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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Can One Government Official Really Hold Up Necessary Water Uses? The Hawaii Public Water Trust In Action

According to the County, this is an "industrial" use,
incompatible with "agricultural" zoning

Note: sorry, this is one of those longer posts, but the topic is a serious one, so we felt it needed more than our usual cursory treatment.

How Can That Be?

We've been somewhat reluctant to post too much on the legal aspects of the Maui wildfires (other than to comment on the first lawsuit), just because it still seems "too soon." The focus should be on aiding the victims and helping those who want to rebuild to do so, and not on premature blamestorming (see also this), legal theories, and  the "opportunities" this disaster presents (see also this, this.and this).

But we did want to clear one thing up. There are a lot of stories (see here, here, and here, for example), about the State of Hawaii official -- the Deputy Director of the Commission on Water Resource Management and an employee of the State Department of Land and Natural Resources -- who allegedly refused for several hours to release water as requested to fill reservoirs, until first obtaining the approval of a taro farmer.

A lot of the reaction has been of the "how could this be?" variety. How can a government official refuse to release water needed for fire suppression? How is it that a private kalo (taro) farmer needed to be asked for approval? Can this be accurate?

Short story: yes.

This is exactly how Hawaii's water law is designed to work, and is the system functioning as intended. And please don't get us wrong -- we're not at all suggesting that working-as-designed has resulted in a system that actually, you know, works. No, we are being purely descriptive, not normative, and just laying out our experience about how Hawaii water law plays out day-to-day in all its intended glory.

Bottom line: the water law regime in Hawaii is designed so that a government official can hold up water uses -- even if that use is to fight fires.

No Private Rights

First, it is essential to understand that conflicts over water use are not a new thing, and have been ongoing for centuries. Second, you must realize that all water in Hawaii -- and by that we mean all water -- fresh, salt, surface, ground, runoff, freshet, riparian, stream, ocean, lake, you-name-it -- is owned by the public, and administered by every agency at every level of state and municipal government under a trust-beneficiary model.

This approach is unique to Hawaii. But how did it develop?

It wasn't always this way, and for more than a century, Hawaii's water law -- mostly developed though court cases -- followed its English and American counterparts with a few local modifications. The law recognized private rights to "own" and use water, subject to the rights of others.

But in the 1960's and 1970's, the activist Hawaii Supreme Court began altering the governing law, ultimately concluding that water resources are (and have always been) incapable of private ownership -- despite a century of Hawaii common law that seemed to hold otherwise. The court began developing the idea that water is a public resource and consequently is impressed with a "public trust."

In a clever bit of sleight-of-law, the court held that the "public trust' doctrine was adopted by the Kingdom courts in the 19th Century, and then "later decisions of this court confirmed the acceptance of the public trust doctrine in this jurisdiction." Kelly v. 1250 Oceanside Partners, 140 P.3d 985, 1002 (Haw. 2006). The problem with that conclusion is that the "public trust" doctrine referred to in the 19th Century Kingdom cases was the traditional public trust -- the one that has its roots in Roman and English law -- the public's right to use navigable waters for activities such as commerce, navigation, and fishing. It had nothing to do with ownership of the water, or water rights, or the government's authority to control and regulate uses. Instead, the newly created "public trust" doctrine the Hawaii Supreme Court was referring to was much broader, and applied to all water whether navigable or not, and all uses whether related to commerce or navigation.

National Property Scholar: You Keep Using the Term "Public Trust." I Do Not Think It Means What You Think It Means

As renown property and water rights scholar Thomas Merrill wrote:

The public trust doctrine burst forth in Hawaii, in a big time way, as part of a series of highly controversial decisions by the state supreme court involving water rights. The rights in question did not involve the public right of access to navigable waters for commerce and fishing -- the classic issue in Illinois Central and Oahu Railway. Instead, these decisions have involved the rights to consumptive uses of water for purposes like irrigation or public drinking water systems -- what the Hawaii courts call "water resources" law. The public trust doctrine has never been applied to water resources in this sense in Illinois or New York. Indeed, the only other state besides Hawaii that has extended the doctrine in this fashion is California. And even there, the famous Mono Lake decision involved the diversion of waters by the city of Los Angeles from tributaries of a navigable lake, so the diversion had an impact on navigation. In Hawaii, the connection to navigation has been cut altogether.

See Merrill, The Public Trust Doctrine: Some Jurisprudential Variations and Their Implications, 38 U. Haw. L. Rev. 261, 276-277 (2016) (footnotes omitted). (For a much different view of this, see this story.)

In altering the longstanding rules, the Hawaii Supreme Court based its rulings on, among other things, a 1978 amendment to the Hawaii Constitution, which, according to the court, publicized all water resources:

The State has an obligation to protect, control and regulate the use of Hawaii's water resources for the benefit of its people.

The legislature shall provide for a water resources agency which, as provided by law, shall set overall water conservation, quality and use policies; define beneficial and reasonable uses; protect ground and surface water resources, watersheds and natural stream environments; establish criteria for water use priorities while assuring appurtenant rights and existing correlative and riparian uses and establish procedures for regulating all uses of Hawaii's water resources.

Haw. Const. art. XI, § 7.

The long and the short of it is that all Hawaii water is incapable of private ownership. (So if anyone tells you that there are what you think of as "water rights" in Hawaii, they are in our opinion mistaken. Or at least the concept of a substantial private interest in water is markedly different in Hawaii than elsewhere.) In case you are wondering, yes, there have been challenges to this altered water regime as a taking, both legislative and judicial. But those cases mostly went nowhere, with the most significant challenge crashing and burning on the shoals of Williamson County's ripeness doctrine.

The Regulatory Regime

Next, after effectively publicizing private water rights, the Hawaii Supreme Court imposed a regulatory system -- again based on this new "public [water] trust" concept -- on how the State and its subsidiaries and agencies were to "control and regulate" water (as that term is used in article XI, noted above). The obligation to control and regulate water use extends to all uses of water, no matter how de minimis the use, or how necessary (such as fire suppression).

If you think we might be exaggerating about this, we offer an example (other than the Maui fire situation), from one of our own cases from when we were in private practice.

Setting the Stage for Lahaina

In Kauai Springs, Inc. v. Planning Comm'n of the Cnty. of Kauai, 324 P.3d 951 (Haw. 2014), "Kauai Springs" was a small, family owned business that purchased approximately 750 gallons per day of water emanating from a natural spring on the island of Kauai. For more than a century, thousands of gallons of water per day had naturally flowed out of the spring, where it was channeled into an above-ground pipeline to irrigate sugar fields several miles from the source. The water wasn't pumped out or down -- gravity did the work. When the sugar plantations went away in more recent times, a small portion of the water in the pipe was used by several nearby homes as drinking water, but otherwise, thousands of gallons of water per day emptied from the pipeline into a nearby stream bed where it eventually flowed into the ocean.

Sensing an opportunity, a Kauai family obtained a license from the owner of the spring to capture some of that water, ensure it was up to USDA water quality standards, and bottle it in those 5-gallon plastic bottles that go on top of a dispenser unit. The family would deliver these to homes and offices on the island.

The problems began when someone dropped dime and reported to the Kauai County Planning Department that Kauai Springs was making an "industrial" use of land zoned for agriculture. Sure enough, planning officials paid a visit and issued a notice of violation and a shut down order.

Kauai Springs sought after-the-fact permits allowing its use as either a special use, or as a conditional use. You land users understand that when an unpermitted use is kind of like a permitted use, and really won't have much of an impact on the land, then very often the owner may be allowed to make an otherwise unpermitted use. That was the case here, where Kauai Springs argued that putting water into 5 gallon bottles at its facility (see photo above) was not that much different than typical agricultural uses, and had no significant different impacts on the land or the surrounding properties.

But the County of Kauai denied the permits. Why? Not because the building (see above photo) or the low-impact activity of bottling water are incompatible with agricultural zoning. Rather, it was because Kauai Springs was bottling water, and it had not proven that using 750 gallons per day from the pipeline flowing thousands of gallons per day into the ocean would not significantly impact the water resources of the County of Kauai.

You read that right. Seven-hundred-and-fifty gallons per day represented .22% (that's 0.0022 for you who are mathematically-challenged like me) of the total daily output of the spring. So minuscule that when we tried to create a demonstrative exhibit to show how little this was "impacting" water resources, it was impossible because in order to get the X-axis (Kauai Springs' useage) large enough to be visible, the Y-axis (total volume) would not fit on any reasonably-sized poster board - it would have needed to be yards long. 

Additionally, the County said that until the State Public Utilities Commission and the State Commission on Water Resources had weighed in, it was premature for the County to grant a zoning permit that might affect the County's water resources. Never mind that both agencies did not have subject matter jurisdiction over this, and had told the County so.

An Already Long Story Shorter

By the time the case reached the Hawaii Supreme Court, the first big issue was whether under the Hawaii public water trust, county agencies like the Kauai County Planning Department and Planning Commission have an obligation to make searching inquiries into whether the grant of zoning permits might affect the County's water resources. After all, neither agency has any expertise in the area of water regulation. Their expertise, if any, is in land use, not water and hydrology. Surely the public trust cannot be read as requiring every state and local agency to make its own independent determination about water resources, and in the case of Kauai Springs, the County agencies could simply adopt the views of the State PUC and the State Commission on Water Resource Management that there was nothing here to worry about.

The second question was who has the burden of demonstrating that use of 750 gallons per day would or would not detrimentally impact the County's water resources. While that might seem like a common-sense determination in light of the overall amount (.22%), the court was asked whether the County could deny the zoning permits on the basis that Kauai Springs had not met its burden to show to the satisfaction of the County that 750 gpd would not have a serious impact on the County's overall water resources. (Remember, Kauai bills itself as one of the "wettest spots on Earth.")

Could the County rely on the precautionary principle writ large? Does Hawaii's public water trust really enshrine the principle of inaction in the face of any doubt?

The Precautionary Principle Reaches the Parody Stage

Bottom line: yes, it does.

The Hawaii Supreme Court held that every agency and official in Hawaii -- state and county -- has a duty under Hawaii's public water trust to protect water resources. It doesn't matter whether the agency has any type of interest or expertise in water regulation, or the decision it is being asked to make (remember that Kauai Springs was asking the County for zoning permits, not asking its permission to use the water).

The court rejected the extreme hypothetical we posed - does the public water trust require that the local DMV make an inquiry about whether issuing a commercial driver license to the driver of a water company truck? After all, issuing a CDL to someone who drives a truck to deliver water might affect the public's water resources. Aw, come on that is ridiculous you say? What business does the DMV have in regulation of water uses? Every business, the court held. The public water trust is a sacred obligation, and the court held that the Hawaii Constitution's language ("The State has an obligation to protect, control and regulate the use of Hawaii's water resources for the benefit of its people.") means that the State itself, every State agency, and every municipality and municipal agency has an obligation to "protect, control and regulate" water. Yes, even the DMV.

Moreover, to fulfill this duty, these officials and agencies cannot rely on the conclusions of other -- perhaps more appropriate and expert -- agencies and officials. Thus, the Kauai Planning Department and the Planning Commission could not consider their public trust duties fulfilled by noting that the State Commission on Water Resources and the state PUC had both disclaimed any interest in Kauai Springs. The County agencies have an obligation to make their own independent determinations.

Next, the court concluded that the public trust duty is fulfilled by these agencies and officials if they rely on the precautionary principle to place the burden on the user of water and do nothing if the user can't disprove that its use will not adversely impact water resources. In the absence of convincing proof of no impact, the government as the trustee of the public water trust can deny, deny, deny any request for action.

Thus, the County properly denied Kauai Springs' zoning permits.

How it Works

This regime works as it intended (to slow or stop development, to give anyone who might object to a use or action a way to challenge it, and to not act when in doubt (which there almost always is)). But you can see how this regime can be deployed selectively. For example, after the Supreme Court issued its opinion, a liquor manufacturing facility across the highway from Kauai Springs sailed through the zoning and permitting process without a squeak of objection even though it makes its product from water from the exact same water source that resulted in the problem with Kauai Springs, and uses a ton more water. But did anyone even ask whether making liquor (whose main ingredient is water) would affect water resources and insist that the producer disprove an adverse impact on Kauai's water resources? 

No, and there's the rub. The way this works is that officials and agencies have nearly total discretion to apply the exacting public water trust standards ad hoc. There's no requirement of comprehensiveness, or that every action be evaluated under the public water trust. Only a requirement that every agency and official do so when prompted (either sua sponte, or by third-party objectors who object to the underlying action).  

In short, if Water User "A" can stay off the radar, no sweat. Nobody seems to want to challenge the liquor producer, or new hotels (which use a ton of water daily without any restrictions), or the new car wash. But if someone drops a dime on Water User "B," or B ends up on its own catching a government official's attention, then the Kauai Springs principles spring into action:

If there's doubt, do nothing

In our opinion, that's what looks like might have gone on when that State of Hawaii official did not immediately act to release water for fire suppression (if that is indeed accurate, as the news stories report). You can see how government agencies and officials -- used to denying, delaying, and deferring -- are not really that used to acting quickly and decisively to release the precious public resource of water, even when the situation dictates quick action. After all, a wrong move will invite claims that the official -- a trustee of the trust with fiduciary responsibilities to the public to preserve, protect, and conserve the resource -- breached this sacred duty.

In short, Hawaii's water law is very conservative: go slow, do nothing, be sure before you act; there's no downside to doing nothing.

To answer this post's headline's question, "Can one government official really hold up necessary water uses?"

You bet. That's the Hawaii public water trust working as it was intended. There isn't a necessity, or let's-save-some-lives exception, at least just yet.

Sadly, it looks to us like this just had some devastating consequences.

Kauai Springs, Inc. v. Planning Comm'n of the Cnty. of Kauai, No. SCWC-29440 (Haw. Feb. 28, 2014)

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

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

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

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

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

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

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

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

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

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

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

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

So please don't miss out.

The Property Rights Hall of Fame (second plaque)

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

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

Details here.

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

Come, join us!

"YIMBY Martial Law" - More On Hawaii Gov's Gordian Knot Cutting

Here's an excellent report on a situation we've been following, the Hawaii governor's proclamation of a housing emergency. In "To Tackle Highest Housing Costs in the Country, Hawaii's Governor Declares YIMBY Martial Law," Christian Britschgi at Reason writes:

Developers with a [Beyond Barriers] working group [what we cheekily referred to as the "Privy Council"]–certified project wouldn't have to comply with normal zoning restrictions. They wouldn't have to go through Hawaii's cumbersome environmental review process (which can add months or years to a project's approval). They could avoid historic preservation regulations, and get relief from normal impact fees and taxes. They could also skip the need to get approval from the state's Land Use Commission—a duplicative zoning body.

The story is an excellent summary of the substance of the emergency proclamation, the support and objections it has received, and some prognostication (including ours):

Thomas says that Hawaii courts have generally been unwilling to second-guess the governor's use of emergency powers. Numerous lawsuits challenging emergency proclamations during the pandemic all failed. "COVID taught us that [the state's emergency statute] is extremely robust," he tells Reason. "It is essentially a political question is how the Hawaii Supreme Court has treated it."

At the same time, Thomas does suggest that a court might look differently on the use of emergency powers to address something like Hawaii's housing shortage. "Maybe it's an emergency but it's one that's been festering for 50 years. It's been on the longest fuse one can imagine," he says.

A legal colleague of ours has a less sanguine view (or maybe we should say "a rather blunt assessment"):

Lawsuits challenging the order are almost inevitable, said one Maui land use attorney to Civil Beat. "There's no disagreement that we need more affordable housing. But using the state constitution as toilet paper isn't the right approach," he told the publication.

Strong letter to follow.

The Governor issued this emergency proclamation before the big wildfire on Maui. The Governor subsequently announced that for the next 60 days, the housing emergency proclamation efforts will be directed at Maui disaster recovery.

The big picture question we have is whether the Governor's declare-an-emergency-and- bypass-the-laws approach to Hawaii's housing shortage will spread to other jurisdictions. Co-19 taught a whole lot of government officials that emergency orders are the shortcut to getting what they want done.

Stay tuned.

"Zoning is the most important local law you've never heard of" - Hawaii Zoning Atlas Published

Where you can build 1-4 family residences by right

The Hawaii Zoning Atlas project has announced publication of the Hawaii Zoning Atlas, an "interactive map [that] explores how restrictive zoning laws can make it difficult to build diverse, affordable housing."

The official announcement notes:

The map is based on an original dataset compiled by over 30 students [including some of our U.H. Law students!] and volunteers who combed nearly a thousand pages of regulations to extract key policy details, including whether housing units are legally allowed in an area and how many; restrictions on height, yards, and lot coverage; and parking requirements. All in all, more than 100 data points were collected for each zone in three counties–Honolulu, Maui, and Hawaiʻi. Kauaʻi will be available in a future release.

This is designed for people who are not land use insiders, to help understand how land use regulations restrict the availability of places to live. Click a link, check the boxes on the left for how you want to filter the data, and voila!, you see what is permitted, and where. It is a graphic visualization of one of major problems with Hawaii's byzantine system of land use regulations and restrictions. The image above is where 1-4 family residences may be built without seeking discretionary approvals --  a very limited area.

And that is what the Zoning Atlas is designed to illustrate. The media advisory includes this quote from an obscure law blogger:

Robert H. Thomas (Joseph T. Waldo Visiting Chair in Property Rights, William and Mary Law School, and Director of Property Rights Litigation, Pacific Legal Foundation)

"The Hawai‘i Zoning Atlas has made us aware that exclusionary zoning is one of the primary culprits in the affordable housing crisis—causing hardship for individuals, families, and employers across the state."

The project director, Trey Gordner, joined our U. Hawaii Law School Land Use class earlier this year, where he previewed for our students the project as well as the dynamics of zoning and land use regulations (from a non-lawyer's perspective).

This is part of a national project (the National Zoning Atlas), which describes itself as "a collaborative of researchers digitizing, demystifying, & democratizing ~30,000 U.S. zoning codes. It is housed at the Cornell University Legal Constructs Lab, led by Professor Sara Bronin, and has team members working on regional and statewide atlases around the country." In short, the atlases catalog and help us understand local land use on a big scale.

Trey said this:

"Zoning is the most important law you’ve never heard of,” said Trey Gordner, director of the Hawaiʻi Zoning Atlas, “By regulating what buildings can be built where, what they look like, and what they can be used for, zoning determines the shape of our communities, the size of our houses, the length of our commutes, and more. The Hawaiʻi Zoning Atlas brings these rules to light to help our community determine whether they are delivering the future we want."

Check it out and play around with the various layers. It will open your eyes. 

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

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

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

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

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

Frank graciously consented to us reprinting his remarks here.

******

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

Professor Schnidman introducing Michael Berger

American Bar Association, State and Local Government Law Section

Jefferson B. Fordham Awards Luncheon, August 4, 2023

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

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

Good afternoon.

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

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

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

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

Michael stated those many years ago that:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Live The Dream! Teach Dirt Law In Hawaii: UH Law School Looking For Property & Land Use Lawprof

(Tip for applicants: understanding the symbology of the
Law School's logo will show you know the score.)

Here's your chance to teach Property and Land Use in what might be most interesting venue on Planet Earth for those subjects: the University of Hawaii School of Law has put out a call for applications for a tenured lawprof (along with six other openings in other subjects):

The University of Hawaiʻi at Mānoa, William S. Richardson School of Law seeks to fill up to seven tenured or tenure - track positions . For doctrinal faculty, we are seeking to fill positions in Constitutional Law (tenured or tenure - track) and Property /Land Use (tenured). We welcome candidates who, in addition to one of those two fields, have expertise in Administrative Law, Business and Commercial Law, Environmental Law, Family Law, Health Law, Intellectual Property, Labor and Employment Law, Native Hawaiian Law, and Pacific - Asian Legal Studies.

Here's the full description of all the openings with general information and a way to find out more.

Here's what a typical day at the office looks like.

We can report with first-hand knowledge that teaching these subjects at this law school is very good (we taught the Land Use course this past spring semester -  and we earned our JD here too many years ago to mention.

So if you are even thinking about it, now's the time: fire up that CV and "chance um" (as we say in the 808).

(Tip #2 for applicants: learning why this sign is important might be important.)

Hawai‘i Law Position Description - General (Aug. 2, 2023)

What If The Hawaii Governor's Cutting Of The Gordian Land Use/Environmental Knot Actually Works?

The two-plus years under the declared Co-19 emergency surely have given Hawaii's executive-branch officials a clear vision of how much easier they could get their agendas accomplished without all that pesky democracy.

Hawaii's Sweeping Emergency Management Act: Governor is the "Sole Judge"

Hawaii's Emergency Management Act gives state and county executives broad and nearly unreviewable authority to suspend a wide spectrum of the usual laws, regulations, and rules. As we wrote in Hoist The Yellow Flag and Spam® Up: The Separation of Powers Limitation on Hawaii's Emergency Authority, 43 U. Hawaii L. Rev. 71 (2020), Hawaii's Act confers among the nation's most muscular and sweeping powers. For example, the governor is the "sole judge of the existence of the danger, threat, or circumstances giving rise to a declaration of a state of emergency." The Act's one limitation -- the 60-day time limit on how long an emergency may be declared and acted upon without legislative action -- is, in reality, a paper tiger, as the courts have refused to meaningfully enforce it.

Build Baby Build: Governor Green's Emergency Housing Proclamation Sidelines Decades of Land Use and Environmental Regulations and Restrictions

And it appears that executive officials really dig these powers. As you may already know, in July -- just a couple of months after the Co-19 emergency was officially declared pau -- the Governor of Hawaii discovered a new emergency, and issued a Proclamation that the longstanding "shortfall of affordable housing" is an "emergency or disaster" as defined by the Act.

If it is an emergency, it surely has been on a very long fuse, and is primarily a self-inflicted crisis. As is widely reported (see, e.g., Jason Sorens, Zoned Out: How Housing Regulation Drives Young Americans Towards Socialism (Am Inst. for Econ. Rsh. July 24, 2023)), Hawaii is the most highly-restricted and regulated residential land in the nation (see Fig. 3):

We're Number One! We're Number One!

The costs of the current regulatory and environmental system in time, expense, and effort, is cited as a leading contributor to the fact that Hawaii is one of the most expensive housing markets in the country. As the Proclamation notes:

WHEREAS, this [housing] shortfall has never been adequately addressed, contributing to a 1,200% increase in home prices over the last 45 years, which is double the 600% growth in income over the same period[.]

Not at all good.

Pointing to these infamous "regulatory barriers" to building housing (and just about anything else), the Governor deployed his office's broad powers under the Act to suspend a slew of significant land use and environmental regulations, including the State environmental impact statement and reporting requirements, historic preservation restrictions, certain county home rule and zoning laws, civil service laws, collective bargaining with public worker unions, the "open meetings" requirements, the procurement code, the rezoning powers of the State Land Use Commission for certain parcels, school impact fees, and even the Emergency Management Act's own rulemaking requirements. The Proclamation establishes a Privy Council (the "Building Beyond Barriers Working Group" -- how appropriate, given Hawaii's royal history -- or perhaps you prefer "rule-by-junta") that can, according to this report, "block projects deemed to go too far outside the guardrails that would have been in place but for the proclamation." That's comforting. 

Acting under his dictatorial emergency powers (and we are not exaggerating when we say that the powers conferred by Hawaii's Act are truly "dictatorial" as we noted in this law review article), the Governor asserts this will "streamline processes for housing development, while ensuring respect for our iwi kūpuna and environment." To emphasize the so-let-it-be-written-so-let-it-be-done nature of this enterprise, the Proclamation even comes accompanied by its own set of Rules for how it is to be implemented (you know, just like a real law). 

What Others Are Saying

For a nuanced view -- by an analyst with no dog in the Hawaii hunt -- see zoning expert and author M. Nolan Gray, who writes at Bloomberg's City Lab that this "could provide a model for chief executives in housing-strapped states across the country." See M. Nolan Gray, Can Hawaii Solve Its Housing Emergency? (Bloomberg City Lab, July 31, 2023).

Other commentators are less sanguine. Andrew Walden writes that "Housing Emergency Designed to Fail" (Hawaii Free Press, July 31, 2023), arguing that these temporary measures can only work if they are permanent ("Because it is temporary, Green’s Proclamation ensures that too few projects will be approved to actually bring down the cost of housing. ... So when the legislature reconvenes you may be 100% certain that Green’s emergency orders will not be enshrined into law.").

Schadenfreude Alert

Now don't get us wrong: the Governor is absolutely right about Hawaii's oppressive system of regulations and restrictions on building housing that ends up restricting supply, and massively driving up costs. So although we are patently against the routine use of extraordinary emergency powers to accomplish things that should be done through the normal channels of democracy, our long experience playing the land use game in the 808 can't help but turn us into a keen observer of this experiment. We also can't help but being a bit bemused by all of this gnashing of teeth by all involved. As noted above this is a self-inflicted wound and the result of longstanding voting patterns; on a very basic level you get what you vote for, and the voters of Hawaii must either want to restrict the supply of housing to keep things exclusive and preserved, or they are deep-down okay with paying a lot for their homes or living in three-generation households.

And now, instead of doing the right thing and making fundamental needed reform and convincing the voters that now is the time to realize that the system as it stands doesn't work, we get the lazy shortcut. 

Thus, although we are no longer in the day-to-day dirt law and land use game in Hawaii, we're going to be watching this closely.

Fear of Success?

Of course, the usual suspects are already voicing the predictable objections that this will result in cowboy land use (our description, not theirs) and environmental degradation, and are already mentioning possible legal challenges. See, e.g., Stewart Yerton, Can An Emergency Proclamation Solve Hawaii's Housing Crisis? 'That's the Million Dollar Question'' (Civil Beat, July 30, 2023).

Other than the Governor's sweeping repudiation of democratic processes, what is spurring the substantive objections to this? You might think that this is just one more example of NIMBYism and "drawbridge protectionism" (or maybe just a naked "I got mine" and the hell with those who don't -- those vibes play extraordinarily well in the 808, in courts and in the public).

But we sense that a more fundamental fear is driving objections. This may well be the closest we'll ever get to a real-time experiment in whether Hawaii's byzantine land use and environmental regulations -- touted for decades as absolutely necessary to "preserve paradise" -- are worth their massive costs. We've been told that the current system is the only thing standing between us and foul air, water evaporating, beaches disappearing, and historical and cultural resources being despoiled.

What if, when this experiment winds down (whenever that is, since by law an emergency can last a maximum of 60 days, even though this time limit is illusory, because the emergency can be renewed indefinitely), there are 50,000 new residential units built out and the the environmental sky has not fallen? If that's the case, what more empirical evidence does the legislature need that the touted Hawaii system of restrictions, regulations, and the precautionary principle simply are unnecessary?

Or does Hawaii just go back to business as usual? 

The Hole Card

So now we shall see. We predict a lawsuit will soon be filed to challenge this, because Hawaii's courts are the objectors' hole card. Look for a claim under the Hawaii Constitution to lead the charge, because the Hawaii Supreme Court is the final arbiter of the state constitution and a ruling from that court would be armored up against revision by the other branches of government. There's a long judicial history in Hawaii of doing just that.

Hawaii's courts will be the preferred forum: lax standing rules (nearly anyone can be a plaintiff), a Supreme Court that historically has been open to such claims (as a study published in the University of Hawaii Law Review in 2011 reported, environmental plaintiffs enjoy an enviable record of success in the Hawaii Supreme Court, which during the years studied (1993-2010) found in favor of such groups "approximately eighty-two percent of the time, sixty-five percent of which reversed the Intermediate Court of Appeals."), and a judicial ruling that would be immune from the Governor's or the Legislature's tampering. That's the play.

With two of the current bench of five Hawaii Supreme Court Justices in the process of being replaced, does this make the game even more interesting, and the moving pieces more in motion? You bet.

So stay tuned and follow along with us.

That sound you hear right now is the late-night typing of someone drafting up a state-court complaint.

Office of the Governor, State of Hawaii, Proclamation Related to Housing (July 17, 2023)

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

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

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

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

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

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

Slip op. at 9.

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

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

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

Slip op. at 10.

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

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

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

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

Cal Ct App: Prohibition On Short-Term Rentals Might Have A Commerce Clause Problem

The voters of South Lake Tahoe, California, adopted an ordinance that forbade the city from issuing short-term rental permits for properties in residential zones unless the owner was a permanent resident of the city, and declared that all short-term rental permits would expire three years later. The trial court granted the city summary judgment on all claims raised by an association of property owners who rented short-term. 

In South Lake Tahoe Property Owners Group v. City of South Lake Tahoe, No. C093603 (June 20, 2023), the California Court of Appeal mostly agreed, holding that the owners' vested rights and state law preemption claims did not survive. But the court disagreed with the trial court's dismissal of a (dormant) Commerce Clause challenge to the residency component. As noted in this recent Fifth Circuit decision, local ordinances that discriminate between residents and non-residents are (or at least could be) too burdensome of the right to interstate travel as a durational residency requirement. Here's the resident exception:

Despite its ban on vacation home rentals in residential zones, Measure T allows permanent residents to let their dwellings up to a total of 30 days per year, subject to obtaining a permit. For purposes of the exception, a permanent resident is a person who lives in his or her home a majority of the year and claims a homeowner’s property tax exemption under article XIII, section 3, subdivision (k) of the California Constitution.

Slip op. at 17.

The court concluded that the "resident owner exception discriminates on its face against interstate commerce" because it "unlawfully requires 'an out-of-state firm 'to become a resident in order to compete on equal terms.'" Slip op. at 26 (citations omitted). By foreclosing non-resident owners from participating in the city's short-term rental market, the ordinance benefits residents "based solely" on an owner's residency status:

Because Measure T’s permanent resident exception facially discriminates against interstate commerce, it is per se invalid unless the City can justify the discrimination by showing that the resident exception ‘ “advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.” ’

Slip op. at 33 (citations omitted).

South Lake Tahoe Property Owners Group v. City of South Lake Tahoe, No. C093603 (Cal. Ct. App. June 20, 202...

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

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

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

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

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

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

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

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

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

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

Here's what bothers us about this case:

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

Slip op. at 35.

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

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

Chump Alert! Developer's Claim That City Can Be Held To Its Contract Limiting Exactions Goes About As Well As You'd Expect

We're not going to dwell all that much on the California Court of Appeal's recent opinion in Discovery Builders, Inc. v. City of Oakland, No. A164315 (June 22, 2023), mostly because it seems entirely predictable.

The developer thought it had an agreement with the city to pay certain fees (dare we say "exactions") the city required in order to approve and provide what the court calls "project oversight." The contract "provided that the fees set forth in the agreement satisfied 'all of the Developer's obligations for fees due to the City for the Project.'" Slip op. at 1. You know where this is headed, don't you?

That's right, eleven years later while the project was still underway, the city adopted new ordinances imposing new impact fees. When the developer sought additional building permits ... no permit without paying the additional exactions. The trial court thought the contract took care of that issue, and ordered that the city could not impose any new fees beyond what it had agreed to impose.

The court of appeal made short work of that, and held (as you probably predicted) that the city's agreement was pretty worthless because the new fees were a valid exercise of police power, and "the government may not contract away its right to exercise the police power in the future." Slip op. at 12. Against public policy, etc etc. You know the vibe.

"We trusted you," and "we had a deal," don't go very far when it comes down it it, and anyone who thinks they can actually hold the government to what it agrees to has a reckoning coming if the government chooses not to honor its agreement.  As Chief Justice Roberts noted in a different context: what chumps!

We're not suggesting that the developer here was in fact a chump. We feel for you -- you should be able to trust the government. But alas, no, the courts are just fine with treating those who rely on the government's promises like suckers for believing it.

Anyway, this one can't be too much of a surprise.

Discovery Builders, Inc. v. City of Oakland, No. A164315 (Cal. Ct. App. June 22, 2023)

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

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

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

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

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

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

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

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

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

Finally, the court rejected the takings claim:

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

Slip op. at 21.

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

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

CA5 Makes Short Work Argument That Asserting A Rational Basis For A Short-Term Rental Ban Is Enough To Secure Pleadings Dismissal Of Arbitrary And Capricious Challenge

In this very short (but apparently published) opinion, the U.S. Court of Appeals held that it was not right to dismiss a claim on the pleadings and that factual development is warranted, even where the complaint alleges that a municipal land use ordinance is arbitrary and capricious, and the city claims it has a rational basis for the ordinance.

And when we say "short," we mean it. Here's the entirety of the opinion:

Plaintiffs here appeal the Rule 12(b)(6) dismissal of their complaint alleging that the City of New Braunfels’s zoning regulation banning short-term rentals of residential properties in certain areas of the city is unconstitutional. The district court ordered dismissal by approving a few conclusory paragraphs in the magistrate judge's recommendation. This court’s relevant case law, however, indicates that some factual development may often occur in these cases, and that summary judgment may often follow. See, e.g., Mahone v. Addicks Util. Dist., 836 F.2d 921, 935–37 (5th Cir. 1988). We make no prediction on the future course of this case, but based on the complaint’s well-pled allegations, plaintiffs are entitled to engage in discovery in an attempt to surmount the currently high bar for challenging local zoning ordinances under the Constitution.

VACATED and REMANDED.

One judge dissented, but didn't file an opinion.

[Before we go on, this disclosure: our law firm filed this amici brief in support of the property owners.]

This is a substantive due process challenge (yes, you read that right) to the city's ban on short-term rentals in residential areas. The district court, adopted the recommendation of the magistrate who as noted above, dismissed because "the Court need not use its imagination to conceive of the way zoning ordinances preserve the nature of a city center or understand a community member's concerns; these are scenarios that already exist." Recommendation at 14. Yes, it is arbitrary to draw a line between short and longer term rentals, but "[t]his complaint is irrelevant under rational basis review because municipalities must draw the line somewhere." Id. at 15. 

The Fifth Circuit made short work of that, concluded that some facts may be relevant to the question, and that the plaintiffs are entitled to have their day in court. Or at least engage in some discovery, Texas style.

If only more courts would do this at the pleadings stage. Instead, in land use and constitutional property cases, courts often act as gatekeepers by dismissing cases under Rule 12(b) if they deem pleadings not to have a likelihood of success on the merits, or by applying an overly-deferential standard of review, effectively shielding these type of cases from juries or other finders-of-fact.

Marfil v. City of New Braunfels, No. 22-50908 (5th Cir. June 16, 2023)

Texas Supreme Court: We Want To Resolve Whether Short-Term Renting Property A Natural Right, Just Not In This Case

In this order, the Texas Supreme Court declined to review a case we've been following, in which the court of appeals held that Grapevine's total ban on short-term renting of property -- banning even owners who had been doing so for a while -- might be a taking. The court held that even though the owners did not possess a classic vested right to continue using their properties to rent on a short-term basis, they owned their properties and that was enough. Property ownership comes with the "fundamental" right to rent it out and there's no need to show more, such as a vested right under state law. More details on the city's ban and the court's reasoning here.

The city sought discretionary review and somewhat unusually, the property owners agreed that this is an important issue worthy of the Supreme Court's review.

But even with everyone agreeing on that point, the Supreme Court passed. The court didn't offer any reasons for the denial 

Justices Young and Blacklock concurred separately to explain their reasoning. Agreeing that the "questions presented in this petition is of increasing and demonstrable importance[,]" and "this Court needs to weigh in on the heady constitutional issues at stake[,]" and that they both "tend to agree" with the parties and amici that the issue is teed up, they "nevertheless concur in the denial of the petition for review."

Why? Vehicle problems. Some of the usual administrative thicket to navigate. Maybe a future case will be simpler (in this case, the owners are challenging a single city ordinance, but in order to resolve the case, Justice Young noted that the court would be required to interpret a separate ordinance as well). And, somewhat oddly, the concurring opinion seems to invite the city to "adopt new regulatory measures if it deems necessary to do so." 

So let's wait, which might let "other lower courts ... opine on the issue."

Part of the chief appeal of the parties’ joint request that we take this case is that the issue is prevalent and important. I believe them. If that premise is right, then plenty of cases will come. If they do not, then today’s perceived importance and urgency will have turned out to be illusory. Either way, our State will be better served by a measure of patience from this Court, as frustrating as it may be to us and, even more, to the parties to this case. I accordingly concur in the denial of the petition for review.

Concurring op. at 5.

And hint for you advocates: don't forget to include analysis under the Texas Constitution (a thought Justice Young has expressed before).

So stay tuned. This one isn't likely over.

City of Grapevine v. Muns, No. 22-0044 (Tex. Jun 16, 2023) (Young, J., and Blacklock, J., concurring in the...

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

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

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

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

Here are the Questions Presented:

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

The questions presented are:

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

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

Stay tuned.

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

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

Here's what we're reading this Tuesday:

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

Worth checking out.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The questions presented are:

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

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

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

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

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

Upcoming Event: "The History [That Doesn't Suck] of Eminent Domain" (Wed, June 7, 5pm ET - Free!)

Mark your calendars to join us on Wednesday, June 7, 2023 at 5pm Eastern Time, as the Eminent & Right of Way Club welcomes Professor Greg Jackson, host of the History That Doesn't Suck Podcast.

We're going to have a discussion about the history of eminent domain, what zoning looked like in the 19th Century, and if the Founders planned for the infrastructure we have today.

RSVP for this Lounge Event on the App (register for the (free) Clubhouse App here).

What's this "Clubhouse" thing, you ask? More here on that. Come, join us!

New Cert Petition: The Supreme Court Should Resolve The Legislatively-vs-Administratively Imposed Exactions Issue

When we last visited Sheetz v. El Dorado County, we finished with "stay tuned" because we suspected that the California Court of Appeal's opinion concluding that the County's traffic mitigation fee is immune from Nollan/Dolan nexus-and-rough-proportionality review because the legislature imposed the fee on everyone (and Sheetz was not subject to paying it because of an ad hoc agency decision) was not going to be the last word, either in the case or on the legislative exactions issue.

Well, now the predicted other shoe drop: the property owner has filed this cert petition, with this Question Presented:

George Sheetz applied to the County of El Dorado, California, for a permit to build a modest manufactured house on his property. Pursuant to legislation enacted by the County, and as the condition of obtaining the permit, Mr. Sheetz was required to pay a monetary exaction of $23,420 to help finance unrelated road improvements. The County demanded payment in spite of the fact that it made no individualized determination that the exaction—a substantial sum for Mr. Sheetz—bore an “essential nexus” and “rough proportionality” to the purported impacts associated with his modest project as required in Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 837 (1987) and Dolan v. City of Tigard, 512 U.S. 374, 391 (1994).

Mr. Sheetz challenged the exaction as an unconstitutional condition under Nollan and Dolan. A California trial court upheld the exaction, holding that, because it was authorized by legislation, the exaction was immune from Nollan/Dolan review. In a published decision, the California Court of Appeal affirmed, and the California Supreme Court denied review. California’s judicially-created exemption from Nollan/Dolan scrutiny for legislative exactions conflicts with the decisions of other federal and state courts across the country, and is in strong tension with this Court’s more recent precedents.

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

The Sixth Circuit just last week held that these type of demands are subject to the nexus and rough-proportionality standards, and not rational basis review, deepening the lower court conflict.

So we shall say again: we don't think the California court's Sheetz opinion is the last word, so stay tuned.

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

Petition for Writ of Certiorari, Sheets v. County of El Dorado, No. 22-1074...

 

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

Shands Key, with the City of Marathon in the background

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

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

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

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

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

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

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

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

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

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

Ninth Circuit Invalidates Berkeley's Too-Clever-By-Half Ban On New Natural Gas Piping

Proving there's more than one way to protect property rights and, you know, our basic freedom to (1) diversify our energy uses so when the power goes out as it frequently does in California, we don't lose the use of every single appliance and modern convenience, and (2) heat up our dinner the way humans have been doing it for a long time, in California Restaurant Ass'n v. City of Berkeley, No. 21-16276 (Apr. 17, 2023), the U.S. Court of Appeals for the Ninth Circuit invalidated Berkeley, California's too-cute-by-half attempt to ban new gas appliances.

Gas stoves are the latest villain from The Land of No (aka The Golden State), but instead of trying to ban gas stoves directly (after all, a crafty home chef might just go to Emeryville or Albany and obtain one of these kitchen cabinet Death Stars, at least until those cities also get on the Berkeley bandwagon), Berkeley got clever: it adopted an ordinance that banned gas piping in new construction under the Building Code. Buy and install all the gas stoves you like, homebuilder; there'll just be nothing to hook it up to. A gas stove without gas piping is like an assault rifle without bullets.

And after all, what can be more local than a building code? The ordinance also expressly disclaimed that it was prohibiting, you know, gas stoves or anything, or mandating electric. No, it was merely eliminating "obsolete natural gas infrastructure and associated greenhouse gas emissions," which will help save the planet.

The Restaurant Association sued, asserting the ordinance was preempted both by California and federal law -- in the latter case, the Energy Policy and Conservation Act, 42 U.S.C. § 6297(c).

Now we're a takings and property blog, so we are not going to go into the preemption details, which frighten and confuse us. You can read the opinion yourself if you are a preemption nerd. The bottom line, in our reading of the opinion, is that the EPCA prohibits any state or local laws that concern energy efficiency, or use. The court concluded that Berkeley's ordinance involved "energy use." As the opinion notes:

Berkeley’s main contention is that its Ordinance doesn’t regulate “energy use” because it bans natural gas rather than prescribes an affirmative “quantity of energy.” While Berkeley concedes that a prohibition on natural gas infrastructure reduces the energy consumed by natural gas appliances in new buildings to “zero,” it argues that “zero” is not a “quantity” and so the Ordinance is not an “energy use” regulation. But that defies the ordinary meaning of “quantity.”

Slip op. at 13.

There's more, both in the opinions (46 pages to cover the majority and the two separate concurring opinions), and in the media, where it has generated a lot of coverage and analysis, including these:

• Federal court strikes down a California city's natural gas ban (Emma Newburger, CNBC)
• Does the 9th Circuit’s rejection of Berkeley, CA’s municipal gas ban spell doom for Massachusetts’ own gas-banning “Demonstration Program”? (Paula M. Devereaux, Pierce Atwood's Massachusetts Dirt and Development Law blog)

Given the tenor of the times, we seriously doubt that this is the last word on this topic, either in this case or overall. Berkeley ain't a quitter after all, and it sure knows how to double-down on those municipal policies that have resulted in its two main nicknames, "Berzerkely," and "The People's Republic of Berkeley." Maybe calling out the National Guard to take those gas stoves quartered in your homes? (Don't give them ideas!)

Now if only we could reduce the greenhouse gas emissions from politicians, we'd be going a long way to saving the planet. One can dream, can't one?

California Restaurant Ass'n v. City of Berkeley, No. 21-16278 (9th Cir. Apr. 17, 2023)

CA9 (unpub.): You Can Never Adequately Plead A Facial Penn Central Taking For City Zoning Restrictions

If everything the Ninth Circuit says in its unpublished memorandum opinion in Craneveyor Corp. v. City of Rancho Cucamonga, No. 22-55435 (Apr. 20, 2023) is accurate, there's no way to ever draft a complaint alleging a facial Penn Central regulatory taking that will survive a 12(b)(6) motion to dismiss for failure to state a claim.

From what we can gather (this is an unpublished memorandum opinion, after all), the property owner asserted a facial takings challenge to some sort of zoning regulations that restrict its use of two parcels it owns. We're not sure what restrictions. See slip op. at 2 ("The complaint asserts a facial takings challenge under 42 U.S.C. § 1983 to a city zoning plan that allegedly restricts development on two parcels of land owned by CraneVeyor.").

Two theories: Lucas and Penn Central.

The court made short work on the facial Lucas claim, concluding that because the owner "acknowledges that the [zoning], on its face, does not prohibit all development in fault zones[, that] ... CraneVeyor has not stated a claim for a facial Lucas taking." Slip op. at 3.

The facial Penn Central claim fared no better. The court assumed without deciding that a property owner may assert a facial Penn Central claim, and proceeded to analyze the three Penn Central factors:

• Economic impact. "[I]nsufficient." Slip op. at 3. Why? Because "[v]aluable uses remain on CraneVeyor's land. According to the city, CraneVeyor could build up to two residential units on its first parcel. And the [zoning] ppermits livestock and poultry keeping on the second parcel." First, what does the (alleged) existence of "valuable uses" vel non remaining on the property have to do with whether the complaint is properly pleaded? This isn't a Lucas theory, which requires some kind of near-wipeout of economically beneficial uses; this this is Penn Central where there's no minimum threshold of economic loss, and even having a lot of "valuable uses" remaining in the after condition might be overcome by significant proof of the other two factors. Second, this was an appeal from a 12(b)(6) dismissal, yet (a) the court takes the city's word that there are other valuable uses remaining, and (b) the court apparently makes some kind of conclusion that the complaint didn't adequately allege the remaining uses are insufficient. So, Ninth Circuit, what percentage is sufficient that we have to plead? Your guess is as good as ours.
• Distinct investment-backed expectations. Nope. No landowner can reasonably expect to be free of zoning. And the owner didn't chase vesting, so there's that.
• Character. This is a regulatory taking, not a physical invasion. And zoning laws ain't facially takings.

Can all this be explained by the fact that the court was dealing with a facial Penn Central claim? Your guess is as good as ours. But if that's the case, wouldn't it just be easier to simply say there's no way to plead a facial claim for an "ad hoc" test, rather than potentially screw up the doctrine when down the road, someone inevitably tries to apply the court's analysis to a complaint asserting an as-applied Penn Central claim?

Craneveyor Corp. v. City of Rancho Cucamonga, No. 22-55435 (9th Cir. Apr. 20, 2023) (mem.)

New Article: Alex Boone, "The Tide's Coming In: A New Case for Beachfront Property Rights in South Carolina" (Wm & Mary Envt' L & Pol'y Rev)

Check this out, a new student-authored note from William and Mary third-year law student Alex Boone, "The Tide's Coming In: A New Case for Beachfront Property Rights in South Carolina," 47 Wm. & Mary Envtl. L. & Pol'y Rev. 383 (2023).

Here's the Abstract:

Part I of this Note explores the scientific data as it relates to the impending consequences of climate change on South Carolina’s coast and will introduce the disastrous scenarios that are predicted to arise as a result of rising sea levels and the accelerating strength and severity of extreme weather events. Part II compares the effectiveness of various coastal resiliency tools and highlights the regulatory framework that prohibits their use by beachfront property owners. Part III explores the topic of regulatory takings and their indirect prophylactic nature of protecting citizens from regulatory overreach and offers a case for a South Carolina court to find that the state’s regulations create an unconstitutional taking of private property without just compensation. Lastly, Part IV recommends a policy change designed to mitigate the consequences of the CTWA [Coastal Tidelands and Wetlands Act] on South Carolinians in the absence of a judicial finding that the CTWA constitutes a regulatory taking.

It's really rewarding to see this kind of writing and analysis from a law student. Yes, we appreciate the subject-matter and the conclusion (naturally), but that aside, it is a good day when a soon-to-be colleague does this kind of work and lays it all out there for the world to see. Congratulations to the ELPR editors, and especially to Mr. Boone!

April 27, 2023, 5-7pm, Honolulu: Join Us To Celebrate The Work And Career Of Professor David Callies

Come join us on Thursday, April 27, 2023, from 5-7pm, downtown Honolulu, to celebrate the retirement of Professor David L. Callies from the University of Hawaii Law School.

Join U.H. Law School Dean Camille Nelson, Professor Callies' colleagues, his students (present and former), the Hawaii legal community, and family and friends as we honor 43 years of scholarship, teaching, service, and practice.

Professor Callies is a prolific scholar and author, and has mentored generations of lawyers. Known especially for his work in property, land use, takings, administrative law, and state and local government law, he has also been presented with numerous awards including William and Mary's Brigham-Kanner Property Rights Prize, and the Owner's Counsel of America's Crystal Eagle. 

Invitation and how to RSVP (or click below). Space is limited, so please let us know you are attending as soon as you can.

Details:

Thursday, April 27, 2023
5:00-7:00 p.m.

Second Floor Gallery
Pauahi Tower
1003 Bishop Street
Honolulu, Hawaii 96813

Validated parking: Bishop Square garage (entrance on Alakea Street)

RSVP: [email protected]

See you there!

Professor David Callies - Retirement Celebration Invitation Apr. 27, 2023

Instead Of Being The First Case To Take Advantage Of Knick, This One Was The Last Victim Of Williamson County

There's a lot going on in the U.S. Court of Appeals for the Fifth Circuit's opinion in Tejas Motel, L.L.C. v. City of Mesquite, No. 22-10321 (Mar. 22, 2023), but that's mostly because it's a procedural decision resolving a question of whether a Texas court's federal takings judgment was res judicata, and therefore prohibited a federal takings complaint filed later in federal court .

As you might surmise from the above summary, the Fifth Circuit indeed concluded that the second (federal) takings lawsuit was precluded by the judgment in the first (Texas), because the Texas court issued a final judgment on the merits of Tejas Motel's federal takings claim.

Short story: the city doesn't really care for operations like the Tejas Motel. Back in 1997, the city amended its zoning code to effectively outlaw these types of motels, rendering Tejas a nonconforming use. Later, after "local residents allegedly complained about the poor conditions and criminal activity" at such places, the city cracked down ever harder, and told Tejas to shape up or ship out: the motel could either fix the problems that were affecting its neighbors, or it would be shut down, nonconforming use or not. Slip op. at 3.

"Facing pressure from the City and the Board, Tejas agreed to cease operations or bring the motel into conformity with the zoning ordinance by May 1, 2019." Id. But "[t]hree months later," Tejas claimed it executed the agreement under duress and sued the city in state court. By our calculations, the state court lawsuit -- which made claims under both Texas and federal law (including takings) -- was filed in either August or September 2019.

The Fifth Circuit noted that Tejas Motel "was forced into state court by Williamson County," and that case's now-overruled-by-Knick state litigation ripeness requirement. Slip op. at 18. But wait, you note. Wasn't Knick v. Township of Scott decided on June 21, 2019, one to two months before Tejas filed in state court in August or September 2019? How was it "forced" to bring its federal takings claims in state court?

We're not sure at all. Maybe we're not understanding the timeline properly. Or maybe one of the dates on which we're relying is a typo. But in our view, this doesn't quite line up as Tejas being required by Williamson County to file its federal takings claim in state court, when, by our read, when it filed its state court federal takings claim the Supreme Court had already decided Knick.

Yes, it was a freshly-minted decision, but these days word travels fast (those of you of a certain vintage will remember back in the day when it took one week or more for those of us outside of the Beltway to get our hands on the actual text of Supreme Court opinions, when our copy of U.S. Law Week would arrive in the mail). So we can't quite figure out why, if the Fifth Circuit's opinion's timeline is accurate, that the court notes the property owners were forced to file in state court.

Well, in any event that's what Tejas did. Maybe it was a strategic choice to file in state court, and not, as the Fifth Circuit noted, a matter of being forced to do so by Williamson County. And filing in state court had consequences, as the Fifth Circuit noted. As we wrote at the top of this post, the opinion is somewhat challenging to follow, because you've got to keep track of the two parallel actions, and the status of each in its respective court.

In the end, the Fifth Circuit held that Tejas Motel had asserted federal takings claims in state court, that the state court had determined the merits of that claim even though the state court dismissed the complaint for lack of a "constitutionally protected interest in continuing to use the property in violation of the City's zoning ordinances when it acquired the property knowing it was in violation of those ordinances," slip op. at 6, and had entered a judgment that is now final:

One can sympathize with Tejas’s procedural plight. It was forced into state court by Williamson County, and now cannot avoid the consequences of the adverse judgment it received. But nothing in Knick nullifies long-settled principles of res judicata. State courts are competent to adjudicate federal claims, and their judgments are entitled to full faith and credit in federal court. See 28 U.S.C. § 1738. Because the Texas Court of Appeals issued a final judgment on the merits of Tejas’s constitutional claim, the motel does not get a second bite at the apple.

The judgment of dismissal is AFFIRMED.

Slip op. at 18. 

Tejas Motel, L.L.C. v. City of Mesquite, No. 22-10321 (5th Cir. Mar. 22, 2023)

CA4: Exactions Takings Claim Accrues When Owner Knows Of The Demand, Not When It Paid

As most of you probably already know, there's a demon lurking out there in takings claims. Not of the Levon Helm-narrated The Right Stuff variety, but maybe just as deadly in litigation.

That's right, the too-early-or-too-late thing (or in some cases, the too-early-and-too-late argument). Getting caught between arguments that a takings claim isn't ripe, and arguments that it is too late (statutes of limitation).

The U.S. Court of Appeals for the Fourth Circuit was dealing with the latter (a statute of limitations) in Epcon Homestead, LLC v. Town of Chapel Hill, No. 21-1713 (Mar. 20, 2023), but there are lessons in the case for the other side of the issue, ripeness.

The facts are pretty straightforward. If you are going to build at least five single-family units, the town's zoning ordinance contains a requirement of "inclusionary zoning" (aka affordable housing; aka below-market units. Or if you don't want to build such housing, you can pony up some cash if the town agrees.

The owner of the property wanted to build 63 units so was subject to this requirement. It didn't want to build affordable units, so opted to pay cash (approximately $800k). The town agreed, and conditioned its issuance of a special use permit which would allow the project to proceed on the developer paying this in-lieu fee: no certificates of occupancy would issue until the fee was paid.

Then Epcon bought the property. It built the 63 homes, and sold them. It made the first installment payment for the in-lieu fee, and two years later paid the final payment. Voila, certificates of occupancy. 

Next stop, state court where Epcon asserted the in-lieu fee was illegal under a variety of theories, including a section 1983 claim that the fee was an unconstitutional taking and violated Epcon's due process rights. The town removed the case to federal court and moved to dismiss the federal claims because the lawsuit was filed more than three years after the in-lieu condition was imposed (it had been four years).

As we all know, section 1983 does not have a built-in SOL, so the courts have held that the SOL of the closest state-law analogy applies. In North Carolina, that's three years. The District Court agreed with the town and dismissed. You snoozed, so you lose Epcon.

The Fourth Circuit agreed. We suggest you go read pages 9-11 of the opinion for the reasons why. The bottom line is that "there is no 'distinctive rule' in the Takings Clause context to apply for determining when the limitations period for a § 1983 claim begins to run[,]" and the usual ("standard") rule applies: a 1983 claim is ready when the plaintiffs knows or has reason to know that it is injured. Slip op. at 9. But when did the injury here occur?

Epcon argued it wasn't really injured until it finished paying. Not so, held the Fourth Circuit, it was injured when it learned of the special use permit condition after it purchased the property.

Here, Epcon alleges that it suffered an injury under § 1983 stemming from the application of an unlawful special use permit condition. As the district court concluded, Epcon first had reason to know of this injury no later than 2015, when it began purchasing the land subject to the special use permit. Thus, its claim that the permit condition violated its rights to just compensation and due process accrued at that point and extinguished three years later. By the time Epcon filed suit in October 2019, the sun had set on its federal claims.

Slip op. at 9 (footnote omitted).

The court rejected Epcon's argument that the injury occurred when it was compelled to actually pay the fees, and that happened when it went to the town for the certificates of occupancy. And this isn't a regulatory takings claim, Epson asserted. If it were, the SOL clock might have started earlier. No, this is an unconstitutional conditions claim, and that's different. Slip op. at 10. We didn't lose our property right until we paid, it argued.

We disagree, the court held. "The distinction Epcon attempts to draw between exactions and regulatory takings proves little more than that the government need not physically appropriate property to enact a taking." Slip op. at 10. [Barista's note: "enact" a taking?]

And here's your money quote: "Once the government conditions the grant of a land-use permit on the surrender of a landowner’s right to just compensation, a Takings Clause claim becomes cognizable." Slip op. at 10. In other words, once that happens, the lawsuit window is open and the SOL clock is ticking. In other words, the claim is ripe.

Remember that one the next time the government argues an exaction case isn't ripe because the action being challenged as unconstitutional (the government's demand, and the subsequent owner payment) isn't complete.

Epcon Homestead, LLC v. Town of Chapel Hill, No. 21-1713 (4th Cir. Mar. 20, 2023)

Exactions, Takings, And Ripeness...Oh My! When Planning Officials Say "No," That's Enough (Even If They Might Have Said "Yes" Some Other Way)

There's a lot to digest in the 36-page Order of the U.S. District Court for the Southern District of Florida in case that mostly concerns the validity of an exaction a small property owner was required to pony up in order to tear down and replace an old home on its land.

Megladon bought the residentially-zoned property in 2016 to tear down the existing building and build a new one. Simple enough, right? It demolished the old house, and applied to the Village to build a new one. But the Village also needed a road, and began making noise about a "possible road dedication." And sure enough, eventually the Village notified Megladon that "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." Slip op. at 4. There's a dispute over exactly whose law requires such a dedication -- Village or County? -- but that's not terribly important for our purposes. 

Megladon balked, as dedicating a road would require it to reformulate its plans. There's apparently a procedure by which a property owner can request and exemption or waiver, but "Megladon refused because of the 'legal inconsistency of doing so[.]'" Slip op. at 4. Instead, it sued in a Florida state court. The Village then removed the action to federal court. After removal, Megladon amended its complaint to add an unconstitutional conditions claim.

The inevitable motion to dismiss under 12(b)(1) and 12(b)(6) followed.

Many pages of the court's order (mostly) denying the motion to dismiss are devoted to whether the plaintiff sued the right defendant. Important to the case and the parties, but not really of interest to us. If you might be, check out pages 9-23. 

Page 24 is where the interesting stuff heats up. The court concluded the claims are ripe over the Village's objection that -- you guessed it -- it has not yet reached a "final decision." Slip op. at 24. The court concluded "[t]his argument strains credulity[,]" because the Planning Director send Megladon an email that indeed "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." To the court, this looked like a final decision:

Especially when we view this communication (from the Village’s Planning Director no less) in the light most favorable to the Plaintiff, we don’t think we’re going out on a limb by saying that it sounds a lot like a final decision. Director Olmsted made clear that the Village would issue the permit provided the Plaintiff acceded to the dedication. See ibid. “Provided” in this context means “with the provision or condition (that); it being provided, stipulated, or arranged (that).” Provided, Oxford English Dictionary Online, https://www.oed.com/view/Entry/153449 (last visited Mar. 1, 2023); accord Provided, Merriam-Webster's (defining “provided” as “on condition that, with the understanding, if only”). And, in case there was any doubt, Olmsted clarified that Megladon would “need” to consent (in writing) to the dedication “prior to” the issuance of any permit, and he was pellucid that the permit “will not be issued until dedication of the right-of-way is complete.” SAC ¶ 64 (emphases added). The word “will”—like the word “shall”—indicates the imposition of a mandatory condition. See Hewitt v. Helms, 459 U.S. 460, 471 (1983) (“[T]he Commonwealth has gone beyond simple procedural guidelines. It has used language of an unmistakably mandatory character, requiring that certain procedures ‘shall,’ ‘will,’ or ‘must’ be employed[.]”); Will, Oxford English Dictionary Online (“An utterance of the auxiliary verb ‘will’; (also) a command, promise, or determination expressed by such an utterance.”); Will, Merriam-Webster's (defining “will” as “used to express a command, exhortation, or injunction”); Scalia & Garner 112 (“Mandatory words impose a duty; permission words grant discretion.”).

And Olmsted’s unequivocal use of the phrase “will need” in relation to the dedication requirement puts to bed the Defendants’ bordering-on-frivolity contention that “the response to [the architect’s] email was not a refusal to continue processing the application absent a showing of dedication.”

Slip op. at 25 (footnote omitted).

This all in the context of an exaction or unconstitutional condition claim, where the bad act (according to the court) isn't that the government actually denied the permit asked for, but only that the government imposed the condition. Slip op. at 26.

The order noted that yes, the property owner could have gone further in the administrative process under the Village's procedures. But that's what we call "exhaustion." Id. ("But the Supreme Court has made clear that the unconstitutional-conditions doctrine isn’t subject to an exhaustion requirement." (citing See Pakdel v. City & Cnty. of San Francisco, 141 S. Ct. 2226, 2231 (2021)). And you don't need to exhaust in order to ripen a federal takings claim.

And here's the kicker: the ripeness requirement isn't some hard-and-fast "one application" rule, but rather "[t]o assert a plausible unconstitutional-conditions claim, therefore, a plaintiff need only allege that there’s 'no question . . . about how the ‘regulations at issue [apply] to the particular land in question.''" Slip op. at 27 (citing Suitum v. Tahoe Reg’l Plan. Agency, 520 U.S. 725, 739 (1997); Williamson Cnty. Reg’l Plan. Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 191 (1985)). And the availability of a variance isn't important, because "[i]n Williamson County, after all, the Court was concerned only with whether the plaintiff could seek a variance from the initial decisionmaker." Slip op. at 28.

Thus, the takings claim was not filed too early.

But, you know that -- as the court noted -- "the Plaintiff isn't out of the woods just yet[,]' because the Village also asserted the claim was filed too late. Slip op. at 31. Yeah, this happens a lot in takings-land, where you can be accused with a straight face of being both too early and too late. Check out pages 32-34 for why (it turns on the construction of the sovereign immunity waiver statute, if you are interested). 

Nothing resolved except the plaintiff is allowed to proceed. But as you all know, in takings law sometimes just surviving to continue the fight is a victory.

Order, Megladon, Inc. v. Village of Pinecrest, No. 1:21-cv-22819-ALTMAN (S.D. Fla. Mar. 2, 2023)

Denying Uses (But Allowing Discretionary Ad Hoc Exceptions) Isn't A Recipe For Rational Land Use

If a zoning statute or ordinance sets out the uses permitted in a zone, and the uses not permitted in the zone, and a property owner wants to make a use not permitted in the zone, all she needs to do is apply for a variance, or a Conditional Use Permit, or a nonconforming use permit, or a Special Use Permit, right? After all, isn't the point of these exceptions to bright-line use prohibitions to build in a large degree of flexibility and afford front-line regulators in the right circumstances the discretion to grant a use the legislature prohibited? One size does not fit all, does it? 

That was the issue that closely divided the Hawaii Supreme Court in Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-181 (Mar. 10, 2023). In a 3-2 opinion, the court concluded that when a use is expressly barred by a zoning statute (and yes, here it is a zoning statute because Hawaii has state-controlled zoning) you cannot ask for a Special Permit to make that use. The only way you can make a use expressly prohibited by the statute is to change the parcel's zoning.

The Case and the Issue

Here's the story. The Foundation wanted to set up an "overnight campground for homeless and commercial campers" (slip op. at 3) on land it leased, which was zoned by the State as Agriculture (B-rated soil, if you are interested):

16. Under Ho'omoana's proposal, the Project would consist of 2 acres, while the remaining adjacent 5.9 acres would be reserved as an agricultural field to be used by the campground occupants for therapy and work. It is envisioned that the [homeless] campers may work in the agricultural field to supplement their rental fees. Homeless campers are expected to pay $10 a night, while the commercial campers would be charged more. The camping fees are anticipated to underwrite the expenses of the campground. Although some of the campers may wish to participate in farming activities on the Property, there is no guarantee that the agricultural field would result in future agricultural productivity nor is there a current requirement placed upon the campers to engage in agricultural pursuits.

17. The 2-acre area of the Project would have up to 26 pods for tents accommodating up to 80 people. Tents are to be provided by the campers. It is intended that both the homeless campers and the commercial campers would be camping alongside each other. In addition to the pods, showers, toilet facilities, fire pits or camp stove areas, a paved parking area, and a charging station for campers are proposed. Homeless campers would be allowed to stay for two to three months or more as approved by the campground manager. It is unclear how long commercial campers would be allowed to use the grounds, but any stay would need to be approved by the manager.

Slip op. at 4.

Problem is, the Agricultural district doesn't seem to allow for overnight camping. The statute says that recreational uses like day camping is permitted, but expressly excludes "overnight camps" as allowed uses:

Within the agricultural district ... all lands ... shall be restricted to the following permitted uses: ... Public and private open area types of recreational uses, including day camps ... but not including ... overnight camps[.]

Haw. Rev. Stat. § 205-4.5(a)(6).

But an adjacent statute also allows a request for a Special Use Permit, for "unusual and reasonable uses within agricultural and rural districts other than those for which the district is classified." Haw. Rev. Stat. § 205-6. So what's the deal, can a county Planning Commission or the state Land Use Commission consider a special use permit to allow a use expressly prohibited by the zoning statute?

What Happened

The Foundation thought so, and asked the Maui County Planning Commission for a Special Permit to allow the overnight homeless and commercial campground project as a "unusual and reasonable use." The Foundation also had behind it a Hawaii Supreme Court case, Mahaulepu v. Land Use Comm'n, 71 Haw. 332, 790 P.2d 906 (1990), which held that a use not permitted under section 205-4.5(a)(6) might well be authorized via a special use permit.

But neighbors who object to the project asked the State Land Use Commission for a declaratory ruling that the proposed use of Agricultural land requires a zoning change (known in the parlance of Hawaii's statewide zoning scheme as a "boundary amendment"), and cannot be accomplished ad hoc by a discretionary special use permit.

The LUC agreed with the neighbors, concluding that the overnight camping project could not be approved by way of a special use permit, but that there must be a change in the zoning in order to allow it. By expressly prohibiting "overnight camping," the legislature had, in effect, already made the determination that overnight camping was not an unusual and reasonable use. Thus, no special use permit.

The Foundation appealed to a state trial court under the Administrative Procedures Act. It argued that the special use permit statute doesn't expressly preclude asking for an exception for uses prohibited by the zoning, and moreover, that Mahahulepu case held that doing so is just fine. The trial court bought the Foundation's argument and reversed the Land Use Commission.

Next stop, the Hawaii Intermediate Court of Appeals, which seemed to go both ways on the issues:

The ICA concluded it was bound by Mahaʻulepu, making the LUC’s decision contradicting Mahaʻulepu palpably erroneous. However, the ICA observed that the specific exclusion of overnight camps should control over the general availability of special permits in keeping with canons of statutory construction and furthering the statutory scheme.

Slip op. at 11.

Majority: The Statute Bars Overnight Camping, And That's That

Final stop, discretionary review by the Hawaii Supreme Court. There, a three-Justice majority (Nakayama, Wilson, Eddins) overruled the Mahahulepu case, and concluded that no, you cannot ask for a special use permit if the use you are seeking is expressly prohibited in the zoning statute:

HRS §§ 205-4.5(a)(6) and 205-6 are clear: the “public and private open area types of recreational uses” of “dragstrips, airports, drive-in theaters, golf courses, golf driving ranges, country clubs, and overnight camps” are not permitted on class A and B agricultural land, and cannot be permitted by special use permit.

Slip op. at 19-20 (footnote omitted).

Relying on statutory text, legislative history, and the canon of statutory construction that the specific controls over the general, the majority concluded that the point of chapter 205 is the protection and preservation of agricultural lands, and allowing a use to be made of agricultural land that is expressly prohibited by the zoning statute would not "promote the effectiveness and objectives of this chapter" as the special use permit statute requires. Slip op. at 18.

Having concluded that a special use permit isn't the way one might ask to establish an overnight campground on agricultural land, the majority held that the only way for the Foundation to get its overnight camping project approved would be to seek a "boundary amendment" (aka zoning change) to change the zoning from Agricultural "to one where recreational overnight camps are permitted." Slip op. at 21.

As for Mahahulepu? Overruled. That decision was the product of "flawed" reasoning (that case held that golf courses, another use expressly prohibited by the statute on Agricultural land, could be approved by way of a special use permit), and "failed to engage with the plain language of [the statute] prohibiting certain uses[.]" Slip op. at 22.

Dissent: The Statute Prohibits "Recreational" Uses, Which This Isn't

Two Justices (Chief Justice Recktenwald and Justice McKenna) saw it differently. Stare decisis cautions against lightly overruling cases that are only 30 years old, "[w]hether or not we agree with its reasoning[.]" Dissent at 2. After all, the legislature has had ample time to supersede Mahahulepu, but it hasn't done so.

More interestingly, the dissenters did not view the proposal for an overnight homeless campground as a "recreational use" included in the statute's express prohibition. Dissent at 9-10 ("An overnight campground for unsheltered persons is not a 'recreational' use."). Thus, at least that part of the project might be subject to approval on Agricultural land, because the statute only bars "recreational uses" (and then lists out examples, including overnight camping. The dissenters also were troubled by the Land Use Commission barring the Foundation from intervening in the declaratory ruling process initiated by the neighbors, "some of whom asserted 'not in my backyard' concerns. Dissent at 14-15 (footnote omitted).

Some Thoughts On Bright Lines and Ad Hoccery

Overall, this one isn't terribly surprising, given the Hawaii Supreme Court's wanting to keep a tight rein on land use issues, and its record of reading exceptions to the court's view of the meaning of statutes and ordinances very narrowly. The court, for example, falls squarely in the "narrow" approach to variances.

And we have to agree more with the majority on this one, but for slightly different reasons. We don't really focus on the statutory interpretation as the majority reasoned (after all, it seems you might read the statute both as the majority and as the dissenters did). Instead, we see this one as a push in the correct direction on a larger-scope issue. That being what we see as a trend in land use regulation to paint with a very broad brush in a statute or ordinance, and then rely on administrative or agency officials to exercise discretion to craft ad hoc exceptions. 

To us, this is a bad trend. The problem with "ban use X by law, but allow a discretionary process that might allow use X" is that it shifts the locus of land use regulation from elected officials and legislative judgments to discretionary administrative determinations made by unelected officials (aka bureaucrats). It also seems to favor old-hand insiders who know how to play the system, legally or otherwise. It might not matter whether you can read the law, but it does matter who you know at the Planning Commission or the Land Use Commission.

Bear with us while we play this out. Let's say the legislature has decided to prohibit certain uses in a certain zone and writes the statute or the ordinance that way. Landowners may not like the restrictions because, well, they are restrictions on their use of their land, but at least having a clear line about what is allowed and what isn't fixes a position to which property owners can react and plan. But let's also say that the legislature also includes in the law that in specific cases, an administrative official has the discretion to effectively overrule the legislature's judgment and permit a use that is expressly prohibited. This leaves what should be legislative judgments up to the discretion of nonlegislative officials. 

What's wrong with that, you ask? After all, as noted at the start of this post, one size does not fit all and shouldn't the law itself account for situations in the grey areas that cannot be accounted for when a legislature regulates property? Don't we want to provide landowners with the chance of making a certain use of their property even though a zoning ordinance or statute prohibits it? Flexibility!

It's All Discretionary, Son

In our view, the "everything is discretionary" approach is a recipe for administrative gamesmanship, and runs counter to the idea that to be a valid exercise of police powers, land use regulation should be comprehensive and part of a bigger plan. Maybe more importantly, this type of scheme not only makes arbitrary decisions more likely, it allows government to create "permit purgatories" where property owners are sent to wither on the vine, especially where the legislatively-adopted regulation bars all uses.

In those cases, instead of having to face the takings music for a regulation that prohibits all economic uses, the government gets off the hook if it can point a court to the mere possibility that it might waive, overlook, or vary the restriction. And once a court hears from the government that there is some theoretical possibility that the use prohibited by the statute or ordinance might be allowed if only the property owner asked the right person in the right way (and that person makes a response that can be deemed "final") the judge's interest switch turns to "off" and the court can confidently kick the case for being unripe. We are referring of course to the "final decision" requirement of Williamson County. Because when there is any discretion in the process, courts are loathe to evaluate takings claims on the merits, on the theory that the government might -- just might! -- exercise its discretion and allow what its own statutes or ordinances plainly and expressly prohibit.

Discretion is Often Designed for Permit Purgatory And Takings Avoidance

Perhaps the most glaring example of how this dynamic enables administrative and judicial gamesmanship is California Public Resources Code § 30010, which has been interpreted as providing both the California Coastal Commission and local governments the complete and total discretion to overrule or ignore any restrictive regulation in the coastal zone, if the CCC or a local government can be convinced by the property owner that to apply the statute or ordinance as written would result in a taking. And believe us, the California Coastal Act and local coastal ordinances are full of restrictions that prohibit any and all economically-beneficial uses. But because section 30010 seems to leave open the possibility that these restrictions may be waived ad hoc (if only the property owner asked the right person the right way), courts never get to the merits. "Just ask for an exemption," they counsel landowners, ignoring protestations that these discretionary approvals are more imaginary than a real possibility, and that assembling a request to exercise discretion can be eye-wateringly expensive.

You don't have to be in the land use game all that long to see the evil genius in this, at least the way the courts read this statute: not only does this put the owner into permit purgatory where government is incentivized to avoid taking a concrete position about what its restrictions allow and what they prohibit, this procedure forces a property owner to present her constitutional takings claims to the very government that she claims is violating her rights, upon pain of a 12(b)(1) or 12(b)(6) dismissal if she files a takings lawsuit before the government responds. Yet the Supreme Court says it does not require exhaustion of administrative remedies in takings cases.

What About Euclid?

But these discretionary purgatories take the foundation of the constitutionality of zoning as expressed in Euclid -- the assumption that land use regulations are constitutional because they are the product of big picture thinking and a comprehensive plan -- and inverts it so that every decision is discretionary and case-by-case. The reality is that these "exceptions" are granted rarely, and the process isn't so much designed to get to a "yes" or "no" on what uses might be allowed on a particular parcel, but are often there more as a "takings avoidance" tool like section 30010, where property owners are forced into an open-ended maze and the government does everything it can to strenuously avoid making any decision. That way, the owner remains stuck in the discretionary maze, never to receive an answer, until the owner throws in the towel, after bleeding out financially or spiritually.

This is rational land use planning?

It isn't, but most federal courts have accepted it as the way the land regulation game is played. So kudos Hawaii Supreme Court, for holding the legislature to what it said in the statute, and not allowing unelected members of a county planning commission or the state Land Use Commission decide that in this case, the statute is meaningless.

Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-0000181 (Haw. Mar. 10, 2023)

New Article: "Toward Principled Background Principles in Takings Law" (Strahilevitz & Hansen)

Check this out, a new article co-authored by a federal judge's law clerk and lawprof Lior Strahilevitz (Chicago). With the title, "Toward Principled Background Principles in Takings Law" are we going to read it? You bet. (Unlike a lot of new scholarship that we post here, we read this one immediately.)

Here's the Abstract:

Blunders made by lawyers, judges, and scholars have caused the Supreme Court’s recent opinion in Cedar Point Nursery v. Hassid to be deeply misunderstood. In Cedar Point, the Court re-wrote takings law by treating temporary and part-time entries onto private property as per se takings. Prior to Cedar Point these sorts of government-authorized physical entries would have been evaluated under a balancing framework that almost invariably enabled the government to prevail. As it happens, there were two well-established rules of black letter law that California’s lawyers and amici mistakenly failed to invoke in defending the Cedar Point union organizer access regulation. First, a physical takings claim accrues when a regulation authorizing third parties to enter private property is promulgated, not when the third party actually enters the land. Second, only the party that owned the land at the time the physical taking cause of action accrued can prevail. Under these doctrines, Cedar Point Nursery’s lawsuit was filed decades too late. By the wrong plaintiff. California’s oversights were probably outcome determinative.

Moving beyond Monday-morning quarterbacking, we argue that the statute of limitations arguments available to governments in future cases help provide the essential limiting principles that went unmentioned in Cedar Point. In the aftermath of Cedar Point prominent scholars denounced the opinion as a vehicle for gutting antidiscrimination law, labor law, environmental law, rent control, and other parts of the regulatory state. Our analysis reveals that these concerns are likely exaggerated because defenders of those long-standing limits on the right to exclude can invoke the statute of limitations arguments that California’s lawyers failed to raise. On the other hand, new restrictions on owners’ rights to exclude are vulnerable to legal challenge. Properly understood, contemporary takings law grandfathers in many longstanding limits on the right to exclude while constraining governments that wish to tackle collective action problems by restricting property rights in new ways. Moreover, statutes of limitations and related doctrines can provide courts with something that has been elusive since the Supreme Court’s 1992 takings decision in Lucas v. South Carolina Coastal Council: a principled and coherent account of what restrictions on owners’ rights are impervious to takings claims because they qualify as background principles of state property law.

Read it at SSRN.

[Before we go on, Disclosure 1: my law firm represented the property owner in Cedar Point Nursery, so yes, I have a dog in the hunt.]

What do you think of the article's premise and conclusion that a regulation alleged to allow a physical invasion must be brought when the regulation is adopted, and not when property is actually invaded?

Government lawyers need not and should not repeat the mistake that California’s lawyers made, a goof that evidently went unnoticed by all three dissenting justices, all thirteen amici, and every scholar who has written about Cedar Point. By correcting Cedar Point’s litigation strategy blunder, governments may avoid having to compensate landlords who want to refuse to rent to members of a protected class, landlords whose ability to evict is constrained by rent control laws, employers who wish to fire workers involved in unionization efforts, and business owners who want to bill governments for the inconvenience of having to endure entry by health and safety inspectors. Most of these claims brought by property owners should fail if defended by competent government counsel who can learn from California’s error.

Id. at 5 (footnote omitted).

In other words, the allegedly unconstitutional act is the enactment of the regulation, and not also the failure to provide compensation when an invitee subsequently exercises the rights granted by the regulation to enter the plaintiff's property against the owner's wishes.

And what of the article's other premise, that regulations allowing physical invasions and occupations of property over time become "background principles of the State's law of property and nuisance" and disappear upon conveyance of the property?

Understandably, many observers were unnerved by Chief Justice Roberts’ decision to brush aside the notion that the California regulation – just seven years younger than the Fair Housing Act – was a background principle of state property law, unnerved many observers. If the 1975 California statute and regulation do not count by 2021 as background principles that inhere in title why shouldn’t the 1968 Fair Housing Act suffer the same fate? The response to Cedar Point from the least alarmed property scholars fell back on the idea that the Court would nonetheless treat the Fair Housing Act as a background principle. But no one has a good theory – other than a realist reading of the justices’ relative hostility to the goals of labor law – for why something magical happened between 1968 and 1975. After Cedar Point it is quite challenging to conclude that there are any principles at all underlying the Supreme Court’s conception of background principles. Our goals in this article include articulating coherent principles that are grounded in existing law and consistent with what the Court decided in Cedar Point.

Id. at 17 (footnotes omitted). 

Some preliminary impressions:

Are all physical invasion challenges facial claims? The article's premise seems to eviscerate the longstanding distinction in constitutional law generally -- and takings law specifically -- between a facial challenge and an as-applied challenge. The window opens on a facial challenge on behalf of everyone when a regulation is adopted, but we thought it was settled that individual property owners had to wait -- upon pain of being tossed out on ripeness grounds --  for the challenged regulation to actually be applied to their facts and circumstances. But the article does not mention the facial vs as-applied distinction.

Standing before incurring a concrete injury? The argument also seems a variation of the Federal Circuit's rationale in Campbell v. United States, 932 F.3d 1331 (Fed. Cir. 2019), where the court held "[i]n the case of a regulatory taking, however, the taking may occur before the effect of the regulatory action is felt and the actual damage to the property interest is entirely determinable." Disclosure 2: we thought the Federal Circuit's reasoning in that case was faulty (that a property owner has an obligation to sue even before she is actually injured seems very strange), and petitioned for certiorari (denied). But it does seem like a weird rule, and very much at odds with injury-in-fact and Article III standing requirements.

Whither Kirby Forest? The rule also seems at odds with Kirby Forest Indus. v. United States, 467 U.S. 1 (1984), where the Court upheld all sorts of government actions that muck around with an owner's property rights prior to an actual judgment and tender of compensation in eminent domain cases. No, the Court concluded, the "taking" takes place in straight takings when there's been an adjudication of compensation and a tender of actual payment. And all those things which happened before that interfere with the owner's use -- like instituting an eminent domain action, filing a lis pendens and clouding title, drying up the market for the property, and similar -- do not interfere sufficiently with property interests because "petitioner was free to make whatever use it pleased of its property." Id. at 15-16. The California provision seems similar: until the union organizers actually entered Cedar Point property under color of the statute, the owner could exclude whom it wanted.

Too early and too late: You just know that if property owners had challenged the California statute as a taking upon enactment, but before anyone had actually attempted to enter under the authority of the statute, that the claim would not have been that they filed too late, but rather too early. Property owners are used to these type of inconsistent arguments and being whipsawed between being accused of filing too early, or too late (or, in many cases, both too early and too late at the same time). We don't think that the line the courts are going to enforce between ripeness and staleness is as clear as the authors make it out to be.

Get ready for more takings claims, federal courts. Unless the article is arguing for abandoning the remaining takings ripeness requirement (something we're down for, but so far the courts are not), we're not sure that a rule that will force prudent property owners to sue upon adoption of new regulations is one that the courts will enthusiastically embrace (even if they should).

Zombie takings, or zombie statutes? The article describes Cedar Point as a "zombie takings claim" (p. 33) because it challenged a statute originally adopted decades ago. It argues that after about 40 years, regulation ossifies into a background principle, immune from challenge. Even though we'd use the "zombie" label to describe the California statute and others like it that are there on the books but are pretty obscure, let's go with the zombie takings label. That brings up an intriguing tradeoff: would we surrender Cedar Point and the ability to challenge 40 year old regulations in return for eliminating the ripeness hurdle and opening up courts to immediate challenges of newly-adopted regulations as we think the piece is advocating for? Hmmmmm... we gotta think about that one.

Cringe. No matter what, we think that calling the Cedar Point outcome the result of "blunders" by lawyers, judges, and scholars (p. 1), the government's strategy a "goof" (p. 5) and "bad lawyering" (p. 48), its lawyers "bone-headed" (id. at 49 & n.314), and accusing government counsel of committing "a colossal strategic blunder" (id. at 2), and saying that the government's lawyers in Cedar Point and Lucas committed "legal malpractice" (id.), is unnecessary and uncharitable in the extreme. We get that the authors don't care for the outcome in Cedar Point and wish their "Monday-morning quarterbacking" strategy (their words not ours, see p.1) would have been raised and tested. But in our view, these type of accusations should not be thrown about lightly, especially by those who didn't enter the amici arena themselves, and by those who don't appear to have been there, done that because their collective time actually practicing law and making strategic litigation decisions in real time in real cases appears to be, let's say, very limited. We hope there can be even vehement disagreement about the issues without slinging accusations of malfeasance, incompetence, and especially malpractice -- claims the practicing bar takes very, very seriously. We respectfully urge the authors and the law journal editors to reconsider these characterizations prior to print publication. 

We're going to meditate on the article and its arguments more. But whatever you may think of the authors' analysis and conclusions, this piece is well worth reading.

Video: "Are Zoning Laws the Cause of Hawaii's Housing Crisis?" With Nolan Gray

As we wrote up here, national zoning and planning expert Nolan Gray joined our U. Hawaii Land Use class (and the public) last week for a talk about whether zoning is an impediment to affordable housing in Hawaii.

Thank you to Grassroot Institute of Hawaii for recording the talk, as well as making Mr. Gray's appearance in our classroom possible. See Grassroot's summary of his presentation here.

If you'd prefer to just listen, try this.

A National Zoning Expert Pays A Visit To The L580 Land Use Class At U. Hawaii

The session was recorded.
Here's the video and audio.

Earlier this week, planner M. Nolan Gray, author of the new book, "Arbitrary Lines: How Zoning Broke the American City and How to Fix It" (Island Press 2022) joined our Land Use class at the University of Hawaii Law School to talk about zoning and housing.

The title of his talk was "Are zoning laws the cause of Hawaii's housing crisis?" The subject matter is important, and the public was invited to join us. As you can see, there was a lot of interest in this critical topic and turnout was excellent. 

Thank you to the Grassroot Institute of Hawaii for their sponsorship of the event, and for generously getting Mr. Gray to Honolulu for his in-person appearance. It was also nice to have refreshments following class, and a chance to "talk story" (as we say) with our speaker, the students, and our guests.

Grassroot recorded the session on video, and we shall post a link to it once it is published and available. If you could not join us for his talk, be sure to watch and listen to the recording. Some very compelling stuff.

The public was also invited.
(We let them know they arrived at the right place.)


All set up and ready for our guest speaker.
Recording posted here. 

What is Zoning? A good question (the impression is that "zoning"
means all regulation of land uses). Not quite. Generally speaking, the term 
only covers regulation of use, density, and height. Getting the terms correct
is important. Mr. Gray does not advocate for tossing all regulation,
only zoning. He advocates for a more planning-centric
approach. Read his book for the details.

The heart of the matter: how and why overly restrictive zoning
(see above) inevitably restricts the supply of housing by focusing
mostly on single-family residential. Leave zoning the way it is,
and you are effectively planning for an affordability crisis.

A good, engaged audience.

Mahalo, Nolan, for coming all this way. 

We allocated plenty of time for questions from the audience.

Land Use, Hawaii Style: We're Underway With Law 580 (Land Use) At The University Of Hawaii

The Registrar would not accept our suggestion
to change the course description to "Dirt Law"

This spring, starting mid-January we've been back in a law classroom, this time at one of our law almae matres, the University of Hawaii School of Law in Honolulu.

The course is Land Use Management and Control, and we meet twice a week to earn either 3 or 4 credits (depending on how big a final paper the students want to write).

Hey, we know that fellow...

For Hawaii law students this is an essential course whether or not they intend to become dirt lawyers after graduation. Because land use law and policy cuts across almost all other areas of practice in the 808 (being a small place where land is a scarce commodity, property plays an oversize part in shaping policy, politics, and law), every law student should be taking the class. 

The view from the lectern.

Fill it with 100% pure Kona coffee, of course.

Our former viewpoint, when we were in
these seats (many years ago!).

A bimal bottle from a long-gone brand.

And since we're on the topic of Hawaii, this. A bottle from a long-ago Hawaii soda company. This was gifted recently by a friend, who is a collector of, and an expert in, these type of things. This doesn't have any direct relation to the Land Use course, but it seems like a good time to put up this interesting item, and to say mahalo for thinking to send it our way.  

There might be another motivation for being in
Hawaii during the winter...

Ice Ice Baby: A Report From The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

We were eagerly anticipating 40th American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conference. The 2022 Conference in Scottsdale was one of the first meetings where everyone was back in-person (and was a smashing success), but that conference was early in the game so not everyone could or would attend. But in the past year most of us got back to some semblance of "normal," and the turnout promised to be good.

We had record registrations: with over 300 attendees, faculty, and staff signed up, things were shaping up.

Plus, we were headed to Austin, Texas. The last time we held the Conference there in 2016, we loved it so much it has been in-demand for a return visit. And this year is the debut Conference for some new planning co-chairs for both the main tracks as well as the "Condemnation 101" tracks, so the buzz for the 2023 Austin Conference was building.

But then the weather reminded us that Mother Nature is often the boss. 

Very Icy Austin on Wednesday (Conference Eve).

On Tuesday, one day before the Conference was to get underway, the 2023 Central Texas Ice Storm blew in and things were gonna get (as they say) "challenging."

Austin Airport effectively shut down with few flights in or out. Planes and cancellations stacked up nationwide. And even for those nearby, slick icy roads, and seemingly everything was closed, from gas stations to hotels to restaurants. Widespread power outages. 

Were we ready with Plan B if people couldn't get on-site? Read on.

Unless you are already here or are driving,
you ain't getting to Austin via AUS any time soon, pard.

Even flying from sunny California was a problem.

Ticket agent: Austin flight cancelled. How about flying to Houston and then driving?

Me: Sure, that'll work. Just get me to Texas and I'll figure it out from there.

Improvise, adapt, overcome: planes, trains, and automobiles (and car rentals, and long-distance rideshares, and four-layovers-from-Boise flights). Jacksonville to Austin via Chicago and Nashville.

Although those of us who made it to Austin were receiving widespread reports of people delayed and rerouted, we had only a handful who said they would not be pressing forward to get here. 

When this is what greets you when you arrive
at your conference site...uh oh.

And yes, Austin was cold and icy. Most things shuttered and widespread loss of power. But the Conference venue was up and running, and throughout the day on Wednesday, faculty, staff, and attendees were showing up. Trickling in, but showing up or on the way.

When this is what you see at the United Airlines
luggage counter, you ask yourself:
Can I make my presentation in a t-shirt and sweats? (Yes!)

We had confidence, and were prepared
for everyone to get to Austin.

So the aforementioned Plan B went into effect. Agenda items shuffled from tomorrow to today because the speaker is here, now. One speaker in the room, one speaker remote. Our audience is full of experts ... say, Billy can you pinch-hit on this panel? Sure. One speaker remoting in from his (unexpected) hotel room in Phoenix and presenting, before he went to the airport in the afternoon to continue on to Austin.

And so forth. Our long-time ALI-CLE Program Attorney, Amy Weinberg (who was delayed out of Philadelphia) was working furiously behind the scenes doing a lot of juggling, updating, texting and calling, and making alternative arrangements. And the tech team from ALI-CLE was preparing for overload if needed.

Plan A: continue to set the room up, assuming everyone is here or on the
way, and we'll have most or all of our people in the room.

Our Planning Chairs were ready, even if not
all of us were actually there (yet).

Plan B: the ALI-CLE technical crew was prepared to livestream
and record the Conference if the weather made travel
to Austin impossible or infeasible.

The tech command center.

Before we go on, a big thank you to our generous sponsors.
Without your support, this Conference would not be as
good as it is, year after year.

We're underway, with a pretty good crowd.

Thursday morning, 9:00 a.m., and we're looking not too bad. A fair number of folks have pressed forward despite the weather and travel disruptions and are in the room. More report they are not tapping out, and are pressing onwards.

We have more viewers remote than we originally anticipated, but the tech is holding up.

Over the next couple of days, our lawyers, judges, legal scholars, appraisers, law students, right-of-way agents, relocation experts, property owners, and other related professionals made their way to Austin.

The fact that folks who were experiencing some rather dramatic travel difficulties and delays (ask Jack about his late night Uber from Houston airport to Austin, or how our west coasters got re-routed all over creation), didn't quit but were determined to get to Austin told us something about why this Conference has been so successful over the decades.

It's more than great programming from the nation's experts. The Conference is also an essential venue to get acquainted with new colleagues and welcome them to the Dirt Law Bar, reconnect with long-time friends, and have a bit of fun together.

Most of the Conference attendees eventually made it, and very few (reasonably) threw in the towel and turned around for home. This was the 40th edition of the Conference, and we really know why it is one of the most-established and successful conferences in the ALI-CLE stable of programs. This year's experience really drove home why we come, and why our attendees and faculty are so dedicated and committed, despite the sacrifices we make to attend or to present. 

Hybrid: Pacific Legal Foundation's John Groen
remoting in while en-route via Phoenix, and
Baylor lawprof Jessica Asbridge on
"Everything Old is New Again: Why Today’s Practitioners
Need to Understand the Original Meaning of the
Takings and Just Compensation Clauses."


The "Condemnation 101" track was wildly popular
both with new members of the Eminent Domain Bar,
as well as old hands. Standing room only throughout the day.

We also had reports from the field that the remote viewing
was going well. Here's how we looked in the
mountains of North Carolina.

Let's not forget the substance of the Conference.
Lots of practical learning. Here's Hawaii's Mark Murakami
and Virginia's Steve Clarke on "Avoiding the Real Jeopardy:  
Structuring Eminent Domain Settlements."
And no, two-time Jeopardy! champion Steve did not
give answers in the form of a question.

Weather throughout Wednesday and Thursday was icy and nasty,
but towards the end of Thursday seemed to be clearing up.

Consequently, the view from the podium looked better and better
with more showing up and more reporting they were nearly there.

The programming at the Conference is traditionally
a mix of practical subjects and the more theoretical.
Here's one of the highlight latter programs,
Alan Ackerman (Michigan), Matthew Ackerman (also Michigan),
and Steve Davis (Missouri) on "What Does the Supreme Court
Mean When it Says Just Compensation is “Self-Executing?"

There's an ethics program, naturally, for those of us in jurisdictions
with mandatory CLE requirements. But we try and not do "typical"
(i.e., boring) ethics programs. Here's Sarah Kellner (Colorado) and
Shane Rayman (Ontario, CN) on "Ethics: Building Your Practice
by Mentoring the Next Generation of Eminent Domain Professionals."

An example of our practice-oriented programming: Tony DellaPelle
(New Jersey), Bernadette Duran-Brown (California), 
and Andrew Lines (Illinois) on "Preparing Your Expert
Witness to Shine in Virtual Proceedings:
Tools and Tips For Trial Lawyers." 

Andrew actually pretended he was far, far away for his "deposition"
when he was in fact one floor up from the Conference room.
Way to go all-in.

Thanks to our generous sponsors, we were able to avoid Austin's
icy roads and have our Mickelthwait barbecue
brought in for lunch. Was it well-received? See for yourself. Line
was through the lobby and nearly out the front door.

Thank you to Texas Supreme Court Justice Jimmy Blacklock
for speaking on "Developing Property Right Issues in Texas,
Questions and Answers with Justice Jimmy Blacklock"
(interviewed by Justin Hodge (Texas)

It was not an echo-chamber either. Here, in a hotly-debated
session, Jeff Redfern (Virginia), Steve Silva (Nevada), and
Lawprof Emilio Longoria (St Mary's Law, Texas)
debate "When the SWAT Team Comes (No) Knocking:
Police Power Takings."

Jeff, Steve, and Prof Longoria's session got everyone's blood pumping.

It wasn't all serious, and we had a bit of fun.
Like this after-hours live edition of the Eminent Domain & Right of Way
Clubhouse with Beth Smith (Wisconsin), Patrick McAllister (Indiana)
and some dude who was having a post-CLE session beer.

Some of our faculty are more formal and like to speak
standing at the lectern. Here, Pacific Legal Foundation's Jon Houghton
(New Jersey) and Ben Stormes (Montana) on
"Avoiding Pitfalls When Trying a Penn Central Case:
Lessons From the Takings Trenches."

Others are less formal, and speak while sitting
(and wildly gesticulating to make sure you are paying attention).
Kristen Renfro (California), and some guy on
"Your Regulatory Takings Case is in Federal Court – Now What?"

By Friday morning, the Austin weather was looking up. Really up.
And we nearly had everyone in the room.
By hook or by crook, most everyone was there.

By Friday were were pretty much back to normal.
Nearly all faculty and all attendees in the room.
And thus we turned it over to our Saturday morning stalwarts,
starting with Jim Burling, here speaking about "The Many Theories of
Property - Do They Matter in Court?" (and Pufendorf)

No one wanted to miss Michael Berger's "Regulatory Takings Update"
on Saturday morning either.

When you can fill this many seats at a CLE conference on a
Saturday morning after two full days of programming,
you know your speakers are the
right ones (thank you Jim and Michael).

After Jim and Michael did their thing, we held our "National Forum,"
a moderated "open-mic" session where Conference attendees
take to the podium and speak about their case or issue,
or crowdsource a question. Here, Pacific Legal
Foundation's Kady Valois, speaking about
our firm's latest takings cert grant.

We were happy to announce that the 41st ALI-CLE Eminent Domain &
Land Valuation Litigation Conference will be held February 1-3, 2024,
at the JW Marriott in New Orleans.
Save the date!

Ivy Cadle (Georgia - Go Dawgs!) is already planning his trip to
#EminentDomain 2024 in New Orleans.
See you there, Ivy.

With the programming wrapped up, it was time for farewells
and thank yous. Here, four of our law students from William and Mary Law,
who took the time out of their schedules to make their way to
Austin for some real-world learning and networking.
Well done, new colleagues!

Even after the proceedings closed, there was more work to be done.
Here, the ALI-CLE Tech Team breaks it down, after successfully
guiding us through the past four days. They are a large part of the
reason why this Conference works so well (plus, they make the
speakers look really good on camera).

To those who joined us - in-person or on-line, thank you. This conference reminded us of why this program is so successful, and why we all return year-after-year.

To those of you who didn't (or couldn't) join us, here's what you missed. You need to remedy that, and come join us next year in New Orleans...

We'll see you in New Orleans for
#EminentDomain2024!
(Want to keep the conversation going in the
interim? Join the ALI-CLE Eminent Domain Conference
page on LinkedIn.)

We're Remote, So It's Easy To Join Us For The 36th Annual Land Use Institute

Land users: come join us online for the 36th Annual Land Use Institute. Yes, the venerable program is back again, with the usual line up of dirt law experts covering all you need to know and bringing you up to speed on the latest. Here's the description of the program:

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

This outstanding program features:

• Preeminent faculty of practitioners and academics who provide nationwide perspective without losing sight of state-specific issues.
• Critical review and analysis of the most important new cases;
• Practice-oriented discussion of basics and “hot” topics;
• Guidance on routine and complex procedural issues; and
• Substantial high-quality and well-researched course materials.

Topic and speaker details in the brochure. A very modest registration (law students are free!).

Find out more here. And come join us. We'll be speaking next week Tuesday (Feb. 14, 2023) on "The Use of Eminent Domain for Redevelopment & Economic Development Projects."

LAND USE INSTITUTE - 36th Annual Land Use Conference Program

Hey Honolulu, RSVP To Join Us: Nolan Gray, "Are zoning laws the cause of Hawaii's housing crisis?" Feb 15 @5:30, U.H. Law School

Here's your chance to spend some time with the author of one of the hottest land use and public policy books out there, Nolan Gray.

RSVP now (admission free, but space is limited) to join our Land Use class when we welcome Mr. Gray to respond to the question in the title of this post. Details:

Date: Wednesday, February 15, 2023

Time: 5:30pm - 7:00 pm, Hawaii Time

Location: University of Hawaii Law School (2515 Dole Street, Honolulu), Classroom #3.

Cost: Free, courtesy of Grassroot Institute of Hawaii

RSVP: You must register here to reserve your place in the room.

Parking: modest fee, available at the adjacent UH parking structure.

As we noted when we featured his book "Arbitrary Lines: How Zoning Broke the American City and How to Fix It" (Island Press 2022) at the top of our dirt lawyer holiday gift guide recently, his work is an accessible summary of what zoning is and what it isn't and isn't simply a polemic, but a thoughtful laying out of why the author (a former planner for New York City) believes that zoning's time is up. The book also offers solutions for what might replace zoning (Houston, we're looking at you).

From the registration site:

Housing prices in Hawaii are through the roof. Demand outpaces supply, and many local families are saying “Aloha” to Hawaii simply because they cannot afford to live here.

So what can state and county lawmakers do to address this crisis?

Nolan Gray, a former city planner in New York City who now leads a “Yes In My Backyard” advocacy group in California, thinks a good first step would be to abolish zoning laws. In February, he will talk in depth about that provocative proposal at two events sponsored by the Grassroot Institute of Hawaii.

Gray's presentation will be on Wednesday, Feb. 15, at the University of Hawaii at Manoa William S. Richardson School of Law, Classroom 3, from 5:30 to 7 p.m. Admission is free and paid parking is available in the law school lot or the main UH parking structure.

Keli‘i Akina, Grassroot Institute president and CEO, will moderate the event, including a Q&A session.

Gray, who also is a Ph.D. candidate in urban planning at the University of California, Los Angeles, wrote about zoning codes and housing shortages in his new book, “Arbitrary Lines: How Zoning Broke the American City and How to Fix It.”

He said zoning codes go beyond general city planning, and that by micromanaging real estate usage and density have served to limit housing supply and make America’s metropolitan areas unaffordable for most residents. In addition, he said, zoning laws have contributed to greater urban sprawl and pollution.

Seating is limited, so please register early. For more information, contact Sean Mitsui at 808-864-1776 or [email protected].

Come, join us and open your mind to his intriguing proposals.

An Ordinance Isn't A Taking Because It's A Valid Exercise Of Police Power?: What The Heck Is Going On In The Texas Court Of Appeals (First District)?

If your first reaction to the Texas Court of Appeals (First District)'s decision in City of Houston v. The Commons of Lake Houston, Ltd., No. 01-21-00369-DV (Jan. 12, 2023) is scratching your head, then please come join us in bewilderment.

After all, the court held that a takings claim failed because the city is immune from inverse condemnation. Say what? We thought that the self-executing nature of the just compensation requirement of the U.S. Constitution (and the Texas Constitution) means that claims of sovereign immunity don't hold water in inverse cases.

The Commons wants to develop "The Crossing," one of those big master-planned communities. The usual development activities entailed: master plan, subdivision plats, city approvals for infrastructure, and even some actual site work. "By April 2018, The Commons had invested millions of dollars in planning and infrastructure for The Crossing." Slip op. at 2.

But in reaction to Hurricane Harvey, the city adopted an ordinance amending the city's approach to development in floodplains. And "[s]ignificant portions of The Crossing are located within the City's 100-year or 500-year floodplains." Id. The ordinance was based on FEMA maps, which are required to be used as a condition of obtaining flood insurance. The regs changed the way the city was going to regulate development in the predicted 100 and 50 year floodplains. Instead of requiring that residences in the 100-year floodplain build one foot above flood elevation (and having no requirements for the 500-year floodplain), the new ordinance "required that new residential structures
within the 500-year floodplain be built at least two feet above the flood elevation." Slip op. at 6. 

The Commons asserted that applying the new ordinance to its already-underway project "would substantially damage the market value of the property and that the current development plan would be unfeasible." Slip op. at 7. State court inverse condemnation claim (under the Texas Constitution only) followed.

The city responded to the lawsuit by asserting the claims were not ripe because it had not reached a final decision denying the project (the new ordinance contains a variance mechanism), and when the trial court disagreed and held the case ripe, the city appealed and the court of appeals reversed: not ripe.

The Commons then went through the motions it needed to go through to confirm that yes, indeed, the city wasn't going to let The Crossing continue as originally ok'd. There was some of the usual "your application isn't complete" dance, after which The Commons submitted a new plan with a 72% reduction in developable land. "The City granted The Commons' amended plan." Slip op. at 10.

Next up, Round 2 of the lawsuit. Or more accurately, the Second Lawsuit. "The Commons alleged that the City's amended floodplain ordinance 'intentionally and unreasonably restricted The Commons' [] use and enjoyment of its property,'" and took it without compensation (asserting a Lucas-like and a Penn Central-like theory under Texas law). Id. 

The city tried the ripeness gambit again, but its main attack was that the takings claim was "barred by governmental immunity because the 2018 Floodplain Ordinance does not give rise to a takings claim as a matter of law." Slip op. at 11. Jump ahead to page 18 of the slip opinion for the reasons why the Court of Appeals agreed.

The city argued that The Commons could not assert a takings claim because the amended ordinance merely complied with FEMA requirements, and "requiring compliance with local laws consistent with FEMA/NFIP requirements does not constitute a taking." Slip op. at 18. Moreover, the ordinance can't be a taking because it is a police power regulation, "adopted to accomplish legitimate goals, [which] are substantially related to the public's health, safety, or general welfare, and are reasonable." Id.

Hey, we were just "track[ing] the criteria of the NFIP," claimed the city. Id. The court agreed that the U.S. Court of Appeals had already determined that if the government is just following FEMA and NFIP requirements, then, well, it just can't be a taking. See Adolph v. Federal Emergency Management Agency, 854 F.2d 732 (5th
Cir. 1988). But when did compliance with other law constitute some kind of safe harbor from the Just Compensation requirement? The parties argued about the applicability of Adolph and the details (see slip op. at 20-22), but to us, the bigger issue is what does compliance have to do with it at all: either the city's regulations go "too far" and affect The Commons' use of its property, or they don't. Does it matter why the city adopted the new floodplain ordinance?

To us, if the city is required to conform to FEMA requirements that means only that the regulation is likely to pass due process and public use muster, and really has no bearing at all on the impact of the regulation on a property owner's rights.

As if the court concluding that Adolph controlled wasn't enough, starting on page 25 the opinion alternatively held that there could not be a taking because -- get this -- the new floodplain ordinance is a valid exercise of the city's police power.

Yes, healthsafetywelfaremorals. But as we noted above (and have noted here many many times), the validity vel non of a regulation has little to do with whether it works a regulatory taking. You'd think that a valid regulatory purpose was the prerequisite to a takings claim not the stop sign. Some courts get it right.

We ask you: go read pages 25-28 of the Texas court's opinion. Sounds a lot like a due process analysis, doesn't it? All about the purpose of the ordinance. How it is reasonably designed to protect the public. How it survives the rational basis test.

Our response (since this is a case from the South, we feel entitled): bless your heart.

In case we're not being clear: the entire regulatory takings doctrine would make no sense if all the government need do to avoid liability is show that the regulations claimed to effect a taking are valid exercises of the police power. Indeed, the takings doctrine pretty much presumes that the taking is the consequence of an otherwise valid exercise of power. To conclude, as the court did, that the regulation can't be a taking because it is a valid exercise of the power to protect the healthsafetywelfaremorals of the public simply gets you into a self-proving rule.

Come on, Texas! We thought you got this stuff better than that.

City of Houston v. The Commons of Lake Houston, Ltd., No. 01-21-00369-DV (Tex. Ct. App. Jan. 12, 2023)

Guest Post - Kady Valois, "Divide (Or Not) and Conquer: Florida's Test For The Regulatory Takings Larger Parcel"

Today's post is by our Pacific Legal Foundation colleague Kady Valois, writing about last week's opinion by the Florida District Court of Appeal (Second District) in Lake Lincoln, LLC v. County of Manatee, No. 2D21-2826 (Jan. 13, 2023),

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Divide and Conquer (Or Not): Florida's Test
For The Regulatory Takings Larger Parcel

by Kady Valois

It is highly likely that anyone who follows this blog, at least as religiously as I do, groaned when the Supreme Court issued its decision in Murr v. Wisconsin, 137 S.Ct. 1933 (2017). After all, what could be more accessible and pro- private property than creating a balancing test within a balancing test and expanding the "parcel as a whole analysis" to encompass not only the regulated property but also any other property owned by the plaintiff (in the case of the Murr family, a parcel abutting the property they asserted was taken without compensation when Wisconsin's regulations effectively prohibited them from developing it). This emitted collective groan (see, e.g., this piece, describing the Murr majority's test as "Penn Central squared") was not only for the increased difficulty of litigating future takings claims, but also the loss of private property rights generally.

Fortunately, though, Murr's muddle had little effect on the property owners in the Lake Lincoln case. There, Florida’s Second District Court of Appeal was faced with substantially the same question SCOTUS addressed in Murr: namely, "what is the ‘relevant parcel’ upon which [the property owner’s] takings claim . . . should be measured.” Thankfully, and somewhat surprisingly, the Second District (employing Florida law principles) reached a different conclusion -- and applied a different analysis -- than the SCOTUS Murr majority.

The case arose out of Manatee County’s refusal to bisect and partially rezone a portion of Lake Lincoln’s ten-acre parcel, located within Tara’s Development of Regional Impact (DRI) – an area over eleven hundred acres - into two separate subplots. This refusal led to two separate regulatory takings claims, one sounding in Florida statutory law – the Bert J. Harris, Jr., Private Property Rights Protection Act – and the other under the Florida Constitution's Takings Clause. See slip op. at 4.

The trial court quickly disposed of both claims, granting the County summary judgment. It held that the entire 1,124-acre DRI parcel was the relevant parcel (aka the "denominator") for analyzing whether a taking occurred.

After a hearing on the motions, the trial court granted summary judgment in favor of the County on June 11, 2021. In its order the trial court concluded, "Considering the relevant factors and the undisputed facts and giving particular weight to the unique interdependence created by the DRI regulatory scheme, the Court finds the appropriate 'relevant parcel' in this case is the entire Tara DRI property."

Id.

Lake Lincoln appealed, arguing only the ten acres it owned should have been examined as the denominator/larger parcel.

The Second District Court of Appeal agreed. In doing so, the court employed an often-under-utilized Florida Supreme Court decision, Dep't of Trans. Div. of Admin. v. Jirik, 498 So.2d 1253 (1986). Jirik set forth a three-part test that eminent domain lawyers recognize: to determine the larger parcel in a regulatory takings case, a court examines a property’s "physical contiguity, unity of ownership, and unity of use."

Yes, the "three unities."

The court noted that unity of use incorporates a number of considerations including: (1) the intent of the owner, (2) the adaptability of the property, (3) the dependence between parcels, (4) the highest and best use of the property, (5) zoning, (6) the appearance of the land, (7) the actual use of the land, and (8) the possibility of tracts being combined in use in the reasonably near future.

The court of appeal concluded these unity of use factors tip in the owner's favor and that there was no overall use of the DRI parcel:

As to unity of use, the trial court stated the subfactors to consider but did not apply them.... The trial court appeared to make a determination on unity of use based in large part on the one subfactor that there was dependence between the parcels due to the development entitlements.

Regarding the subfactors of the intent of the owner and the dependence between parcels, Lake Lincoln intended the 3.32-acre subparcel to be a standalone commercial property. The 10.32-acre parcel is not dependent upon any adjacent DRI properties to appreciate the commercial use Lake Lincoln sought. Although Lake Lincoln sought the 3.32-acre subphase through a larger DRI amendment process and
the application lists the entire DRI as the property, Lake Lincoln was seeking amendments for other parcels in the DRI in addition to the 10.32-acre parcel and seeking transfers of entitlements. The application shows that Lake Lincoln's proposed use and intent was to develop a 3.32-acre commercial subphase independently from other properties within the DRI.

As to zoning, adaptability, and appearance, this standalone commercial property would be consistent with its future land-use classification and the neighboring uses. Commercial use for the 3.32-acre subparcel with the remainder of the 10.32 acres for use as wetland mitigation/ conservation is the property's highest and best use. Further, there is no realistic possibility of the parcel being combined with other tracts in the reasonably near future, given the DRI build-out.

Slip op. at 8-9.

The primary point on unity of use seems to have been that Lake Lincoln didn't own any other property within the DRI, and that using the DRI parcel as the takings denominator was just too expansive: just how was Lake Lincoln supposed to use someone else's property?

The second factor - physical contiguity - also cut in favor of Lake Lincoln. The court of appeal concluded that the mere proximity of the DRI to Lake Lincoln’s property was not enough to confer “relevant parcel” status. Rather, the fact Lake Lincoln owned only its ten acre parcel within the DRI and no other property, ruled the day.

Additionally, Lake Lincoln’s intent to create a standalone commercial property weighed heavily in the Second District Court’s analysis. An analysis which was fully in line with the Federal Circuit’s decision in Lost Tree Village Corp. v. United States, 707 F.3d 1286 (Fed. Cir. 2013).

Having concluded that the relevant parcel is the 10-acre piece, the court of appeal concluded that it shouldn't merely vacate the judgment and send the case back down for more. Instead, it reversed and remanded with an order to enter judgment on the Florida law takings claim in Lake Lincoln's favor:

Considering the undisputed facts, we conclude that the relevant parcel for takings purposes is the 10.32-acre parcel. When considering the proper relevant parcel, the undisputed facts demonstrated that Lake Lincoln could achieve no economic use on its 10.32-acre parcel as a result of the County's restriction to uses for only open spaces and wetlands during the nearly nine-year period.

We conclude that the trial court erred as a matter of law in determining that the entire 1,124 Tara DRI was the relevant parcel for takings purposes. We reverse the final summary judgment and the ruling that the County was entitled to summary judgment on count two for inverse condemnation and that Lake Lincoln was not entitled to partial summary judgment on count two. We remand for further proceedings and direct the trial court to enter partial summary judgment as to liability on count two in favor of Lake Lincoln. To the extent that the trial court granted summary judgment on count one [the Bert Harris Act claim], we affirm.

Slip op. at 10.

The Second Circuit’s reversal in this case and its ultimate decision that the relevant parcel was only Lake Lincoln’s ten acres, represents a marked departure from what seems to be Murr’s ever expanding nature.

And for once, the good guys and their little lot conquered all.

                       - Kady Valois

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Barista's comments: the Florida court here applies what we think is the right approach, as we wrote in our article criticizing the Murr majority, and suggesting that the three unities test under state law may be the way to go until Murr is clarified or overruled. See Restatement (SCOTUS) of Property - What Happened to Use in Murr v. Wisconsin?, 87 UMKC L. Rev. 891 (2019). And, again correctly, the Florida court focused on unity of use as the most critical factor of the three (something we emphasized in this amicus brief in another court).

Lake Lincoln, LLC v. Manatee County, No. 2D21-2826 (Fla. Dist. Ct. App. Jan. 13, 2023)

(Nearly) Last Call: There's Still Time To Join Us For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, Austin

We really want you there...

One (nearly) last reminder that there's still time to register for your space at the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 1-4, 2023, in Austin. In the past several years, we have sold out due to the conference room capacity and the conference hotel block. But there's still space, although we are nearly full. So register now - don't delay any further! 

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

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses
  
• When the SWAT Team Comes (No) Knocking: Police Power Takings

• Private Utility Takeovers – Lessons From a 67 Day Trial

• "Contraband": How Property Rights Helped Pave the Way for Civil Rights

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Preparing Your Expert Witness to Shine in Virtual Proceedings: Tools and Tips for Trial Lawyers

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

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

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

• the Condemnation 101 program (a one-day course for those new to the practice, or for experienced practitioners wanting a refresher)
• ...and much more!

To register, go here.

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

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

CA4: Property Owner Isn't "Vested" So No Takings Property

When we first read the U.S. Court of Appeals' opinion in PEM Entities, LLC v. County of Franklin, No. 21-1317 (Jan. 5, 2023), our reaction was one of skepticism. After all, at first blush, the court seemed to have concluded that in order to possess a property right protected by the Takings Clause, the owner needs first to prove it is a "vested" under state law.

That struck us as waaaay wrong. Yes, vesting under state law gets you a separate property interest, but failure to vest under state law does not mean you don't otherwise possess Takings Clause "private property." So what gives, Fourth Circuit?

Well, it turns out that despite us being ready to render a hearty j'accuse at the court, the outcome was a product of the claims made by the property owner (as they often are).

The opinion is short enough that it makes more sense for you to read the facts than for us to summarize them, but the real short story is that the case involves 150 acres of undeveloped land, and the owner asserted it was exempt from a county ordinance that severely regulated and restricted water and sewer connections for new developments. We're vested because we received county approvals back in 2005 in our preliminary subdivision plan, so we're not governed by the ordinance. When the county didn't agree, federal lawsuit followed. The complaint included a takings claim, which asserted the county had taken the vested property right of water and sewer service. The district court dismissed for lack of standing.

The Fourth Circuit agreed with the outcome (dismissal) but for a different reason: failure to state a claim. No property right = no taking. See slip op. at 5 ("We agree with the district court's bottom-line conclusion but get there via a somewhat different route."). When the property is framed as a vested right, then the issue is going to turn on state law; in this case North Carolina's law of vested rights. The Fourth Circuit concluded that under N.C. law, the owner here did not possess a vested right. The money it spent wasn't in reliance on a government permit, and the 2005 subdivision approval was preliminary not final. Interestingly, the opinion did not cite the most prominent recent N.C. decision on vesting.

But no matter. No vesting = no property. No property = no taking.

Just remember this: it's good for your takings claim when you have a vested right; if you have a rock-solid vested right under state law, chances are it is the foundation for a pretty robust takings claim. But lacking a vested right doesn't mean you don't own property. It may not mean you win, but at least you get past the preliminary hurdle that tripped up the owner here.

PEM Entities, LLC v. County of Franklin, No. 21-1317 (4th Cir. Jan. 5, 2023)

Md App: If You Want To Overturn The Amortization Doctrine, Take It Upstairs

You know the "amortization" doctrine: when an existing legal use is declared illegal, the government can avoid a takings claim by slowly phasing out the use, supposedly to allow the owner to recoup investment. The doctrine is established in Maryland by Grant v. Mayor and City Council of Baltimore, 129 A.2d 363 (Md. 1957), where the court held that amortization works if the time and uses allowed are reasonable.

Not all jurisdictions take that approach, however. For example, in Pennsylvania Northwest Distributors, Inc. v. Zoning Hearing Bd., 583 A.2d 1372 (Pa. 1991), the Pennsylvania court held "[a] lawful nonconforming use establishes in the property owner a vested property right which cannot be abrogated or destroyed, unless it is a nuisance, it is abandoned, or it is extinguished by eminent domain."

In In re Mangisteab, No. 2022-93 (Dec. 20, 2022) (unpub.), the Appellate Court of Maryland (fka the Court of Special Appeals, that state's intermediate court of appeals), recognized that the property owners asked to overturn Grant and adopt Pennsylvania's approach, but concluded that this was above the pay grade of lower court judges.

The case involves Baltimore's removal of liquor stores in residential zones as nonconforming uses under the city's zoning ordinance. Liquor stores have been illegal in residential zones since 1971, but have been allowed to continue to operate as long as they didn't cease operation for more than 18 months. But recently, the city said "no more," and gave the liquor stores two (or three) years to wind up. The owners challenged the change as a taking of their vested rights, and expressly asked the courts to abandon the Grant rule. 

Not too surprisingly, the trial court (and now the court of appeals) said no, that's a job for the Maryland Supreme Court:

Owners believe, however, that Grant and its progeny should be overturned. As counsel for appellant acknowledged at oral argument, however, if that were to occur, it must be done by the Supreme Court of Maryland, not this Court. Foster v. State, 247 Md. App. 642, 651 (2020) (“It is not up to this Court . . . to overrule a decision of the [Supreme Court] that is directly on point . . . . The rulings of the [Supreme Court] remain the law of this State . . . unless those decisions are either explained away or overruled by the [Supreme Court] itself.”), cert. denied, 475 Md. 687, 257 A.3d 1156 (2021) (cleaned up). Johns Hopkins Hosp. v. Correia, 174 Md. App. 359, 382 (2007) (“[T]his Court does not have the option of disregarding [Supreme Court] decisions that have not been overruled, no matter how old the precedent may be.”), aff’d, 405 Md. 509 (2008). Accord Livesay v. Baltimore County, 384 Md. 1, 14 (2004) (quoting Payne v. Tennessee, 501 U.S. 808, 827 (1991)) (Stare decisis “is the preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process.”). We will not, therefore, overrule Grant and hold that termination of a nonconforming use after a reasonable amortization is unconstitutional.

Slip op. at 16-17.

So stay tuned, we suspect this isn't over just yet.

In re Mangisteab, No. 2022-93 (Md. App. Ct. Dec. 20, 2022) (unpub.)

The Good The Bad And The Ugly: There's Something For Everyone In This Florida Takings Opinion

Here's the latest from a case we've featured here before.

There's something for everyone in the Florida District Court of Appeal (Second District)'s opinion in Jamieson v. Town of Fort Myers Beach, No. 2D21-2722 (Dec. 29, 2022).

Let's start with the outcome: the court reversed the trial court's summary judgment in a wetlands takings case, sending the matter back for a trial. Sounds good.

But let's back up a sec. The case started a long time ago, when Jamieson's seven-acre residentially-zoned property was designated as a wetland, resulting in a use density decline from 40 buildable lots to zero (wetlands density is one residence per 20 acres). For a decade, Jamieson tried to "change and/or correct the wetlands designation[.]" Slip op. at 3. The opinion lists out his efforts. He tried for

an application for boundary clarification regarding the extent of the wetlands, a request to transfer the residential density from the affected lots to another parcel, a request for an administrative determination that the wetlands designation was inaccurate as demonstrated by a South Florida Water Management District (SFWMD) survey that determined that the property was only sixty-one percent wetland, a request for a minimum use determination (MUD) to establish that the platted lots were entitled to residential development despite being "nonconforming," and a request for a variance from the Town's Land Development Code to allow development in accordance with state guidelines, which allowed development on wetlands with mitigation.

Slip op. at 3-4 (footnote omitted).

When "[a]ll of his efforts failed[,]" he filed a Bert Harris Act notice of claim. In response, the Town offered to settle by removing the wetlands designation on three lots, provided Jamieson surrender development rights on the remaining 37 lots. No thanks, he replied, and sued for a taking, both a Lucas categorical, and a Penn Central ad hoc.

As you might predict, this was just the opening of the second phase of his odyssey. The trial court granted the Town summary judgment on ripeness (which the court of appeal eventually reversed). The court of appeal reversed and remanded.

Back in the trial court, after a series of cross-motions for summary judgment (see page 5 of the slip opinion), the court denied Jamieson's motions, and again granted the Town's.

Back up to the court of appeal.

The Good: The court rejected the trial court's rationale for granting the Town summary judgment on Jamieson's categorical takings claim. The trial court relied on a footnote in the court of appeal's earlier opinion on ripeness to conclude that the takings issue had been resolved by the court of appeal and this merits ruling was law of the case. The logic goes like this: if Jamieson had not rejected the Town's settlement offer, he could have developed his property. In short: "you were willing to settle the case, so that proves that the wetlands designation hasn't deprived your property of all economically beneficial uses."

The court of appeal said no, the mention of the offer of settlement in the prior ripeness decision was only to show that the Town's position about uses of the Jamieson property was known "to a reasonable degree of certainty" and the case was therefore ripe, and decidedly did not resolve the merits (and indeed, the inferences the trial court should have drawn from the situation were that the Town was likely to reject the settlement even if Jamieson had accepted it).

The court also reversed the grant of summary judgment to the Town on Jamieson's Penn Central takings claim. These are "ad hoc" factors, and lack any 'set formula" and thus cannot be determined by summary judgment. Factual inquiries require a trial.

The Bad: But the court also rejected Jamieson's argument he is entitled to win his Bert Harris Act claim. Noting first that the claim might be untimely ("it appears that Jamieson may not have been entitled to assert a Bert Harris Act claim to begin with" slip op. at 15 [oof]), the opinion pointed out that the trial court never ruled on this issue. Thus, it remanded the claim, first providing a bit of guidance "[s]hould the trial court find that Jamieson's Bert Harris Act claim is not time-barred[.]" Slip op. at 16.

The short story here is that the Town's wetlands designation was not dispositive either way under the Act's "inordinately burdened" standard. The designation may be a factor, but that must be weighed against other factors (see the list on page 17). No summary judgment here for either party, and "these are issues of fact that must be brought to light in a trial[.]" Slip op. at 17. 

The Ugly: The court doubled down on the unfortunate mislabeling of takings claim that appear from time to time in Florida courts. See for example page 5, where the opinion contrasts "total" or "per se" takings (i.e., categorical Lucas wipeouts), with "partial" or "as-applied" takings (what the court labels ad hoc Penn Central takings). This doesn't appear to be an error of substance, but one of labeling. But as we know, preciseness matters here, in an area of law that is already confusing enough. "Partial" takings are not Penn Central takings, but takings of less than an entire interest in property (an easement, for example). And "as-applied" takings are also not Penn Central takings, but rather the format of a challenge (whether the plaintiff is claiming the government action is facially unconstitutional or only as applied to her property).

Jamieson v. Town of Fort Myers Beach, No. 2D21-2722 (Fla. Dist. Ct. App. Dec. 29, 2022)

Fireside Podcasts: Eminent Domain Podcast's Holiday Special 2022, And APA's Talk With Nolan Gray

This week is light for many of you, so instead of the deep and insightful analysis of recent decisions that we're known for (ha), we instead recommend to you two podcasts to warm the chilly nights.

So fire up the hearth, strap on those earbuds, and listen away.

First up, what is quickly becoming a December tradition: Clint Schumacher's Holiday Special, in which he asks past guests for their holiday traditions and memories.

Next, the American Planning Association's talk with Nolan Gray, whose book, "Arbitrary Lines:How Zoning Broke the American City and How to Fix It" is on our Dirt Lawyer Holiday Gift List this year. Find out more by listening in.

CA9: Land Use Is A "Sensitive Area Of Social Policy" So We're Gonna Let A Local Govt Bleed The Property Owner Out

Here's another one from the Ninth Circuit, argued on what one advocate called "land use day at the Ninth Circuit" (except, unlike the other two cases argued that day, the decision in this one gets published). 

In Gearing v. City of Half Moon Bay, No. 21-16688 (Dec. 8, 2022), the panel upheld the dismissal of a takings case, holding that federal courts should abstain from considering regulatory takings cases in favor of pending state court eminent domain actions, even when the condemnor instituted the state court action in response to the federal takings claim (and even though, unlike the other two cases argued that day, the federal takings claim is ripe).

This one started in federal court, where the property owner asserted the city's rejection of its development application worked a taking. In response, the city ran to state court and filed an eminent domain action to take the owner's fee simple interest in the land (we presume that's the property the city is condemning, because the opinion doesn't specify). Next, the city ran back to federal court with its state court complaint in hand and asked the federal court to exercise Pullman abstention to let the state court condemnation action play out first. The district court agreed ... federal case gone (for now).

Rejecting the owner's argument that abstention here was just a backdoor state-procedures exhaustion requirement -- both of which were rejected by the Supreme Court in Knick and Pakdel -- the Ninth Circuit affirmed. The panel first concluded that there's nothing in either of those cases that make federal takings claims immune from Pullman abstention. Those cases involved ripeness and exhaustion, and didn't say anything that prohibit federal courts from ducking federal civil rights issues. See slip op. at 7 ("As an initial matter, neither Knick nor Pakdel explicitly limit abstention in takings litigation. Neither case even addresses abstention."). Abstention is to avoid "friction" between federal and state courts, and to prevent federal courts from unduly interfering with the delicate balance between the states and the federal courts. Id.

Addressing the owner's argument that Pullman abstention results in a de facto return to the state court exhaustion requirement rejected by Knick, the panel concluded that "[t]he state court can adjudicate the eminent domain action without reaching the regulatory taking issue because eminent domain and regulatory takings suits compensate property owners for different injuries." Slip op. at 9.

Eminent domain compensates property owners for the forced sale of their properties to the government; the property is transferred to the government, and the owner is paid the property’s fair market value as of the date the government made a deposit on the property. Cal. Code Civ. Proc. § 1263.310. A regulatory taking action, on the other hand, compensates a property owner for “[t]he economic impact of [a] regulation . . . and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations.” See Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538–39 (2005) (quoting Penn Central Transp. Co v. New York City, 438 U.S. 104, 124 (1978)); Steven J. Eagle, Regulatory Takings § 8-9(a) (2021) (surveying methods of calculating compensation proportional to harm and level of interference).

Id.

In our view, the actual differences between a regulatory takings/inverse claim and an exercise of eminent domain are not those identified by the court, because it isn't so much about different injuries (eminent domain isn't at all about "injury" at all), but more like different property being taken and valued. Here, the owner's regulatory takings claim asserts that by engaging in some otherwise legitimate function (denial of permission to develop), the government has, from the owner's perspective, effectively condemned the right to use the property (the development rights), or even the fee simple interest if this is framed as a Lucas taking, but has not provided just compensation for the interest(s) taken. On the other hand, the owner's argument in the state court eminent domain case isn't that the government action is unconstitutional because it has not provided compensation, but that it has not paid (or offered) enough compensation for whatever interests it is taking. Those differences have nothing to do with the owner's "injury."

And wait, you say, in the eminent domain action, doesn't the property owner have to raise the issues he's raising in the regulatory takings action as part of his defense or as part of the highest and best use of the property? We'd think yes, that the owner has some sort of argument, or defense, or counterclaim that the eminent domain action isn't fully compensating him for the interests actually taken, and either should (or more likely must) raise these issues in the state court. Or would be taking a pretty big risk by not raising the issue. 

But the Ninth Circuit panel saw no downside, and concluded that the owner could somehow reserve the federal claim, even with an England reservation!

The Gearings could defend the eminent domain action without challenging the constitutionality of the City’s enforcement of LUP Section 9.3.5 or other regulations, and simply recover the fair market value of the property as restricted by those regulations.¹ When the eminent domain action concludes, they could then litigate their regulatory taking claim in federal court and recover damages for the economic impact of the regulation and interference with their investment-backed expectations. See Lingle, 544 U.S. at 538–39. The Gearings have not cited, and we are not aware of, any support for their assertion that the constitutionality of the City’s restrictions on their properties must be adjudicated before compensation can be determined for purposes of eminent domain.

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

¹ To the extent the Gearings argue that this would result in issue preclusion that would bar their federal claims, they are incorrect, because issue preclusion only applies to issues that were “actually litigated and decided in the prior proceedings.” Snoqualmie Indian Tribe v. Washington, 8 F.4th 853, 864 (9th Cir. 2021) (emphasis added). As noted, the Gearings would not be required to litigate their takings claim in the eminent domain action. Thus, this case is distinct from San Remo Hotel II, in which the property owners were required to litigate their takings claim in state-court proceedings in order for those claims to ripen for federal review. See 545 U.S. at 347.

Slip op. at 9-10.

Having determined that Pullman abstention was not categorically precluded, the panel found it simple to conclude that the doctrine should be invoked here because land use is a "sensitive area of social policy." But if Pakdel and Knick, stand for anything, they to reflect the Supreme Court’s thorough rejection of the longstanding trope that takings claims challenging land use regulations are “local” matters outside the competency of federal judges, and that federal courts need to give local governments a lot of leeway and right-of-first-action when it comes to restricting property owners' uses.

The Court made clear that land use and takings claims are civil rights matters and are to be treated like every other civil rights claim. If federal courts can resolve cases about monkey selfies, nude dancing, creating Valentine’s Day artwork out of naked bodies, and whether pet pigeons are diseased (all examples taken from cases in which a federal court resolved the issues) then it doesn't seem like a straightforward land use question is uniquely sensitive or so inherently local as to be beyond the ken of federal judges expressly tasked by Constitution (amend XIV) and statute (section 1983) with dealing with the issue.

More on the decision here ("Does Pullman Abstention Apply to Federal Takings Claims Post-Knick?") and here ("This Week at the Ninth: Abstention and the Golden Globes").

Will there be more on this one? Stay tuned.

Gearing v. City of Half Moon Bay, No. 21-16688 (9th Cir. Dec. 8, 2022)

Happy Birthday, Regulatory Takings - Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (Dec. 11,1922)

This story might be said to have had its roots millions of years ago.

It is about coal, after all. Anthracite coal, to be exact.

But that -- and today's date -- should give you a clue that, as we teased in this post a mere 28 days ago (the Supreme Court worked hard and fast in those days), today, Sunday, December 11, 2022, is the 100th birthday of the U.S. Supreme Court's opinion in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (Dec. 11, 1922).

True, what became known as the "regulatory takings" doctrine did not spring from whole cloth on December 11, 1922, but had been bouncing around in the common law for quite a while (see here and here for example).

But if you want to mark and official birthday for regulatory takings, you could not do better than Pennsylvania Coal (aka Mahon).

The case that launched a thousand academic tenure quests! The case that asks the oh-so-Holmesian question "how far is too far?" (and "too far" into what or from what- the owner's rights, the government's powers?). The case responsible for instructional videos. For law student cheat sheets. For wikis. For beaucoup online PowerPoint slide shows. For flashcards, for heaven's sake. 

A case cited nearly 10,000 times (thanks Westlaw):

And still kicking, despite calls for its overruling, and claims it has been sub silentio abrogated ("Abrogated?" I don't think so):

Eight-to-one, with only Justice Brandeis (predictably) in dissent.

We spent today -- a wet and snowy one -- with a colleague (and now friend) at the actual property that gave rise to the litigation in Pittston, Pennsylvania, visiting the site, talking to the present and former owners of the Mahon home, and learning more about the case, the people involved, the arguments, and the history and process of anthracite coal mining that led to the dispute.

You know the short story as set out in the Supreme Court's opinion. But you may not know the details. So in a series of upcoming posts, we'll bring you some of the more interesting aspects of the case.

Today, as we discussed the decision in what was, a century ago, Harold John Mahon, Esq.'s office (he was a lawyer you know, and along with co-counsel repped himself in the Supreme Court), we imagined that this might have been what he saw when he received the telegraph from Washington, D.C. on December 11, 1922, notifying him that the Court had ruled against him:

Before the day was through, we paid a visit to Mr. Mahon at the nearby cemetery, just to let him know that there are no hard feelings, and that the regulatory takings doctrine his case spawned is alive if not entirely well.

Here, at the Craig-Mahon family plot, he lies in repose with Mrs. Mahon.

Her story takes a most interesting twist (more on that in future posts).

So stay tuned. This post is just a teaser because we just had to post something today, in recognition of the 100th anniversary of the opinion.

But more will come on the Pennsylvania Coal Co. v. Mahon story. 

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (Dec. 11, 1922)

New Article: "Theft, Extortion, and the Constitution: Land Use Practice Needs an Ethical Infusion" (Michael Berger)

Here's your must-read for today, the latest journal article from Michael Berger, "Theft, Extortion, and the Constitution: Land Use Practice Needs an Ethical Infusion," 38 Touro L. Rev. 755 (2022).

Here's the Abstract:

There are many ways in which property owners/developers interact with regulators. To the extent that texts and articles deal with the ethical duties of the regulators, they tend to focus on things like conflicts of interest. But there is more. This article will examine numerous other ways in which regulators may run afoul of ethical practice in dealing with those whom they regulate.

And if that isn't enough to grab you, there's this:

There may be more to the issue than how to act in narrow circumstances. For one thing, there is the idea that government and the governed need to deal with each other on a level playing field. As one court put it:

It has been aptly said: “If we say with Mr. Justice Holmes, ‘Men must turn square corners when they deal with the Government,’ it is hard to see why the government should not be held to a like standard of rectangular rectitude when dealing with its citizens.”

Moreover, there are some peculiarly land use related questions that have a core of ethical content and that receive too little attention as ethical issues. For example, as the U.S. Supreme Court once put it, in explaining the need for just compensation when private property is taken for public use:

[t]he political ethics reflected in the Fifth Amendment reject confiscation as a measure of justice.

So, there is at least one parameter: ethics is a part of the Fifth Amendment, and it prohibits “confiscation” of private property. That seems a good place to start. This article will highlight a few of the larger ethical issues stemming from that beginning.

Id. at 756-757 (footnotes omitted).

Be sure to check it out.

Montana: Owning The Land Is Enough To Plead A Property Interest: Property Means "Rights Inherent In Ownership," Not Extent Of Govt Discretion

The Supreme Court of Montana's opinion in Tai Tam, LLC v. Missoula County, No. DA21-0660 (Nov. 15, 2022) starts off like a somewhat typical land use dispute turned into a constitutional fight. The property owner sought subdivision approvals for a 28-acre parcel to allow residential development, and the County denied the applications because "the proposal failure to adequately mitigate the loss of agricultural soils." Slip op. at 2.(Oh, and "bird habitat." Slip op. at 3.)

Next, the complaint, alleging some of the usual claims: due process, equal protection, and takings, and a statutory claim under Montana law. The trial court dismissed all claims: the statutory claims for failure to get in before the 30-day limitations period, and the constitutional property claims based on the court's conclusion that the plaintiff lacked a "property" interest.

We'll let you read the part of the opinion in which the court reversed the dismissal of the statutory claim for not filing within 30 days. Short story: the 30-day limitations period doesn't apply to the type of statutory damage claim that the plaintiff brought. See slip op. at 8 ("Ultimately, we find the plain language of [the statute] is not ambiguous and does not contain a 30-day statute of limitations.").

Now on to the good stuff - the property interest. The trial court concluded that the plaintiff did not possess a property interest in a subdivision application. Or maybe more precisely, in subdivision approval. The court also rejected the notion that the plaintiff owned the land, and that was sufficient to plead a property interest.

The Supreme Court had a different view. It started with the notion that on a motion to dismiss, every fact is deemed true and all inferences cut in the plaintiff's favor. Addressing the "threshold" question of whether the plaintiff owns property, the court held that the plaintiff's "ownership of McCauley Meadows [the land] is sufficient to state a protected property interest and bring § 1983 claims against the Board in this case." Slip op. at 13.

Rather than apply this interest to Tai Tam’s § 1983 claims, the District Court took Tai Tam’s concession it did not have a protected property interest in the subdivision application and ended its inquiry there. This was in error, as the District Court was required to address whether Tai Tam’s rights inherent in its ownership of McCauley Meadows were violated by the Board’s actions, and inactions, in this case.

Slip op. at 14.

This is significant because it rejects the usual sleight-of-law way that many courts define the property in these type of challenges. Often, courts will define the property as the thing which the plaintiff claims the government wrongly denied. (Here, that would be a grant of the subdivision.) But if you define the property as the very action being challenged -- then the owner's property is shaped almost exclusively by the extent of the regulator's discretion, and not by the property owner's rights. Where the focus is on the scope of the government's discretion to limit property uses and not on the owner's inherent rights, it shouldn't be too surprising that most of the time the courts conclude "no property."

Not here. 

Having concluded that the complaint adequately pleaded a property interest, the court also held that the due process/1983 claim survived because the complaint alleged the County had not provided adequate notice and an opportunity to be heard by denying subdivision approval due to lack of protection for ecological concerns, despite never having adopted any regulations requiring protection of ecological concerns. Slip op. at 17 ("Specifically, Tai Tam asserts the Board has “implemented policies to protect viewsheds, protect generic ecologic values, and protect adjacent property owners, despite having no such adopted regulations.”). In short, it may violate due process if the government is implementing policies "which are not based on any adopted regulations at all." Id.

And finally, the takings claim. The court concluded that as an "ad hoc" claim, the Penn Central takings claim was adequately pleaded:

Taking the allegations of Tai Tam’s Complaint as true, which we must at this stage in the proceedings, Barthel, ¶ 9, we find Tai Tam has sufficiently pled a takings claim in this case. According to the Complaint, Tai Tam alleges the Board is applying rules and regulations to the development of McCauley Meadows which have not been adopted with proper notice and opportunity to be heard and is unfairly requiring Tai Tam to shoulder the burden of preserving agricultural lands and viewsheds which was not imposed on other landowners. Whether these burdens are so unfair that they require compensation is, again, a question for another day.

Slip op. at 18.

The majority rejected the dissent's view that because the County retained discretion to deny the subdivision (but wait, we thought subdivision approvals were ministerial?), there could never be a takings claim based on a denial of same. The dissent's reasoning is one based on its conclusion that the denial of a discretionary permit "does not sufficiently interfere with reasonable investment-backed expectations or economic value under Penn Central." Slip op. at 18-19. But that, the majority concluded, is a judgment reserved for the trier of fact, not as a matter of law. Penn Central is an ad hoc inquiry. Check out pages 18-20 for more details of the majority's reasoning (it is definitely worth your time to do so).

Tai Tam, LLC v. Missoula County, No. DA 21-0660 (Montana Nov. 15, 2022)

Hawaii 5-80: Land Use Law At The University Of Hawaii

Starting in January, we'll be teaching the venerated, and oh-so-important Land Use course (Law 580) at the University of Hawaii's Law School.

We're at least temporarily stepping into some mighty big slippers (this is Hawaii, so we don't always wear shoes), as this is the course that our mentor Professor David Callies taught for decades. And is there a better venue in which to teach and study land use law and regulation, and its limits? After all, Hawaii may be the most heavily-regulated land on the planet, and is a focal point for every issue you can think of, from zoning to environmental restrictions to takings to public trust to subdivision to admin law to ... well, you get the drift.

We'll cover those topics, as well as the fundamentals. And we have a few surprises up our sleeve - some impressive guest lecturers, explorations of dirt law careers, and maybe a field trip or two. We'll bring you the highlights here, as they happen.

Is there a bit of pressure on us to get it right? You bet. But are we looking forward to it (not just an opportunity to head back to the 808, but because this is a great subject)? You bet.