April 2010

The eminent domain issue grabbing everyone’s attention these days is the question of whether property can be taken — the Public Use/Kelo issue — and not the issue in play in the vast majority of condemnation cases, just compensation. The question of how much a property owner is entitled to under the U.S. and state constitutions’ “just compensation” clauses when her property is taken does not grab many headlines. Other than than us down-in-the-trenches condemnation lawyers, and property owners who are being jacked by lowball government offers, the issue does not boil the blood.

The latest decision in the long-running odyssey of Bart Didden and the Village of Port Chester, New York illustrates the process. In the Matter of the Application of the Village of Port Chester, 2010 NY Slip Op 50532(U) (Apr. 2, 2010). My Owners’ Counsel of America colleague Michael Rikon represented the property owners.

The…

Continue Reading The Latest (Last?) Chapter In The Port Chester Condemnation

When is a lease that everyone agrees is worth more than a million dollars totally worthless? When it’s an eminent domain case and the court applies the “undivided fee” rule, that’s when.

Update: Professor Kanner adds his thoughts here.

Most eminent domain attorneys know about the infamous undivided fee rule (aka as the “unit rule” in some jurisdictions), a legal fiction which requires a trial courtto calculate valuation of property as if a single owner possessed everything, even when it is held by more than one interest. Under the rule, the condemnor is not required to compensate eachseparate interest in the property, but treats the property as if it had one owner.

For example, ifa condemned building is being leased to tenants, compensation ismeasured by the value of the undivided fee simple absolute value of thebuilding, not the aggregate value of the building and the leases. The building owner…

Continue Reading New Cert Petition: Is The “Undivided Fee” Rule Unconstitutional?

File this one in the obvious category. In Brown v. City of Pocatello, No. 35992 (Apr. 1, 2010), the Idaho Supreme Court held that a property owner’s complaint that her home was flooded as a result of roadwork by the city did not properly plead a cause of action for inverse condemnation.

Generally, if the government causes a physical invasion by water of property, it can be liable for compensation and damages on an inverse condemnation theory. The property owner’s complaint, however, asserted only a negligence claim against the city. Only after the city sought summary judgment did the property owner claim that the complaint also contained nuisance and inverse condemnation causes of action.

The Idaho Supreme Court held that even under its very loose “notice pleading” standards, a complaint which only identifies “negligence” as the theory of liability does not sufficiently put the defendant on notice of other claims against it. To make the point that neither nuisance nor inverse condemnation theories were raised, the court quoted the entire complaint on pages 6-8 of the slip opinion. While a complaint need not formally identify the theories of relief the court held, “the opposing party must be provided with notice of the underlying theories being pursued against them in order to adequately prepare for trial.” Slip op. at 8.

True enough, and in these situations the remedy would seem to be to allow for amendment of the complaint. The only question we have is why the plaintiff didn’t seek to do so. The opinion indicated that doing so might have made the failure to adequately plead a inverse condemnation cause of action harmless:

This Court also notes that when the decision was made to raise the issues of inverse condemnation and nuisance it would have been prudent to prepare an amended complaint alleging those causes of action and then seek permission to file that amended complaint. We express no opinion as to whether those claims have merit under the facts of this case, nor whether they would avoid the planning and design immunity provided by I.C. § 6-904(7), but at least those issues would have been preserved.

Slip op. at 11.
Continue Reading When Pleading An Inverse Condemnation Cause Of Action, You Should Probably Use The Term “Inverse Condemnation”

The New Hampshire Public Utilities Commission properly approved the taking of private water works by the City of Nashua. In Appeal of Pennichuck Water Works, Inc., No. 2009-274 (Mar. 25, 2010), the New Hampshire Supreme Court concluded taking was in the public interest, and that it resulted in a net benefit to the public.

New Hampshire law creates a rebuttable presumption that the acquisition of a privately-owned utility is in the public interest, and the court held that “those opposing the City’s petition to acquire [the water works] had to demonstrate, by at least a preponderance of the evidence, that the proposed takings was not in the public interest.” Slip op. at 9. Separately, the court determined that the taking had a “net public benefit” — an analysis required by the New Hampshire Constitution. Slip op. at 9-10.

Overall, this case does not add much to the “public…

Continue Reading New Hampshire Supreme Court Upholds Taking Of Private Water Works

When one lawyer writes that another is “my friend and colleague,” watch out: what follows may not be exactly friendly or collegial. For legal academics, the rule is even more pronounced when the friend-and-colleague’s name shows up in the title of an article.

In that vein, we bring you the latest chapter in the ongoing debate about “background principles” in regulatory takings analysis. In Background Principles, Takings, and Libertarian Property: A Response to Professor Huffman (posted on SSRN here), lawprofs Michael C. Blumm and J.B. Ruhl respond to Professor James Huffman’s critique of their work.

A short refresher. The “background principles” issue was spawned by Lucas v. South Carolina Coastal Commission, 505 U.S. 1003 (1995), the case in which the Court held that a regulation takes property when it deprives a property owner of “economically beneficial or productive use of land,” even if the government’s reasons for enacting…

Continue Reading Be Careful Of Lawprofs Bearing Praise: Another Chapter In The “Background Principles” Debate