June 2012

Here’s the cert petition asking the Supreme Court to review the Federal Circuit’s decision in CCA Associates v. United States, a case we’ve been following since it was being argued in the Court of Federal Claims. The CFC found a taking, but the Federal Circuit reversed, and then denied en banc review.

Here are the Questions Presented:

Pursuant to a regulatory agreement with the Department of Housing and Urban Development (“HUD”), Petitioner agreed to maintain and operate an apartment complex as low-income housing for as long as a government-insured, 40-year mortgage on the property remained outstanding. The transaction documents entered into among Petitioner, HUD, and the lender provided Petitioner with the express right to prepay this government-insured mortgage after 20 years and thereby regain complete control of the property. In response to concerns that owners would prepay their government-insured mortgages and cease providing low-income housing, Congress outlawed…

Continue Reading Cert Petition: Federal Circuit In Conflict With Kaiser Aetna

Every now and then, there’s a cert petition which those who generally support the petitioner’s side of the equation secretly hope is not granted, and breathe a sigh of relief when the Court denies review. Today, we’re sure that those on the regulatory side of the table are doing just that, because the Court declined to review the Third Circuit’s decision in R&J Holding Co. v. Redevelopment Authority of Montgomery County, 670 F.3d 420 (3d Cir. Dec. 9, 2011), a case we detailed here.

In that case, the Third Circuit held that a property owner did not litigate its federal takings claims in an earlier state court case, and thus actually allowed a property owner to raise its federal constitutional claims in federal court. In its cert petition, the redevelopment agency claimed that the Third Circuit’s application of Pennsylvania preclusion law created an “unfair procedural trap” for…

Continue Reading Cert Denied In Williamson County Case

Recently, in Intellectual Laziness on the Supreme Court, a short essay about the Supreme Court’s recent Equal Protection decision about unequal property assessments, Professor Richard Epstein wrote, “[i]t’s time to scrap the irrational ‘rational basis test.'” Decisions like the Ninth Circuit’s recent opinion in Samson v. City of Bainbridge Island, No. 10-35352 (9th Cir. June 15, 2012) make you think he’s onto something.

We were about to do a detailed post about the case, when our partner Mark Murakami beat us to it, so we won’t repeat the facts or the panel’s analysis (more accurately, lack of analysis, given the application of the “rational basis” test) here. Instead, we offer these thoughts:

  • A property owner can win in state court, and obtain a ruling that a temporary building moratorium is unconstitutional, but a permanent prohibition is not? That’s because the ruling was one of Washington state

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Continue Reading 9th Circuit Weeps For Property Owners Subject To “Long Odyssey,” But Still Rules Against Them

Check out United States v. 32.42 Acres of Land, No. 10-56568 (9th Cir. June 14, 2012), the case in which the Ninth Circuit held that a federal taking of state land (for a Navy base in San Diego) extinguishes the state’s tidelands public trust, even if the property is later conveyed to a private party. California argued that the state’s public trust lay dormant while the feds held the property, but was “quiescent” and would “re-emerge” upon any transfer from the U.S. to a private party.

We won’t go through the facts of the case (the opinion is short, and an interesting read), but here’s the short story: the feds condemned state-owned land, which was subject to California’s common law public tidelands trust because it was under water at the time of California’s admission to the Union. The state argued that its public trust rights would essentially lie dorman…

Continue Reading 9th Circuit: Federal Eminent Domain Power Trumps Equal Footing Doctrine

The Hawaii Intermediate Court of Appeals issued an opinion yesterday in Pavsek v. Sandvold, No. 29179 (June 13, 2012), holding that a person complaining about a vacation rental cannot circumvent the City’s enforcement procedures and the administrative appeal process by instituting an original jurisdiction lawsuit claiming that a homeowner is renting her property in violation of the City’s prohibition on rentals of less than thirty days:

We hold that: (1) HRS § 46-4(a) does create a private right of action in favor of a real estate owner directly affected by an alleged LUO [Land Use Ordinance] zoning violation, but that the owner’s action is subject to the doctrine of primary jurisdiction; (2) under the doctrine of primary jurisdiction, the Pavseks are required to seek an administrative determination of their claim that their neighbors have been violating the LUO before proceeding with their suit to obtain judicial enforcement of the…

Continue Reading HAWICA: Must Pursue Administrative Process To Object To Vacation Rentals

Today’s post is by our colleague Thor Hearne, who regularly represents property owners in the Court of Federal Claims, the Federal Circuit, and the Supreme Court. He recently joined us on the faculty of the ALI-ABA eminent domain program in San Diego, and spoke at the 2011 Brigham-Kanner Property Rights Conference in Beijing. He’s familiar to our readers who have followed his success in “rails to trails” cases in the CFC, and for his earlier guest posts on these issues. Thor reports on the latest developments.

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The Justice Department has now lost more than twenty consecutive Trails Act taking cases in the past year and one-half. Ingram v. United States, No. 10-463L (May 24, 2012), and Whispell Foreign Cars, Inc. v. United States, No. 09-315L (June 5, 2012) are the two latest defeats for the federal government. 

Years ago a railroad operated by the South Carolina port authority abandoned an 80-mile long railroad right-of-way easement in Beaufort County, South Carolina. This railroad easement had been established before the Civil War. Under South Carolina law and the terms of the easement, when the railroad stopped using the right-of-way, the easement terminated and the owners of the fee estate regained unencumbered title and possession of the land.  But, under auspices of the National Trail System Act, the STB issued an order establishing a new rail-trail corridor easement across the land. Almost twenty-five years ago the Supreme Court declared that such a “rail-to-trail” conversion was a taking of the owners’ property for which the Fifth Amendment required the federal government to pay “just compensation” to the owner. See Preseault v. ICC, 494 U.S. 1 (1990).

But, rather than acknowledge its constitutional obligation to compensate property owners in Trails Act taking cases, the Justice Department has chosen to dispute the government’s constitutional obligation to pay any compensation to the landowner. The Justice Department contends that because the federal Trails Act allows for a new railroad to be built across the land in the indefinite future (so-called “railbanking”), current public recreational use of the land is the same as operating a railroad and, therefore, such use of the land is within the scope of the original railroad easement. Every time the Justice Department has made this argument, it has lost, including before the Supreme Court which, literally, laughed the government’s argument out of court. Yet, the DOJ continues making this losing argument.  Not surprisingly, Judge Horn rejected the government’s argument in Ingram. Judge Horn wrote, “courts in this Circuit have declined to find railbanking a railroad purpose or even a relevant consideration for analysis of a claim for a Trails Act taking.”

Ingram v. United States is one of the most recent cases to reject the government’s argument. In Ingram, the government attempted a twist on its prior argument. It argued, in essence, “OK, so we took your land for a federal rail-trail corridor easement. But, since a railroad had once run across your land, we need only pay you for the nominal ‘incremental’ burden imposed by the public using this land for recreation.” The government made this same argument in Raulerson v. United States, 99 Fed. Cl. 9 (2011), Rogers  v. United States, 90 Fed. Cl. 432 (2011), and Ladd v. United States, 630 F.3d 1015 (Fed. Cir. 2010) – and other cases. In all these earlier cases the government’s argument was rejected and the court emphatically declared the nature of a Trails Act taking was a taking of the landowners’ right to unencumbered title and exclusive possession of the land. And, yet, the Justice Department continues to make this same losing argument. 

Judge Horn followed this settled law and held, “but for issuance of the [STB’s order], upon transfer of the easements for other than railroad purposes, the easements would have reverted to the plaintiffs in fee simple and plaintiffs would have held their property interests unencumbered by any easements. The measure of just compensation to the plaintiffs for the takings of plaintiffs’ property should capture the value of the reversionary interests in their “before taken” condition, unencumbered by the easements.”

On June 5, 2012, Chief Judge Emily Hewitt of the Court of Federal Claims handed the Justice Department another defeat. Whispell Foreign Cars, Inc. v. United States involved a Trails Act taking of land in St. Petersburg, Florida next to the Tropicana Dome. The railroad right-of-way was originally established in the early 1900’s. A portion of the railroad ran across platted city streets. The city passed an ordinance in 1914 authorizing the railroad to construct the railroad line within city street easements, and the railroad was abandoned in 2004. The STB issued an order authorizing a rail-to-trail conversion of the abandoned railroad line and the landowner sought compensation. The court had earlier found the government liable for Fifth Amendment taking of this property, See Whispell, 100 Fed. Cl. at 541 concluding that the easement originally granted the railroad was “limited to constructing, maintaining, and operating railway tracks, and the government effected a taking of plaintiffs’ property by imposing a new easement for public recreational trail use on their property.”

But, the Justice Department still denied the government’s obligation to pay the landowner and argued the owner did not hold title to the land under the street and abandoned railway right-of-way. The DOJ refused to recognize the “Florida rule that, when a platted street is dedicated to the public, the abutting lot owner remains the owner of the land underlying the street to the center line.” This “centerline” presumption is a principle of property law recognized by almost every state. The Justice Department’s decision to contest this long-settled principle of law required significant additional briefing and delay. Judge Hewitt ruled, “[The landowner] was the owner in fee simple of the property to the centerline of the land underlying the railway easement at the time of the taking and is entitled to just compensation therfor.” The Justice Department is currently also contesting the “centerline presumption” in a Trails Act case where this issue was referred to the Colorado Supreme Court. 

As these two most recent decisions demonstrate, the Justice Department continues to pursue – and lose – a costly litigation strategy in Trails Act taking cases. Both taxpayers and the landowners whose property has been taken would be well-served if the Justice Department would reconsider its “scorched-earth” response to Trails Act takings litigation and work for a prompt, fail and cost-efficient resolution of these landowners’ constitutional right to be paid just compensation.
Continue Reading Guest Post: Two More Rails-To-Trails Property Owner Victories

Here’s the cert petition in a case we’ve been following that presents a question that has divided the lower courts – do the nexus and rough proportionality tests for whether a land use exaction works a taking apply to exactions of cash, or are they limited to land exactions? In St. Johns River Water Management Dist v. Koontz, No. SC09-713 (Nov. 3, 2011), the Florida Supreme Court added to the lower court split when it held under both the U.S. and Florida Constitutions that the Nollan and Dolan tests are only applicable “where the condition/exaction sought by the government involves a dedication of or over the owner’s interest in real property in exchange for permit approval; and only when the regulatory agency actually issues the permit sought, thereby rendering the owner’s interest in the real property subject to the dedication imposed.”

The property owner has now sought U.S. Supreme…

Continue Reading New Cert Petition: Nollan/Dolan Not Limited To Land Exactions

A one-time flood can result in government liability for inverse condemnation. That’s the holding of the Virginia Supreme Court in Livingston v. Virginia Dep’t of Transportation, No. 101006 (Va. June 7, 2012), in which the court reversed the trial court demurrer (dismissal of the case for failure to state a claim).

The plaintiffs claim that in building the Beltway in the 1960’s, VDOT straigtened and relocated a portion of Cameron Run, a stream feeding into the Potomac River. They also claimed that VDOT’s failed to maintain the relocated channel in the intervening years. The latter failure resulted in their homes being flooded with sewage after a massive rainfall in 2006.

The homeowner filed an inverse action in state court to recover just compenation under the Virginia Constitution, which requires compensation when private property is taken or damaged for public use. The defedants demurred, arguing that they plaintiffs lacked standing…

Continue Reading Virginia: Single Instance Of Flooding Can Support Inverse Condemnation Claim

Last week, we were on the Rick Hamada program on KHVH-AM, summing up the recent Hawaii Supreme Court oral arguments in Kaleikini v. Yoshioka, No. SCAP-11-0000611, the appeal asking whether archaeological review must be completed for the entire 20-mile length of the Honolulu rail project, or whether it can be done on a “phased” or segment-by-segment basis. (A preview and briefs are posted here.)

Here’s a “video” (no picture, this is radio).Continue Reading More Thoughts On Honolulu Rail And The Sufficiency Of Archaeological Review

SCOTUSblog has picked the cert petition in Redevelopment Authority of the County of Montgomery, Pennsylvania v. R & J Holding Co.as its “Petition of the Day” —

Issue(s): (1) Whether issue preclusion bars a takings claim based on the Fifth Amendment only where the state court expressly decides Fifth Amendment issues or, additionally, where the state court decides the same takings claim under state takings law; and (2) whether, after a federal court’s dismissal of a takings claim under Williamson County Regional Planning Comm’n v. Hamilton Bank and the assertion in state court of an England v. Louisiana State Bd. of Med. Examiners reservation, a federal court — circumventing San Remo Hotel, L.P. v. City & County of San Francisco and Williamson County — can rely on that reservation, notwithstanding its invalidity, in refusing to apply claim preclusion to bar the reasserted takings claim.

The case is…

Continue Reading Petition Arguing That Distinguishing Williamson County Results In An “Unfair Procedural Trap For Condemning Authorities Is “Petition Of The Day”