U.S. Supreme Court Cases
When I started preparing this paper, I was going to whine that the U.S. Supreme Court was ignoring us because it took a pass last year. The only attention it paid to taking cases was to deny certiorari. (All that changed when the Court returned in October. Stay tuned.) Here are two of my favorite (because they were both my petitions) missed opportunities from last year.
Kottschade v. City of Rochester, 319 F.3d 1038 (8th Cir. 2003).
Landowner sought permit for townhouse development on 16.4 acre parcel. After years of submissions and negotiations, City finally granted a permit subject to financially ruinous conditions. Among the conditions was a reduction in the number of homes from 104 to 26. Requests for variance were denied. When landowner asked the city to explain the rough proportionality between the conditions imposed and the impact of his project on city services (as required by Dolan v. City of Tigard, 512 U.S. 374 [1994]), city refused. Instead, city demanded landowner demonstrate how the conditions were not proportional.
Landowner sued in U.S. District Court, believing (a) he had a right to under City of Chicago v. International College of Surgeons, 522 U.S. 156 (1997), which grants defendant cities automatic right to remove such cases from state to federal court, and (b) the only way to obtain federal court review is to sue there directly, because proceeding in state court first generally invokes doctrines of res judicata or collateral estoppel. District Court dismissed on the basis of Williamson County Reg. Plan. Commn. v. Hamilton Bank, 473 U.S. 172 (1985).
Court of Appeals affirmed. That court acknowledged "anomalous . . . gap in Supreme Court jurisprudence" that permits government to remove state case to federal court while prohibiting property owner from filing there initially, but concludes that resolution is up to Supreme Court.
Supreme Court declined the invitation.
Yardarm Restaurant, Inc. v. City of Pompano Beach, 834 So.2d 861 (Fla. App. 2002).
How does one begin to describe a case that has been in process since 1972 (not a misprint; typo neither)? That was when the owners of a highly successful waterfront restaurant in south Florida decided to expand with a hotel and marina. They ran afoul of the local, entrenched power structure, many of whose members felt their ocean views would be interfered with by the construction. As a result, the owners were subjected to multiple acts of changing the rules while the game's in progress. That wasn't just their opinion. Florida trial courts repeatedly told the City it couldn't change the rules and ordered lawful processing of applications. Eventually, after clandestine meetings among government members and powerful citizens, Yardarm lost not only the permits it sought, but the property as well—through foreclosure caused by the horrific delay.
The trial court found liability for a taking under the state constitution and the city appealed. On appeal (after the state supreme court removed the appellate panel that was about to hear argument and replaced it with another) reversed. On remand, a different trial judge found liability under the federal constitution as both a taking and a deprivation of property without due process. The state supreme court (divided) denied review, as did the U.S. Supreme Court.
Cases To Be Decided In The Current Term
As of now, there are four cases to keep track of. Stay tuned for later additions and the outcomes of these.
"Public Use" in Eminent Domain
Eminent domain has been called the state's "most awesome grant of power" to municipalities because it enables them to compel private citizens to sell property that they may not wish to sell, at a time of someone else's choosing, and on terms set either by the buyer or by a court. (See City of Oakland v. Oakland Raiders, 174 Cal.App.3d 414, 419 [1985]; Winger v. Aires, 89 A.2d 521, 522 [Pa. 1952].)
Concededly, the idea of "public use" has blurred from the obvious original intent that eminent domain be used to acquire property solely for public works like government offices, schools, highways and the like. In its first look at urban redevelopment laws, the U.S. Supreme Court agreed that eliminating "blight" was a sufficient public use to invoke this power. (Berman v. Parker, 348 U.S. 26 [1954].) Once "blight elimination" (or "slum clearance," as it was more openly called at the time) is accomplished, the government's disposition of the property to private redevelopers is irrelevant. The California Supreme Court, under rather unique circumstances, found nothing amiss in using the power to condemn a football team to play in the public stadium built for it years earlier. (City of Oakland v. Oakland Raiders, 32 Cal.3d 60 [1982].) And the U.S. Supreme Court's only other foray into this issue dealt with the peculiar manner of land title holding in Hawaii. (Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 [1984].)
At one extreme, the Michigan Supreme Court issued a controversial decision a quarter-century ago that seemed to loosen the floodgates not only there but elsewhere. The decision in Poletown Neighborhood Council v. Detroit, 304 N.W.2d 455 (Mich. 1981) allowed government agencies to condemn private property for the sole purpose of handing it over to a private business for a different use. In plain English, economic development would suffice to satisfy the constitutional requirement that the power of eminent domain be used only to convert land from private use to public use—even when the new use was not even nominally "public."
Alan Ackerman will fill you in on the Michigan situation. In a nutshell, Poletown destroyed 1200 households, 16 churches, more than 100 businesses, a U.S. post office, and a 278-bed hospital. (See Armond Cohen, Poletown, Detroit: A Case Study in "Public Use" and Reindustrialization [Lincoln Inst. of Land Policy 1982].) The reason? General Motors wanted to build a new Cadillac assembly plant and threatened to build it in another state—leaving "Motor City" without one of its signature industrial sites. Detroit eventually spent some $200 million assembling and razing the site, and then sold it to GM for $6.5 million. For this, GM promised 6000 new jobs. Reality is that no more than 3000 ever materialized. But Poletown—along with its structures of both historical and architectural significance—is now history.
But the idea of taking property that is not otherwise blighted or infirm, simply to allow different citizens to use it has not been universally cheered. A California court, for example, recently overturned a scam to designate much of the resort town of Mammoth Lakes as "blighted," so it could be "redeveloped"—using condemnation power where necessary—into a more profitable recreational community. (Friends of Mammoth v. Town of Mammoth Lakes Redevelopment Agency, 82 Cal.App.4th 511 [2000].)
The Illinois Supreme Court likewise ended a scheme in which a local development authority openly advertised that it would use its power of eminent domain to acquire property when a prospective developer was unable to buy all the land needed for the project. Refusing to allow government agencies "to act as a default broker of land . . . ," the court held the practice unconstitutional. (Southwestern Illinois Development Auth. v. National City Environmental, 768 N.E.2d 1 [Ill. 2002].)
This is a terribly controversial legal area. Detroit was not alone in its expansive use of condemnation in aid of commercial development. Yonkers, New York, for example, used its power to condemn land to accommodate expansion plans of the Otis Elevator Company. (Yonkers Redevelopment Agency v. Morris, 335 N.E.2d 327 [N.Y. 1975].) A few years later, Otis Elevator changed its mind, left town anyway, and left the city holding a very empty bag. (City of Yonkers v. Otis Elevator Co., 844 F.2d 42 [2d Cir. 1988].)
The Michigan Supreme Court recently overturned Poletown (see County of Wayne v. Hathcock, 684 N.W.2d 765 [Mich. 2004]), holding that Poletown's conclusion that, because "generalized economic benefit" was in the public interest, acquisition of private property to transfer title to someone who promised to make a "better" economic use was the same as a "public use," could not pass constitutional muster. It had been, said the court, "a radical and unabashed departure from the entirety of this Court's . . . eminent domain jurisprudence." Consequently, "we must overrule Poletown in order to vindicate our Constitution, protect the people's property rights, and preserve the legitimacy of the judicial branch as the expositor—not creator—of fundamental law."
The issue is ripe for coherence. In the Connecticut case pending review this Term, that State's Supreme Court examined the same issue as Michigan and, by a 4-3 vote, reached the opposite conclusion. (Kelo v. City of New London, 843 A.2d 500 [Conn. 2004], cert.granted, No. 04-108.) There, the City of New London concluded that replacing a working class residential and commercial area with 90 acres of industrial park and office space would be better for the city's economic prospects. The project was projected to generate 700 to 1300 new permanent jobs, in addition to construction jobs and indirect employment away from the building site. Property tax revenues were predicted to be a million dollars, plus or minus. On the other side of the ledger, after displacing the current residents, and paying the court ordered compensation, the city would lease it to the redeveloper for 99 years at a rental of $1 per year.
We're about to find out whether the same constitutional guarantee means the same thing in Connecticut that it does in Michigan. Or elsewhere. This seems one of those central issues on which there ought to be national uniformity.
Agins Prong One Revisited
The 9th Circuit decided a case called Chevron USA, Inc. v. Bronster, 363 F.3d 846 (9th Cir. 2004), referred to as Chevron II, because the case had made an earlier Ninth Circuit appearance resulting in a remand. (See Chevron USA, Inc. v. Cayetano, 224 F.3d 1030 [9th Cir. 2000] [Chevron I].) There will now apparently be a Chevron III, as the Supreme Court granted cert. in Chevron II, under the name Lingle v. Chevron USA, Inc., No. 04-163.
The case involved a state statute regulating the maximum rent an oil company can charge dealers who lease its service stations. The legislature said it wanted to do so to reduce gasoline prices. After trial, the District Court found that the statute would have the opposite effect, i.e., it would cause gasoline prices to rise.
In the Chevron litigation, the lower courts applied one of two alternative tests to determine whether government regulation violates the Takings Clause, an alternative that has been oft-repeated by the Supreme Court since its initial announcement in Agins v. City of Tiburon, 447 U.S. 255 (1980).
In Agins, the High Court declared that a government regulation effects an unconstitutional taking if it either fails to substantially advance a legitimate state interest or denies the owner economically viable use of land. Thus, in order to pass constitutional muster, government regulation must satisfy both prongs of that test. If a property owner shows a governmental failure on either hand, the regulation is struck down (if it fails to substantially advance legitimate government interests), or compensation is awarded (if it is otherwise legitimate, but denies economically viable use). Chevron turns on the first prong of that alternative test, as the District Court found as a fact that the statute would achieve the opposite of its objective..
Some have complained about Agins' first prong, saying it allows “second-guessing” of elected officials, something don't like. That raises two questions. First, does the rule allow “second-guessing”; and second, is there something wrong with that? The answers, respectively, are yes and no, although its not really “guessing,” as evidence and legal analysis are involved.
Constitutionally, government is not allowed to operate “half-cocked.” Although it has always been true that legislatures are not forbidden to enact stupid laws (because the remedy is to throw the rascals out at the next election), constitutional constraints exist. Remember, this country was founded by people who revolted against a governing class that thought its decisions were unreviewable.
Thus, the concept of “no second-guessing” doesn’t fit our constitutional system—and never did. As the Pennsylvania Supreme Court classically put it, “The genius of our democracy springs from the bedrock foundation on which rests the proposition that office is held by no one whose orders, commands or directives are not subject to review.” (Winger v. Aires, 89 A.2d 521 [Pa. 1952].)
Indeed, this very question was directly presented to the U.S. Supreme Court only a few years ago. The first question presented by the city’s certiorari petition in City of Monterey v. Del Monte Dunes, 526 U.S. 687 (1999) was: “Whether liability for a regulatory taking can be based upon a standard that allows a jury or court to reweigh evidence concerning the reasonableness of the public entity’s land use decision.” In other words, could a trial court “second-guess” a governmental decision?
The Supreme Court’s answer was crisp and clear: “To the extent the city argues that, as a matter of law, its land-use decisions are immune from judicial scrutiny under all circumstances, its position is contrary to settled regulatory taking principles. We reject this claim of error.”
Moreover, a group of amici curiae—led by the U.S. Solicitor General, whose views generally attract the Court’s attention—urged the Supreme Court to address and overturn the “substantially advance” prong of Agins when it decided Del Monte Dunes. The Court refused. Beyond that, the Court affirmed the judgment, necessarily affirming the trial court’s instructions to the jury and the jury’s conclusion that the evidence showed that the city’s decision precluding development failed to substantially advance a legitimate state interest—resulting in an unconstitutional taking.
Is there a place for judicial deference to government? Certainly. When land is condemned, for example, the determination that the land is needed for a public use and that particular land is necessary for the project is entitled to deference. (Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 [1984].) However, that deference does not carry over when a regulation is challenged as a taking of property. The reason is that when government decides to condemn property, it concedes liability and the only issue is the amount of money that taking will cost.
By contrast, when government regulates in a harsh manner that is challenged as a taking, liability is denied by the government and must be determined in court. As the Supreme Court too pains to point out in Del Monte Dunes, government denial of liability changes the litigation markedly, and the deference owed the initial decision declines accordingly.
When government legislates broadly, it is also entitled to deference. (See City of Euclid v. Ambler Realty Co., 272 U.S. 365 [1926] [upholding new general city zoning ordinance].) When, however, government targets an individual or a small group, the matter is otherwise. In Chevron, the legislation (no matter how generally worded) was plainly aimed at a discrete target. Otherwise, the legislature would not have justified the statute on the need to rein in oligopoly and ensure continued competition in a specific industry.
The issue that will be heatedly argued in Chevron III is whether to keep the Agins prong 1 test as a takings test. Hawaii argues that this is really a due process test, not a takings test, and that it is apparently willing to be judged as a matter of due process, but not as a matter of takings law.
Why? If it is the same test, what does it matter which clause of the 5th Amendment controls? Plenty. The operative phrase is "standard of review." The standard which the government must meet to defend against a due process charge is very low. Some have openly referred to it as "the idiot test," as only an idiot could fail to satisfy it. Takings law has used a somewhat higher standard of scrutiny. For illustration, examine the procedural and factual background of Del Monte Dunes. The landowner had claimed both a regulatory taking and a substantive due process deprivation. The trial judge submitted the former to the jury while retaining the latter for himself. The jury found a taking; the judge found no substantive due process problem. On post-trial motions, the judge also found nothing inconsistent about those results.
Those on Hawaii's side refer back to the Eastern Enterprises opinions noted earlier, taking heart that the Court will do away with half the Agins test and relegate it to the due process realm. If the Court would actually apply a meaningful due process review, one that subjected regulations to some sort of scrutiny, rather than abjectly deferring to whatever choice a legislative body makes, then it would be no problem for those who are regulated adjusting to that regime. The problem is that, if the review bar remains only barely above the ground, then it will, as the Court put it in Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1025, fn. 12 (1992) "amount[] to a test of whether the legislature has a stupid staff." Any staff worth its salary ought to be able to satisfy a standard due process test. That is why government likes the test and those who are regulated believe it is generally toothless.
Water Rights, Contracts, and Takings
Orff v. United States, 358 F.3d 1137 (9th Cir. 2004), cert. granted No. 03-1566, involved a 1963 contract between the federal government and the Westlands Water District in California for the delivery of water from the massive Central Valley Project. In turn, Westlands distributed the water to individual farmers. In 1993, the government slowed the tap. It cut water deliveries in half.
The government's action was the result of choosing between two conflicting duties. Under the Westlands contract, the government had a duty to deliver a specified amount of water on an agreed schedule. Under the Endangered Species Act (ESA), the government had a duty to protect the winter-run Chinook salmon and the Delta smelt, both of which had been classified as "threatened" under the ESA. In short, the water needed to be shared. To protect the fish, the government sent the Water District only half its allotment. The farmers sued for breach of contract, claiming third-party beneficiary status.
The farmers thought they were in pretty good legal shape. This wasn't the first time the government had reneged on this very contract. The first time resulted in a 1986 stipulated judgment requiring the government to perform its contractual duties.
But the farmers were wrong. The 9th Circuit held that notwithstanding the 1986 judgment, the contract itself unambiguously absolved the government for failure to deliver the full contractual amount of water where there is a shortage caused by a statutory mandate. Beyond that, the Court held that sovereign immunity precluded any suit by the farmers even to challenge whether the ESA had been properly applied.
To have standing to challenge the government's action, the farmers would have to have qualified as parties to the contract. They were not. Their last line of defense was that they were third-party beneficiaries of the contract. No good. The court said that such beneficiaries come in two flavors, "intended" and "incidental." Only the former would have standing to sue. The farmers were held to be the latter.
So, was there any remedy possible? Could be. When the district court dismissed the suit, it noted that jurisdiction for damage claims lay in the Court of Federal Claims, under the Tucker Act, and thus the district court had no jurisdiction to hear them.
Intriguingly, the Claims Court route is being followed by other California farmers with similar claims. They have succeeded at trial on both liability and damages. (Tulare Lake Basin Water Storage Dist. v. U.S., 59 Fed. Cl. 246 [2003] [liability], 61 Fed. Cl. 624 [2004] [damages].) Meanwhile, the parties have reportedly been in heavy settlement negotiations. (See Juliet Eilperin, "Farmers may win dispute on water, fish," San Francisco Chronicle, 12/8/04, p. A16 [reprint of a Washington Post column].)
The Supreme Court granted certiorari in Orff to resolve the third-party beneficiary issue. If that Court agrees with the 9th Circuit, presumably the farmers could seek redress in the Court of Federal Claims, a suit that could put the ESA at risk—something the government has assiduously avoided in the past.
Federal Statutory Rights and 42 U.S.C. § 1983
Initially, the decision in Abrams v. City of Rancho Palos Verdes, 354 F.3d 1094 (9th Cir. 2004), cert. granted sub nom. City of Rancho Palos Verdes v. Abrams, No. 03-1602, could appear to be of limited interest, involving the municipal authority over permits for ham radio towers. But the 9th Circuit holding goes beyond backyard radio towers. That court held that municipal violation of rights granted by the Telecommunications Act of 1996 paved the way for payment of damages under the Civil Rights Act, 42 U.S.C. § 1983. Section 1983's reach ought to be of interest to all.
Abrams had a permit to use his tower in an amateur setting. He also used it commercially. When the city learned of this, it obtained an injunction pending application for a conditional use permit. When asked, the city denied the permit. Thus, this suit.
The District Court found that the city violated the Act, but concluded that the Act contained a comprehensive remedial scheme, impliedly precluding damages under § 1983. The 9th Circuit disagreed. That conclusion conflicts with the decision in Nextel Partners, Inc. v. Kingston Township, 286 F.3d 687 (3d Cir. 2002). The conflict between the Circuits was squarely presented in the cert. petition, and may well have provided the impetus to take the case for review.
In any event, elucidation on the availability of damages under § 1983 appears to be in the offing.
Federal Cases
Ripeness: 8th Circuit Won't Even Apply The Rule It Established Itself A Year Earlier In Kottschade
Johnson v. City of Shorewood, 360 F.3d 810 (8th Cir. 2004).
As noted above, last year the 8th Circuit decided in Kottschade, that a property owner could not sue directly in federal court, but must seek relief first in the Minnesota courts and, only if dissatisfied there, later return to federal court. Mr. Kottschade explained that such a route would make the federal court unavailable on various procedural preclusion grounds, but the court was unmoved.
Now comes Johnson. The plaintiff dutifully filed suit in state court (and lost) so that the federal claim would then become "ripe" for federal court litigation. Not so fast, said the 8th Circuit. Notwithstanding what we said ourselves in Kottschade, the Rooker-Feldman doctrine prevents the federal courts from mucking around in this matter again. Case closed.
Ripeness: 2d Circuit Resolves The Williamson Trap By Expressly Creating An Exception To Claim And Issue Preclusion
Santini v. Connecticut Hazardous Waste Management Service, 42 F.3d 118 (2d Cir. 2003).
Waste Management Service (a government agency) publicly announced (complete with a full color map on the front page of the Hartford newspaper) the three finalists for the location of a new hazardous waste site. One was on Mr. Santini's property—property that he had been in the process of developing as a residential subdivision. Naturally, the publicity froze the market.
After the Santini property was not chosen for the waste site, he sued, seeking compensation for the damage done by the publicity and delay. He lost in the state courts. Connecticut courts would not permit him to reserve his federal issues, nor would they litigate them. When Santini then sought relief from the federal courts, the District Court dismissed because the state judgment was res judicata
The Second Circuit examined the unfairness that has developed in the wake of Williamson County. The court recognized the reality that property owners cannot ever seem to get their federal 5th Amendment guarantees litigated in federal court.
Unwilling to live with this conclusion, the Court established what it said would henceforth be known as the "Santini reservation," by which property owners could reserve federal issues for trial in federal court. The rule was applied retroactively to Mr. Santini (as the Santini reservation did not exist when he was in state court) and considered his case on the merits. The court then denied relief on the merits.
No Filing Fee Take: It Is Not A Taking To Require Permit Applicants To Pay Filing Fees
Roudnahal v. Ridge, 310 F.Supp.2d 884 (N.D. Ohio. 2003).
I confess to enough ignorance of immigration law as not to know whether Saleh Jafar Roudnahal and his friends had a legitimate beef with the Feds, who initiated removal proceedings for them when they voluntarily appeared for registration and fingerprinting under a special procedure.
However, I know enough about takings law to use this as another example of a dumb takings case that just turns judges off to this field of the law. In addition to their complaints about the immigration laws, the plaintiffs claimed a 5th Amendment taking because they had to pay filing fees. Did it ever have a chance? Don't be absurd.
The 9th Circuit: A Rent Control Potpouri From The Circuit That Brought You 25 of last Term's 73 Supreme Court decisions
The San Remo Hotel, L.P. v. San Francisco, 364 F.3d 1088 (9th Cir. 2004).
The latest decision in a long-running dispute between a hotel owner and a municipality that views hotel rooms as part of its low-income housing stock, thus requiring payment of substantial ransom to convert to serving tourists instead of long-term, low income residents. This case began in federal court and was held unripe. In subsequent state court litigation, the California Supreme Court held that no taking occurred under state law. Returning to federal court after formally reserving its federal issues for decision there, the property owner was again thrown out. This time, the Court of Appeals held that the California Supreme Court decision was the "equivalent" of a federal court decision and thus no federal hearing could be had.
This, then, is what it has come to: the right to litigate federal constitutional protections in federal court can be replaced by some sort of ersatz state law "equivalent." Is the U.S. Supreme Court listening? Cert. pending.
Hacienda Valley Mobile Estates v. City of Morgan Hill, 353 F.3d 651 (9th Cir. 2003).
Owner of mobile home park sued in federal court challenging local mobile home rent control ordinance that precluded raising rents when old tenant vacated and sold "mobile" unit to new tenant. That process allows the outgoing tenant to obtain a "premium" price because it includes the right to keep the unit in a rent controlled park.
The District Court dismissed for failure to proceed first in state court. The 9th Circuit affirmed. The court held that California law provides that landlords must seek to recoup any losses by seeking rent increases from future tenants. The body that would have to grant any such increases would be the same one that imposed the stringent controls in the first place, and it would place the burden on new tenants of paying for property taken by the city and given to the departing tenant in the form of the "premium." No matter, said the appellate court. State law must first be tried. Cert. pending.
Carson Harbor Village, Ltd. v. City of Carson, 353 F.3d 824 (9th Cir. 2004).
This case appears in the bound annals of the federal appellate judiciary a scant 173 pages after Hacienda Valley. Its facts are similar, as is its result. Cert. pending.
Ventura Mobilehome Communities Owners v. City of San Buenaventura, 371 F.3d 1046 (9th Cir. 2004).
Very similar case to Carson Harbor and Hacienda Valley. Same results. Cert. pending. By the luck of the computer that draws the panels in the 9th Circuit, nine different appellate judges heard these three cases. (For those of you from other circuits who are counting, that's not even half the total complement of available 9th Circuit judges.)
Cashman v. City of Cotati, 2004 WL 1575238 (9th Cir. 2004).
Here's a twist for you. Although this was also a mobile home rent control challenge that claimed the city's ordinance took its property without compensation, the case was litigated in federal court without any Williamson County hassle. Why? Because, although the owners urged that the ordinance was a taking because it failed the first prong of Agins (i.e., it failed to substantially advance a legitimate state interest—specifically, it did not advance the particular interests said to have been the basis for its adoption), the plaintiffs did not seek just compensation. They sought only to invalidate the ordinance. The panel concluded that Williamson County does not mandate repair to state courts when just compensation is not being sought.
Passing that hurdle, the court applied its own recent decisions in the Hawaiian litigation involving Chevron (discussed post) and concluded that a taking had occurred. Judge William Fletcher (who had been part of the unanimous panel in Hacienda Valley) dissented. Wait for it. Cert.—which is premature at this writing—will undoubtedly follow.
Takings Procedure: Court Shows How To Litigate A First-Prong Agins Case
Chevron USA, Inc. v. Lingle, 363 F.3d 846 (9th Cir 2004).
Concerned about the highly concentrated wholesale gasoline market in Hawaii and the resulting potential for high consumer prices (never forget that Hawaii must import all of its oil and gas by tanker), the state passed a law regulating the maximum rent an oil company can charge dealers who lease its service stations. Most of the Chevron stations in the state are owned by the company and leased to independent dealers.
Chevron challenged the law as an Agins prong one violation. The District Court initially granted summary judgment for Chevron, but that was reversed in Chevron USA, Inc. v. Cayetano, 224 F.3d 1030 (9th Cir. 2000). On remand, the District Court again ruled for Chevron and the state appealed. The 9th Circuit again reversed.
The District Court had two reasons for concluding that the statute failed to advance legitimate state grounds: it would not reduce gas prices, and it would not maintain the existence of an independent body of gas station operators. Right on the first; wrong on the second. The opinion contains a good factual discussion of the ways in which the Agins test can be met and defeated. It is worth reading.
State Cases
Wetland Take: Wetland Designation Did Not Establish a Per Se Taking But Factual Evaluation Did So Under Penn Central
Friedenberg v. New York State Dept. of Env. Conservation, 767 N.Y.S.2d 451 (App.Div. 2003).
Friedenburg owned 2.5 acres fronting on Shinnecock Bay in the Village of Southampton. It is zoned residential, but almost all of it was classified as wetland. When the property was purchased in 1962, it could legally have been filled and developed. There were essentially no restrictions to prohibit the construction of a single family home. A new statute was adopted in 1973. In 1987, Friedenburg applied for a development permit that was finally denied in 1995. This proceeding has been pending ever since. Because the application of the wetland regulations virtually eliminated the ability of the owner to use the property, the court found a taking.
More Legalized Extortion: California Remains Unmoved By Action The Supreme Court Called "Extortion"
Serra Canyon Company, Ltd. v. California Coastal Commn., 2004 WL 1331564 (2004).
Since its creation about a quarter-century ago, the California Coastal Commission (a regulatory body with overlying power over the entire 1000 miles of California's coastline) has sought to create a public beach (or at least a public access way) from Mexico to Oregon. (See Nollan v. California Coastal Commn., 483 U.S. 825, 841 [1987].) To accomplish that, the Commission exacted (as a condition to every permit it issued) an offer to dedicate a public easement. Those offers were to remain open for periods ranging up to 25 years. They were not accepted early (presumably because no public body wanted to accept responsibility for sanitation, maintenance, and parking) and are now coming to a head. Some agencies have begun "accepting" those outstanding offers. The Commission itself has appointed some non-profit entities to accept and operate them. Some of the current owners (who may or may not have been the original offerors) have begun to protest. In court.
This is one of those cases. The Serra Canyon Company succeeded to the interest of the offeror. It is a factually intriguing case because the property the original offeror sought to develop was a mobile home park located some seven miles from the site of the purported dedication. Had either Nollan (which looked askance at such exactions in general) or Dolan v. City of Tigard, 512 U.S. 374 (1994) (which demanded a relationship between the exaction and the proposed project) been in effect at the time, the "offer" could never have been demanded. However, that was 1983. And the offeror did not challenge the demand (apparently caring little for this orphan property located miles from its development). In late 2002, a state agency purported to accept the 1983 offer, and the owner sued to prevent it.
The California courts decided the case by rote on statute of limitations grounds. Aside from the fact that an "offer" is not complete until it is "accepted," and there would have been no detriment in 1983 from the naked offer alone, the court held that failure to sue immediately rendered the original unchallenged decision res judicata.
More troubling than the substantive error in real property law about offers and acceptances is the idea that property coerced from its owner by criminal means (the U.S. Supreme Court struck down the Nollan exaction, calling it "extortion") somehow, with the passage of time, becomes legitimate public land is troubling. Just once, it would be refreshing to see a court grapple with that concept.
No Taking: But Vested Rights Claim Is Valid
Sheffield Dev. Co., Inc. v. City of Glenn Heights, 2004 WL 422594 (Tex. 2003).
When Sheffield bought its 194 acres south of Dallas in 1996, it had investigated and learned that the property was available for residential development and that no zoning changes were planned. At the time, the law permitted an owner of vacant land to vest its zoning rights by filing a plat. Although city officials were meeting to discuss downzoning the property, they did not inform Sheffield for fear that he would file the plat and foil their plans. Then, without notice, the city council placed a moratorium on the filing and acceptance of plats to allow the city to study what to do for the future. After the moratorium expired, Sheffield tendered a plat which the city rejected on the ground that the moratorium was still in effect even without council action extending it. After the moratorium was officially extended and the property rezoned, Sheffield filed suit.
The court upheld both the moratorium and the rezoning, but held that Sheffield's claim of violation of vested rights based on the plat he attempted to file while there was no moratorium was ripe for decision. There seem to be multiple ways to skin this cat.
Traffic Impact Fee: Must Be Proportional To Impact Of Development. Honest. We Really Mean It.
City of Olympia v. Drebick, 83 P.3d 443 (Wash. App. 2004).
This case comes from the State of Washington, the north coast's twin to Oregon, which brought us the Dolan decision and its requirement that exactions bear a rough proportionality to the burden the proposed project will place on the municipality.
This one involved traffic impact fees attached to approval of a new office building. The city calculated its fee in a manner not directly related to the Dolan rule. It simply totaled the square footage of all new commercial office space likely to be built within the city's boundaries and the cost of all road improvements such space would necessitate. The city thus obtained what it calculated to be the average price per square foot that each new office building would need to contribute.
The city's premise was that it was simply imposing an excise tax, not a regulatory fee, and thus could do so without particularized regard to the impact of any specific project.
How soon they forget. The opinion first examines Washington statutory law and concludes that, even as an excise tax, this impost is illegal. Then it reprises the law from Nollan and Dolan and concludes that that really is the law and that Washington cities will need to follow it.
Some Late Additions
LX, Inc. v. Commonwealth of Kentucky, 381 F.3d 511 (6th Cir. 2004) [ripeness, Rooker- Feldman, and the 11th Amendment].
Toews v. U.S., 376 F.3d 1371 (Fed. Cir. 2004) ["Rails-to-Trails" Act takings liability].
Bass Enterprises Production Co. v. U.S., 381 U.S. 1360 (Fed. Cir. 2004) [whether delay in approving permits under oil and gas leases is a temporary taking].
Vaizburd v. U.S., 384 F.3d 1278 (Fed. Cir. 2004) ["cost of cure" as measure of compensation for physical invasion].