not presented by the case (so the majority opinion avoided doing more than mentioning it):

The Court notes but does not address a separate question: whether the Nollan/Dolan test operates differently when an alleged taking affects a "class of properties" rather than "a particular development."

Concurring op. at 1. He answered his own question: "But how could it?"

He goes on to note that "[n]othing about" the Nollan/Dolan test "depends on whether the government imposes the challenged condition on a large class of properties or a single tract or something in between." Concurring op. at 1-2.

Short story: there's no reason to not apply the Nollan/Dolan tests to "class" exactions.

Kavanaugh, Kagan, & Jackson: class exactions subject to different nexus and proportionality tests

Three Justices expressed a slightly different view, noting that "today's decision does not address or prohibit the common government practice of imposing permit conditions, such as impact fees, on new development through reasonable formulas or scheduled that assess the impact of classes of development rather than the impact of specific parcels of property." Concurring op. at 1. The three wrote to note that these type of exactions may be subject to different standards, and that the Court did not address or decide that issue. Big hint for those of us who are asking "what might be next?"

Tropebusters! 

What to make of Sheetz? It does resolve, fully and finally, the longstanding question of whether legislatively-imposed exactions are just plain old land use regulations subject to only the rational basis test. Answer: no, they aren't. Does Sheetz leave open some follow-on questions? It seems so to some Justices, at least.

We do know that several longstanding tropes of land use law generally -- and exactions  doctrine specifically -- seem to be gone, while a couple of others may have continuing life:

• Land vs. money? Demanding money or demanding land...all the same thing.
• Labels not controlling. Relatedly, labeling a condition as an "exaction" or "in lieu" fee doesn't matter. Or "legislative" vs "administrative." The opinion refers to the County's traffic impact fee as a "permit condition," an "impact fee." What counts is what the condition does, not what someone calls it. 
• Ministerial vs discretionary. This longstanding distinction in land use and administrative law did not seem to carry a lot of analytical weight with the Court. The opinion referred to "permit conditions," here a condition on a presumably ministerial building permit. We always thought that conditions can only be placed on discretionary approvals, not on things like building permits that are "must issue" when the application conforms to the technical requirements of the governing code.
• Judicial Takings. Fans of the doctrine take note: all nine Justices just signed on to the notion that "there is 'no textual justification for saying that the existence or the scope of a State's power to expropriate private property without just compensation varies according to the branch of government effecting the expropriation." Slip op. at 7 (quoting Stop the Beach Renourishment). Yes, the STB plurality opinion just garnered all nine Justices. Justice Scalia lives; how much wood could a woodchuck chuck!

Sheetz v. County of El Dorado, No. 22-2074 (U.S. Apr. 12, 2024)

$48 Million The Hard Zoning Way: Thanks To NIMBYs And NIMTOOs, Las Vegas Must Pony Up A Lucas Takings Judgment

If there's a money quote in yesterday's opinion by the Supreme Court of Nevada which "wholly affirm[ed] a trial court judgment awarding $48 million in just compensation for Las Vegas's regulatory taking in City of Las Vegas v. 180 Land Co., LLC, No. 24-13605 (Apr. 18, 2024), it might just be this sentence:

Although the City rejected 180 Land's development proposals, its representatives had previously recognized the site's ability to be developed residentially.

Slip op. at 8.

That alone should tell you where this one is ultimately headed. But let's break it down and see how this got there.

Residential PUD Zoning

It started off well for the property owner, who owned land it wanted to use as a golf course, part of a (much) larger 2,200 acre ranch. The city preliminarily approved a request to zone the proposed golf course for residential PUD (planned unit development - which should reveal to you land uses when this went down (1980s)). In 1990, the city was satisfied and the golf course area was zoned R-PD7 (Residential Planned Unit Development).

This being Nevada, the zoning approval meant that the golf course was actually built.

General Plan: Open Space

During the construction, the city adopted a new General Plan which designated the parcel as "Parks/Schools/Recreation/Open Space." But despite the change in the GP, the zoning was not altered. Indeed, in 1986, the city confirmed in a letter that the R-PD7 zoning remained for the golf course. And in 2001, the city adopted another ordinance that "formally rezoned it to R-PD7 on the Official Zoning Map Atlas, and repealed any previous conflicting ordinances." Slip op. at 5.

By 2015, however, the golf course was struggling. "[T]he operator of the golf course informed the then-landowners, Fore Stars, Ltd., that it could not longer make a profit operating the golf course and thereafter terminated the lease in 2016." Id.

Residential Zoning, Residential Development

That same year, an outfit known as "180 Land" acquired the assets of Fore Stars, including the golf course area, and later a fellow named Yohan Lowie acquired ownership. It was time to change the use from a golf course to something more in line with the zoning.

180 Land segmented the 9 parcels of the golf course into four development areas. One of these, a 35-acre parcel, became the focus of the dispute. In 2016, 180 Land sought to develop the site, first by seeking to change the GP designation from Open Space to low-density residential, and then by submitting typical development applications such as a Tentative Map, and site review. City staff recommended approval. While these were in-progress, 180 Land also sought approval of a new Master Development Agreement. Staff was on board with that as well.

Successful Opposition to the Residential Project

Then came the opponents, a "homeowner group" which challenged the city's approval of a separate application for another one of the four former golf course parcels. Next up, the discussion of the 35-acre parcel residential development at a City Council public hearing became "contentious," with "strong public opposition to 180 Land's applications." Slip op.at 7.

The walls came tumbling down:

The City ultimately denied the applications despite the City's planning staff having recommended approval. The City's final decision stated that the denials were "due to significant public opposition to the proposed development, concerns over the impact of the proposed development on surrounding residents, and concerns on piecemeal development of the Master Development Plan area rather than a cohesive plan for the entire area." Despite rejecting the 35-acre application, in part because of concerns over "piecemeal development," the City also rejected the comprehensive Master Development application in August 2017, two months after rejecting the 35-acre application. Also in August 2017, the City rejected applications from 180 Land pending since 2016 for three access points to the golf course acreage from neighboring public streets and to install fencing around two water features on the acreage. The City stated it denied the applications because of "the various public hearings and subsequent debates concerning the development on the subject site" and instructed 180 Land to file an application for a "Major Review" under the City's municipal code. 180 Land did not file any Major Review applications. The City also denied 180 Land's application for a technical drainage study, though Las Vegas Municipal Code (LVMC) 19.16.105 requires such a study before residential development is allowed.

Slip op. at 7-8.

City's Representations

But that wasn't the end of the story. "Although the city rejected 180 Land's development proposals, its representatives had previously recognized the site's ability to be developed residentially." Slip op. at 8. Various city employees and officials confirmed that the city had already approved the residential zoning of the property and under Nevada land use law, zoning is king: if the GP is inconsistent with the zoning, the zoning trumps. 

Inverse Condemnation

Next up, an inverse claim in a Nevada state court. The trial court held that the "hard zoning" was indeed R-PD7, meaning that 180 Land had "as a right" a single-family and multiresidential development. Slip op. at 9. You know what that means: the city could either let 'em build, or condemn. It could not use its police power to deny the "as of right" development. The trial court granted 180 Land multiple summary judgments on liability, and considered valuation evidence of just compensation:

[T]he district court ultimately adopted 180 Land's expert's valuation of the land, $34,135,000, noting that the City did not present any contrary valuations or any other rebuttal evidence and did not depose 180 Land's expert. The district court also granted 180 Land's requests for reimbursement of its property taxes, prejudgment interest, and attorney fees. In doing so, the district court rejected 180 Land's request for a 23-percent prejudgment interest rate, calculating its prejudgment interest award using a prime plus 2-percent rate. The final judgment in favor of 180 Land totaled $48,114,039.30.

Slip op. at 9-10. Both sides appealed. The city sought to overturn the takings judgment, while 180 Land challenged the amount of prejudment interest.

Nevada Supreme Court: a Right to Develop

The Supreme Court described the issue as "whether the site's R-PD7 residential zoning or its PR-OS land designation [on the General Plan] governed 180 Land's ability to develop the property and/or conferred certain rights on 180 Land." Slip op. at 10. When the taking issue is framed that way (as a land usey and not a takings issue), then you can kind of see where this one is going. If the zoning defined 180 Land's property rights, game over. Vested, etc. If the city's argument -- that it could deny "any development applications" inconsistent with the GP designation were accepted, then no property and no taking.

In short, the taking issue turned on the question of whether zoning or the General Plan controlled the use of 180 Land's land. You can read pages 11-12 of the opinion for the details, but the short story is that the court concluded that indeed, zoning is law while the GP is "not a legislative mandate from which no leave can be taken." Slip op. at 11.

Plan/Zone Consistency?

What about the rubric in Nevada land use law that zoning must be consistent with a general plan? The court was not convinced because "[t]he problem with applying the consistency requirement in this case is that the substantial evidence demonstrates that the R-PD7 zoning predated the PR-OS land designation." Slip op. at 12. Zoning: 1986. GP: 1992. And the court also noted that the ordinance adopting the PR-OS GP designation expressly noted that the GP designation didn't modify or invalidate the existing zoning.

Murr Denominator Parcel

Having determined that 180 Land had a vested right to develop in accordance with the residential zoning, the court held that the city's denial of its residential development applications was a taking. The court identified the property interest: the 25-acre parcel. It rejected the city's claim that Murr v. Wisconsin required the denominator to be the entire 9-parcel former golf course.

The court applied the multi-factor Murr standard to conclude that no, the property here was only the 35-acre residentially-zoned parcel, not the other of 180 Land's holdings. The court also rejected the city's claim that the case wasn't even ripe because 180 Land submitted "only one development application[.]" Slip op. at 21. To the court, that one denied application was enough, and "any further attempts to apply for development by 180 Land would have been futile[.]" Id.

Lucas Wipeout

On the merits, we urge you to read pages 24-26 of the opinion, where the court analyzes the case to conclude that this worked a "per se regulatory taking." In short, a Lucas economic wipeout. This passage is worth quoting at length:

The City's denials of 180 Land's applications and the discussion of those applications at various city council meetings show no meaningful indication that the City would allow any development on the 35 acres. As noted above, the City's denials stated it was rejecting the applications based on strong public opposition and that 180 Land had not provided a cohesive plan for the entire golf course acreage. But the City provided no regulatory basis for the denials13 that would allow 180 Land to seek a variance or submit an amended application that would resolve any such issues. The City similarly rejected 180 Land's Master Plan application that provided a cohesive plan for the golf course acreage. That these denials occurred despite the City's planning office working with 180 Land on at least one of the proposals and repeatedly recommending that the City approve the applications underscores an unwillingness to allow any development. And the City did not provide 180 Land with any viable alternatives for it to reap economic benefit from the 35 acres when denying its applications. In short, the City's actions demonstrate that it would not approve any development on the 35 acres. Further, we discern no error in the district court adopting 180 Land's expert's opinion that, without the ability to develop the 35 acres, it had no economic value

Slip op. at 25-26.

Just Compensation

The court next considered the city's argument that the trial court got the just compensation wrong. No abuse of discretion, so judgment affirmed. The most interesting part of this part of the opinion in our opinion is on pages 28-29, where the court noted that the landowner met its burden of introducing relevant valuation evidence (an expert who opined on the land's value in its highest and best use). And, stunningly, that the city
"presented no contrary evidence[,]" and didn't even depose 180 Land's expert. Indeed, it made no effort to rebut the expert report.  Slip op. at 29. Whoa.

And what of the landowner's appeal on the amount of prejudment interest? No go because the rate it sought would not merely make up for the delay in payment, but would "reimburse it for the purported profit it lose had it been able to develop the land." Slip op. at 32.

The opinion ended by summing up:

When a governmental agency acts in a manner that removes all the economic value from privately owned land, just compensation must be paid. Here, the City's actions demonstrated a refusal to allow any development on the 35-acre parcel owned by 180 Land such that the parcel no longer had any economic value. The district court therefore did not err in finding that a taking occurred. Nor did the district court err in its just compensation award, as it based that decision on uncontroverted evidence from a duly admitted expert witness.

Slip op. at 32.

There it is.

Congratulations are in order for our Nevada colleague Kermitt Waters and his firm.

City of Las Vegas v. 180 Land Co., LLC, No. 24-13605 (Nev. Apr. 18, 2024)

Sheetz pt. I - "Radical Agreement" At SCOTUS: "Your Money Or Your Rights" Isn't OK Just Because A Legislature Does It

Guess where we stopped for coffee this morning?
(A reminder: this case has nothing to do
with the convenience store.)

Note: this is the first of two posts on the recent Supreme Court opinions in Sheetz v. County of El Dorado, the case in which the unanimous Court held that exactions imposed by legislation are not exempt from the essential nexus (Nollan) and rough proportionality (Dolan) standards. Here's the second post, which covers the concurring opinions.

[Disclosure: this case is one of ours.]

In this post, we cover the background, and the Court's unanimous opinion.

* * * *

Does the government have the unfettered ability to demand "the goodies" (as one municipality's chief land use planner famously called them in the 1980s), simply because a property owner needs the government's approval to make use if his or her land?

That's the issue the Supreme Court agreed to resolve (or more accurately, clarify) in in Sheetz v. County of El Dorado, No. 22-1074 (Apr. 12, 2024).

Confessing Judgment: Game over man, game over!

After oral arguments a bit over three months ago, the Court's unanimous opinion by Justice Barrett issued last week wasn't too hard to predict. Especially because during the arguments the advocate for the County expressly acknowledged that there was "radical agreement" on the Question Presented in the case:

The question presented is whether a permit exaction is exempt from unconstitutional-conditions doctrine as applied in Nollan and Dolan simply because it is authorized by legislation.

The unanimity of the resulting decision reflects that with the County's acknowledgement on the record, it was all over but the shouting: the Court, as predicted, held that a blanket exaction (in this case a traffic impact fee) isn't exempt from the "essential nexus" and "rough proportionality" standards that have long governed exactions imposed ad hoc. See slip op. at 1 ("The Takings Clause does not distinguish between legislative and administrative permit conditions.").

Which leads to an obvious question: if the County was going to confess judgment by agreeing that legislative exactions are not categorically exempt -- a conclusion it contested in the lower courts -- why did it let the case get to decision stage at the Supreme Court? We're not at all sure. [Disclosure: this case is one of ours.]

Anyway, with that question asked (but not answered), let's see what the entire Court thought about this, and why.

Laying the Foundation: Nollan, Dolan, (and Koontz)

In 1987, the Court held that before the government can force a property owner into the choice between giving up something in return for government land use approvals, there must be an "essential nexus" between the demand and the owner's proposed use of land. Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987). And in 1994, the Court refined the requirement by recognizing the need for a "rough proportionality" between the burdens the owner's proposed use is predicted to put on the public, and the magnitude of the government's demand. Dolan v. City of Tigard, 512 U.S. 374 (1994). In Koontz v. St Johns River Water Management Dist., 570 U.S. 595 (2013), the Court further refined the doctrine by holding that demands for money are subject to the nexus and proportionality requirements as much as demands for land.

The close nexus and rough proportionality requirements were designed to check the government's temptation to use the land use approval process as an opportunity to leverage its power to regulate in furtherance of the public health, safety, welfare, or morals to exact land, money, or other property out of the applicant.

These requirements were motivated primarily by two concerns. First, if the government wants land or other property from an owner, it has the means to do so -- eminent domain, which comes with the requirement to provide the property owner just compensation; it should not use the land use regulatory process to get by regulation for free what it is required to pay for by a compensated taking. Second, there is something unseemly about the government demanding that an owner give up one of her constitutional rights (the right to compensation for a taking of property) as a condition of exercising another constitutional right (the right to make reasonable use of land). The government has no business forcing people into these kind of "money or your rights" choices.

But many lower courts refused to understand how broadly the close nexus and rough proportionality requirements applied, and for the longest time, they were split. Some held that Nollan and Dolan's requirements applied any time the government conditioned land use permits on either a surrender of land or money. Others, like California, held that unless the government was demanding the donation of land, and did so on a case-by-case basis as an exercise of discretion and not as a product of a legislative-imposed ministerial requirement, that nexus and proportionality were not required.

With a longstanding lower court split, the stage was set for Supreme Court review.

California Courts: We Don't Ask Whether The County's $23k Traffic Impact Fee Is Related, or Proportional, to Sheetz's Proposed Home

The facts of the Sheetz case are straightforward. George and Mrs. Sheetz, property owners in unincorporated rural El Dorado County, California, sought a building permit to "build a modest prefabricated house on the parcel, with plans to raise their grandson there" on their residental-zoned land. Slip op. at 3. The County was okay with issuing the permit, but only if Sheetz first paid the County's $23,420 traffic impact fee.

The impact fee was determined by the preset fee schedule in the County's General Plan, and not on a determination that the Sheetz home would increase the County's traffic burdens. California law treats the County's General Plan as legislation. In recent years, the area has seen dramatic growth, with related demands on infrastructure, the County uses the traffic fees to fund improvements to county roads. The rates for the traffic impact fees are fixed, and set by the schedule:

The fee amount is determined by a rate schedule, which takes into account the type of development (commercial, residential, and so on) and its location within the County. The amount is not based on "the cost specifically attributable to the particular project on which the fee is imposed."

Slip op. at 2 (citation omitted).

The General Plan prohibited the County from issuing building permits without collecting the fee, so "Sheetz paid the fee under protest and obtained the permit." Slip op. at 3. He filed suit in state court for a refund, arguing inter alia, that the County's conditioning the issuance of a building permit was an unlawful exaction of money, because the County had not demonstrated either a close nexus between the requested building permit for a "modest prefabricated house" and any additional traffic burdens this use of the property created in the County, or a rough proportionality between the scheduled amount of $23k and those same supposed traffic burdens.

The trial court prohibited Sheetz from asserting the claim. Under California law, the Nollan/Dolan requirements apply only "to permit conditions imposed 'on an individual and discretionary basis[,]'" and do not allow for any kind of judicial inquiry into nexus or proportionality when the condition is imposed on every applicant by broadly-applicable legislation. Slip op. at 3 (citation omitted).

The rule in California (and some other other jurisdictions) is that broadly-applicable rules like this, imposed ministerially on everyone and not individually, are just plain-old land use legislation, to be examined by courts (like zoning regulations) only under the rational basis test. And you know what that means: nearly everything passes muster.

As noted above, other courts went a different way. North Carolina, for example. See slip op. at 4 & n.3, where the opinion lays out a part of the lower court split of authority.

A Regulatory Takings Primer: the Right to Just Compensation and the Police Power "seem more like in-laws than soulmates"

The next portion of the opinion is a worthy read if you want to get an overall flavor of what all nine Justices of the Court think about regulatory takings today. Yes, the theory has been recognized as a federal constitutional doctrine for more than a century, but any insights we get into how the current Justices view the doctrine are going to be helpful. And there are a lot of clues embedded in Justice Barrett's opinion:

• Public Use. The opinion starts off with the idea that "[w]hen the government want to take private property to build roads, courthouses, or other public projects, it must compensate the owner at fair market value." Slip op. at 4. Focus on the examples the opinion lays out. All are "classic" public uses, and the opinion conspicuously avoids citing Kelo, its most recent eminent domain decision, where the project involved taking Kelo's property and turning it over to another private owner. So maybe that omission is a hint that Court would be open to revisiting Kelo's very reviled opinion.
• Takings law spreads the cost. The opinion next lays out the Armstrong rationale: the point of the Takings Clause and the requirement that government "pay for what it takes," is to avoid focusing the cost of public burdens on individual property owners. Id. Good to know that all nine Justices understand the big vibe of both eminent domain and de facto takings.
• De facto takings by over-regulation. Next, the opinion highlights the essential tension behind the regulatory takings doctrine and straight up eminent domain (what the Chief Justice calls an "upfront taking;" see PennEast Pipeline Co. v. New Jersey, 594 U.S. ___ (2021)). The essential question is when does an exercise of regulatory power "go too far" such that it has the same effects on the property owner's rights as an exercise of eminent domain?
• Per se regulatory takings. The Sheetz opinion noted the government's "substantial authority to regulate land use" on one hand, and on the other the various rules the Court has established for when that authority goes too far and triggers the obligation to pay compensation. Slip op. at 4-5. Things like when a regulation physically appropriates property, or "otherwise interfere[s]" with the owner's right to exclude others = easy analysis, compensation always required. 
• Euclid and land-use regulations. But "different rules apply" when government "merely restrict[s] how land is used." Slip op. at 5.
• Substantially advance? You takings mavens can be forgiven for a bit of an inside baseball chuckle for how the opinion lays out those different rules. The Court described the regulatory takings test thusly: "'[T]he Fifth Amendment is violated when land-use regulation does not substantially advance legitimate state interests or denies an owner economically viable use of his land[.]"” Id. (quoting Lucas v. South Carolina Coastal Council, 505 U. S. 1003, 1016 (1992)  (internal quotation marks omitted).
• Whoa!  Has Agins been resurrected? (Recall that in Lingle, the unanimous Court rejected Agins's "substantially advance" standard as a regulatory takings test.) No, we doubt that this was intended to bring back Agins. But this also doesn't seem to be merely a (mis)citation to the takings test as set out in Lucas (1994) before the Court clarified it in Lingle (2005).
• Character of the government action. Instead, we're viewing the Court's recitation of the regulatory takings test that "[a] use restriction that is 'reasonably necessary to the effectuation of a substantial government purpose' is not a taking unless it saps too much of the property's value or frustrates the owner's investment-backed expectations[,]" as meaning that Penn Central's "character of the government action" factor requires that regulation be reasonably necessary for the effectuation of a substantial government purpose." That isn't the rational basis test that many courts currently apply when asking about the character of the government action, is it? If so, this is a major clarification that deserves more attention.  
• Double whoa! Justice Barrett also treats Penn Central as a disjunctive test ("or frustrates the owner's investment-backed expectations"). That's a correct view of the Penn Central test we think, but many (many) lower courts have not received the message and treat it as a "one strike and you're out" (conjunctive) rule and not a series of factors to be weighed by a jury -- where a single factor could be dispositive, but also where failing to convince on a single factor is not an automatic loss. See Hodel v. Irving, 481 U.S. 704 (717) (1987) (proof of a single Penn Central factor alone could be sufficient to show a taking; in the case, "the character of the Government regulation ... is extraordinary"). 
• Very cheeky. The money quote in this part of the opinion might just be Justice Barrett's assertion that the relationship between the police power to regulate the use of property, and private property owners' right to just compensation is "more like in-laws than soulmates." Slip op. at 4. Probably not BFFs, but more like frenemies, Your Honor? We recommend lawprof Josh Blackman's take on this turn of the phrase ("Justice Barrett on the Takings Clause and the Police Power").

On To Exactions...Err "Permit Conditions"

The special application of the takings rules to permit conditions is "more complicated."

The opinion starts off with the premise that if the government can deny a building permit for some "'legitimate police-power purpose,' then it can also place conditions on [a grant of] the permit that serve the same ends." Slip op. at 5 (citation omitted).

[Sidebar: no one has adequately explained to us how the County could condition a building permit -- the classic example of a "must issue" ministerial permit -- on anything but the application's failure to comply with the Building Code. An application for a building permit does not involve any exercise of the government's discretion, at least in our experience.]

Here, if Sheetz's home would "substantially increase traffic congestion," then the County could legitimately condition its approval of the building permit on Sheetz's willingness to pony up land or money for road improvements. This, according to the Court is "the hallmark of responsible land-use policy." Id. (citation omitted). When this situation exists, then the government is within its authority if it tells the owner that it must accept the condition or else no government approvals will be forthcoming.

But (and this is a significant "but"), "[t]he bargain takes on a different character when the government withholds or conditions a building permit for reasons unrelated to its [legitimate] land-use interests." Slip op. at 5-6. (Remember, the County's police power interests here are limited in the Court's view to traffic mitigation.) In such a case, the condition isn't being employed to further the health, safety, or welfare of the public (traffic mitigation), but takes on the character of "an out-and-out plan of extortion[,]" an "abuse of the permitting process." Slip op. at 6 (citation omitted). Show us the money!

After reciting the Nollan "essential nexus" and Dolan's "rough proportionality" requirements, the opinion next noted that the "nexus requirement ensures that the government is acting to further its stated purpose, not leveraging its permitting monopoly to exact private property without paying for it." Id. The rough proportionality requirement serves the same function, but from a slightly different angle: "[a] permit condition that requires a landowner to give up more than is necessary to mitigate harms resulting from new development has the same potential for abuse as a condition that is unrelated to that purpose." Id.

Wait, since when can legislation be subject to more exacting judicial review than the oft-applied rational basis test? After all, California law considers the County's General Plan to be legislation, adopted by a legislative body. Why isn't this treated like other legislation? The opinion stated it succinctly:

Nothing in constitutional text, history, or precedent supports exempting legislatures from ordinary takings rules.

Slip op. at 7.

We're going to emphasize the "takings rules" part of that sentence because it highlights what we've always thought was the problem with the analysis applied by those lower courts which focused on the form or source of the condition (legislative/legislature) rather than the effect the condition had. Perhaps applying the tiers-of-scrutiny method is what is called for when the challenge asks whether a regulation arbitrarily and capriciously interferes with a constitutional right. But the entire Court, it seems, views takings as a independent limitation on the power of government, subject to different rules. 

The opinion next laid out seriatim the "text, history, [and] precedent" to support its conclusion that conditions-from-legislation are to be treated on "equal footing" with every other condition, regardless of source.

• Text. After chiding the framers for the syntax of the Takings Clause ("[t]he Clause ... speaks in the passive voice"), the opinion noted that it "does not single out legislative acts for special treatment. Nor does the Fourteenth Amendment, which incorporates the Takings Clause against the States." Id. On one hand, this seems very noncontroversial. Of course legislation and legislatures are subject to the limitations the Fifth and Fourteenth Amendment place on them. Yet we've had several decades of some lower courts concluding otherwise, mainly because (in our view) they can't get past the form (legislation) to the substance (your money or your rights). 
• History. Legislation was how governments exercised their eminent domain power (today and historically), so "[s]pecial deference for legislative takings would have made little sense historically[.]" Slip op. at 7. This analysis tells us that once regulation is deemed a taking requiring compensation, the entire Court views the regulation as having taken on a different character. Instead of merely regulating property's uses, these regulations require compensation as if the legislature had exercised its eminent domain power, and not its police power.
• Precedent. The opinion noted that "[w]e have applied the per se [physical takings] rule requiring just compensation to both legislation and administrative action." Slip op. at 9. And to regulatory takings. Indeed, in the "big one" (Pennsylvania Coal Co. v. Mahon), the Court held that a Pennsylvania statute went "too far" was was a taking.

The Court also put the Nollan/Dolan test into a larger context, the "unconstitutional conditions" doctrine that covers other areas like free speech, the right to travel freely, and other constitutional rights, noting that in these areas, legislative conditions are regularly challenged. See slip op. at 10.

In sum, there is no basis for affording property rights less protection in the hands of legislators than administrators.The Takings Clause applies equally to both—which means that it prohibits legislatures and agencies alike from imposing unconstitutional conditions on land-use permits.

Id.

The majority opinion summed up by noting the "radical agreement" and the County's oral argument acknowledgement that it agreed with Mr. Sheetz (at least on the Question Presented):

The County no longer contends otherwise. In fact, at oral argument, the parties expressed “radical agreement” that conditions on building permits are not exempt from scrutiny under Nollan and Dolan just because a legislature imposed them. Tr. of Oral Arg. 4, 73–74. The County was wise to distance itself from the rule applied by the California Court of Appeal, because, as we have explained, a legislative exception to the ordinary takings rules finds no support in constitutional text, history, or precedent.

Slip op. at 10.

The Court took no position on whether the County's traffic impact fee has an essential nexus to the Sheetz development, or whether $23 grand is roughly proportional to any traffic his proposal might be responsible for. For this and more, the Court remanded the case. Notably, the Court did not decide whether "a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development." Slip op. at 9-10.

In our next post, we'll cover the three concurring opinions, to thoughts about what Sheetz might mean, and what's on the horizon.

Sheetz v. County of El Dorado, No. 22-2074 (U.S. Apr. 12, 2024)

Sheetz Round-Up

Here's what folks are saying about yesterday's unanimous U.S. Supreme Court decision in Sheetz v. County of El Dorado, where the Court held that impact fees and exactions imposed by legislative action are not categorically immune from the close nexus and rough proportionality requirements already applicable to ad hoc/administratively-imposed exactions under Nollan, Dolan, and Koontz.

• Ilya Somin, "Supreme Court Rules There Is No 'Legislative Exception' to the Takings Clause" (Volokh) ("At oral argument, it seemed like the justices might be interested in going beyond the legislative exception issue, possibly addressing the underlying question of whether the fee imposed in this case was a taking or not. However, the Court chose not to deal with that question, which will now be remanded back to the California state courts for their consideration.")
• Editorial Board, "A Bad Day for Greedy Politicians at the Supreme Court" (Wall St. Journal) ("But Justice Neil Gorsuch wrote in a concurrence that the Court’s Nollan and Dolan tests should apply similarly when “an alleged taking affects a ‘class of properties’” as with a particular development. We tend to agree, and the question may return to the Court. The good news for now is that elected officials can’t extort property developers with impunity")
• Amy Howe, "Court rules for property owner in building fee dispute" (SCOTUSblog) ("In her 11-page opinion for a unanimous court, Barrett explained that nothing in the text of the Constitution indicates that the takings clause does not apply to fees imposed by legislatures. The same is true, she continued, for the history of the takings clause. 'In fact,' she wrote, 'special deference for legislative takings would have made little sense historically, because legislation was the conventional way that governments exercised their eminent domain power.' Nor, she added, do the Supreme Court’s cases interpreting the takings clause distinguish in any way 'between legislation and other official acts.'")
• Charles Gardner and Emily Hamilton, "Opinion: This Supreme Court case from California could ease housing shortages everywhere" (Los Angeles Times) ("When 'impact fees' are unmoored from the increased costs a city or county will incur because of a new house or development, the fees can do more than present someone with an unfair bill — they can also reduce housing construction. In a country where a shortage of homes has led to sky-high prices, this matters more than you might think.")
• Amanda Karras, "Supreme Court Decides Impact Fee Case" (IMLA blog) ("The Court’s narrow ruling was not entirely surprising after oral argument as it noted that the parties agreed on this bottom line holding as the County conceded at oral argument that 'building permits are not exempt from scrutiny under Nollan and Dolan just because a legislature imposed them.' The silver lining was that in reaching this narrow holding, the Court declined to address any other arguments 'including whether a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development.' In other words, the Court did not rule on Mr. Sheetz's arguments that Nollan and Dolan require local governments to make individualized determinations regarding the impact fees.")

We'll have more, including our own thoughts soon.

Unanimous SCOTUS Delivers A YIMBY Blow: "The Takings Clause does not distinguish between legislative and administrative permit conditions."

This just in: the U.S. Supreme Court has issued a unanimous opinion in Sheetz v. County of El Dorado, a case we've been following (not only because it is one of ours).

The Court, as predicted, held that an exaction (in this case a traffic impact fee) isn't immune from the Nollan/Dolan nexus and rough proportionality requirements merely because the exaction is imposed by legislation.

At heart, this is a very pro-YIMBY decision because it gives property owners and housing builders a path to object to barriers to creating housing and the government's use of the land use approval process as a way of exacting "goodies" that increase housing costs.

While we digest the opinion and the multiple concurring opinions -- we shall post more once we do so -- you can either read the opinions themselves, or see what we thought after the oral arguments. Or both.

Stay tuned.

Sheetz v. County of El Dorado, No. 22-2074 (U.S. Apr. 12, 2024)

NY App Div: Yes, We Previously Said This Taking Wasn't For A Public Use, But Now The Condemnor Has A Plan

The New York Supreme Court Appellate Division's opinion in HBC Victor LLC v. Town of Victor, No. 23-01347 (Mar. 22, 2024) marks the second time the issue of whether the Town can seize HBC's property by eminent domain.

The first time out the court shot down the taking, concluding that it lacked a valid public use because the Town did not have a present plan for the property and the resolution of taking did not specify the present purpose other than "redevelopment." And that isn't enough.

As you know, that doesn't mean the end of the line when it comes to eminent domain. As we often used to counsel clients when we did this stuff, beating back a taking on public use grounds just educates the condemnor about the shortcomings. Unlike other civil litigation, there's no res judicata (sorry kids, that's what we still call it) in eminent domain, and a condemnor committed to the cause can keep trying and trying until it gets it right. Here's an example of that.

After being rebuffed, the Town gave it another go. Instead of just saying it was taking the property for "redevelopment" and not identifying a future use, the second time around it said it was taking the property for redevelopment and turn over to tenants who claim they will make better use than the present owner:

Inasmuch as one of the Town’s stated public purposes is to facilitate an economic redevelopment project that would permit the vacant and underutilized property to be turned into space appropriate for lease to an international department store and a grocer, both of which have expressed interest in becoming tenants, we conclude that the Town met its burden of establishing a legitimate public purpose for the condemnation (see Penney Prop. Sub Holdings LLC, 220 AD3d at 1171).

Slip op. at 2. That was good enough for the court because it met the very low standards applicable to public use challenges: "any" use which might contribute to the public health, safety, or welfare. Id. 

True, that wasn't what the Town said when it first tried to take the property, but the owner's prior successful challenge made it realize the error of its ways:

Although the Town initially stated at the public hearing that it had not yet determined what it would do with that portion of the property, the Town subsequently narrowed its public use in its determination and findings to a “community and recreation center space to provide for and enhance the Town’s public services” as part of creating a “vibrant, sought-after retail, community and recreation destination” on the property.

Slip op. at 3.

For good measure, the Town threw in its intent to "use a portion of the building for an 11,000-square-foot community and recreation space[.]" Id. That is "a viable public purpose[.]" Id.

The court also made short work of the owner's claim that the private-to-private transfer made the taking suspect. This is New York, and in New York "it is well settled" that the taking from A to transfer the property to B is just fine, as long as the transfer is part of a redevelopment plan. Finally, the court rejected the owner's claim that there was no plan. Recall that in Kelo, the U.S. Supreme Court "Euclid-ized" public use by concluding that the private redistribution of property by eminent domain was ok as long as it was part of an "integrated development plan"

It is further argued that without a bright-line rule nothing would stop a city from transferring citizen A’s property to citizen B for the sole reason that citizen B will put the property to a more productive use and thus pay more taxes. Such a one-to-one transfer of property, executed outside the confines of an integrated development plan, is not presented in this case. While such an unusual exercise of government power would certainly raise a suspicion that a private purpose was afoot, the hypothetical cases posited by petitioners can be confronted if and when they arise. They do not warrant the crafting of an artificial restriction on the concept of public use.

The Town's plan here was its comprehensive plan (you know, the zoning thing). As you land users know, most of these municipal general plans (hat tip Professor Haar) contain generalized statements of long-term goals for land use within the jurisdiction. Pie-in-the-sky sometimes, other times very parcel specific. Which causes us to ask: are any proposed uses incompatible with a general plan?

HBC Victor LLC v. Town of Victor, No. 23-01347 (N.Y. App. Div. Mar. 22, 2024)

APA Program: "Planning Law Careers in Land Development" (Wed, Mar 27, 2024)

If you've been around us long enough, you know that we're big into the notion of "generational handoff" and doing what we can to make sure that students and others who are building their careers realize that dirt law and related topics are very good areas in which to find your way.

Well, here's the latest -- a free webinar from the American Planning Association's Planning and Law Division:

Second in a series of webinars aiming to answer student questions about career paths in the planning and law field, this webinar focuses on individuals working, or interested in working, in developing the built environment. Developers, as the main constructors of the built environment, must be familiar with urban conditions and the legal requirements that govern building on or redeveloping land. In-house counsel for development firms help their clients navigate through legal matters related to developing the built environment. Join us for a 90-minute discussion with four expert panelists, covering topics that include possible career paths in the private sphere, changes in the planning and law field over the years, and the experience and skills needed to enter the field, all with a focus on developers and in-house counsel. This webinar is for students, young professionals, and anyone who is interested in learning more about where a degree in planning, law, or both can take you in the private sphere.

Details:

Date: Wednesday, March 27, 2024
Time: 10:30 a.m. - 12:00 noon EDT
Cost: Free
Registration: https://www.planning.org/events/eventsingle/9286709/

Speakers:

Kyle McClammer
General Counsel of The Garrett Companies

Ricqui Brager, AICP
Planner with the Regional Planning & Environmental Center (RPEC) of the U.S. Army Corps of Engineers, Fort Worth District

Leona Hammill
Leona Hammill joined NewQuest Properties in 2015 and has served as General Counsel since 2021

Brodie Smith
Brodie Smith is a project manager for Thrive Home Builders in Denver, Colorado

Register and attend!

Pass A Good Time: Our Report From The 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-3, 2024, New Orleans

When it comes to the longstanding ALI-CLE American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conferences, we're always ready to go. You know that. But this year's version -- the 41st -- was buzzing like no other in recent memory.

Maybe it was the New Orleans venue with its atmo, food, and music for our after-class activities, or even the timing (the second-to-last week on the Mardi Gras parade season, and our conference hotel was right on the routes). It might have been the nice weather (oh, it rained buckets one evening, but there wasn't an ice storm like we experienced in Austin in 2023). Or maybe it was the capacity crowd, and new topics and speakers on the agenda. Or maybe it was just the prospect of seeing our friends and colleagues again after a year.

Here's a photo essay of some of the Conference highlights.

And if you missed out, the webcast was recorded and is available for viewing. Or, better yet, hold on your calendar January 30 through February 1, 2025 for the 42d Conference, to be held at the Westin Bayside San Diego.

Excitement this way...

The view from the podium.
Say "hello" to our opening plenary session in wide-angle.

Prepping the space.
The finished stage that Conference attendees
see isn't how the room starts off.
It takes a lot of work by the ALI-CLE staff
to get the place camera-ready.

The live webcasting of the sessions also takes a lot of
set-up and a ton of equipment. This is just some of it. 

Here's more. 

The badges were arranged on the table with care...

...in trust that our faculty and registrants would soon be there.

No conference would be complete without swag.
Here is but a sampling.

As always, a huge thank you to our generous sponsors.
Without your support, this Conference would not be as
good as it is, year after year.


The Conference site was right on the routes of several parades.
It was difficult to keep focusing on severance damages and larger parcel
when the music and excitement was just outside.
But we tried.


The opening plenary session -- on the U.S. Supreme Court's
big takings case -- got us off to a solid start.


Thanks to Christina Martin and Steve Silva for speaking
on Tyler v Hennepin County.

The view from the podium as Amy Boulris speaks about the most
significant eminent domain decisions of 2023.

The speakers are a mix of practicing lawyers, judges, other eminent domain
professionals, and legal academics. Here, two property scholars --
Timothy Harris and Jessica Asbridge --
discuss how state property law and state courts
can drive the constitutional issues.

Kinnon Williams, Esq. and Christina Thoreson, SR-WA, MAI, CRE 
present on "Valuation of Wasting Assets."

Lawprof Emilio Longoria and attorney Tony Francois
on "What Condemnation Lawyers Need to Understand
About the Clean Water Act After Sackett"
(hint: it goes to highest and best use).

Matthew Ackerman, Marianna Baggett, and Kenneth Haywood
on "The Pitfalls of Objectively Measured Just Compensation:
When Market Value Isn't Enough."

It was not all work and no play.
Again, a big thanks to our generous sponsors.

Our speakers take questions, of course.
We solicit them the old-fashioned way (thanks, James Masterman).

William and Mary Law School Professor
Emerita Lynda Butler (and her former student, North Carolina's
Jeremy Hopkins" discuss property rights in an age of coastal retreat.

Luis Gallardo-Rivera, Dana Berliner, and (off-camera)
Sophia Holley on "Proving and Defending Pretext,
Public Use, and Necessity."

James Masterman and Martye Kendrick on "Preparing Your Witness
to Overcome Obstacles to Highest and Best Use."

Jeff McCoy, Robert McNamara, and Kristen Renfro on
"Getting to Federal Court and Staying There:
Navigating Procedural Mazes in Federal Takings Claims."

Sean Metherell and Nathan Farris zero in on
"How to Win a Future Highest and Best Use Claim: Proving Reasonable
Probability of Rezoning and Other Issues."

Michael Berger is Watching You:
SCOTUS Property Rights Maven Michael Berger zooms in with his
annual "Regulatory Takings Update."

We always hold a spot for Jim Burling on Saturday.
Why? Because his tours-de-force always are interesting
and put people in seats, even on a Saturday morning.

More Big Michael.
Here, sharing his memories of Professor Gideon Kanner.

See you in San Diego!
January 30 - February 1, 2025
Westin San Diego Bayside

2024 Distinguished Gifford Property Lecture - Professor Carol N. Brown (Richmond Law) (March 12, 2024, U. Hawaii Law School)

Join us and our Land Use class, in-person on the campus of the University of Hawaii Law School (or online via Zoom, where it will be livestreamed), as Richmond Law lawprof Carol Brown delivers the 2024 Distinguished Gifford Lecture in Real Property, on March 24, 2024, at 4:40 p.m. Hawaii Time in the Cades Schutte classroom.

Her talk is titled "Affordable Housing A to Z" and is very timely. More details on this flyer.

Made possible by the generosity of one of Hawaii's premiere dirt law firms, Carlsmith Ball, LLP.

Space is limited, so please RSVP here.

2024 Distinguished Gifford Property Lecture - Professor Carol N. Brown (Richmond Law) (March 12, 2024, U. H...