Inverse condemnation

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The redevelopment authority of Montgomery County, Pennsylvania has filed this cert petition seeking review of 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. Imagine that.

The procedural facts of the various state and federal cases that we detailed in our post on the case are worth reading, since, unlike the usual case where the property owner loses its state law takings claim in its Williamson County-required journey to state court, here the property owner initially prevailed on its state law taking claim. In its first visit to state court, the property owner defeated the redevelopment authority’s attempt to condemn its land. The owner then instituted an inverse condemnation claim in federal court for its damages. The federal court dismissed under Williamson County, and the owner brought its inverse case in state court (and expressly did not litigate its federal claim by filing an England reservation), which agreed and awarded it damages.

The Pennsylvania appeals court reversed, concluding that Pennsylvania law does not recognize a right of a property owner who defeats a taking to seek damages other than attorneys fees and costs under Pennsylvania statutes. Having been denied compensation under state law and being told it was categorically barred from bringing a state law compensation claim, the owner went back to federal court to litigate its federal takings claim. The district court dismissed. But the Third Circuit reversed, holding that the property owner did not present its federal challenge to the state court, and the redevelopment authority waived any challenge to the England reservation by not objecting.

Here are the Questions Presented:

In San Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323 (2005), this Court held that state court judgments in actions filed pursuant to Williamson County Regional Planning Comm’n v. Hamilton Bank, 473 U.S. 172 (1985), are entitled to preclusive effect on takings claims in a later federal action. The Court also held that this preclusive effect could not be “negate[d]” by asserting in the state court a purported “reservation,” under England v. Louisiana State Bd. of Med. Examiners, 375 U.S. 411 (1964), of the right to press the same takings claim in federal court based on the Fifth Amendment. The questions presented are:

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?

2. Whether, after a federal court’s dismissal of a takings claim under Williamson County, and the assertion in state court of an England reservation, a federal court—circumventing San Remo Hotel and Williamson County—can rely on that reservation, notwithstanding its invalidity, in refusing to apply claim preclusion to bar the reasserted takings claim?

This petition asks the Court to validate a the proposition that an England reservation is simply invalid in takings claims. See Petition at 27 (The Third Circuit’s “unprecedented use of Respondents’ invalid England reservation to circumvent claim preclusion has the same effect.”). The authority also argues that Williamson County requires a property owner to raise its federal claim in state court. Id. (“The Third Circuit’s decision thus threatens to become a template for encouraging (and permitting) adroit condemnees to refrain from asserting federal law arguments and authorities in state court …”).

Problem is, neither Williamson County nor San Remo can be read as aggressively as the redevelopment authority does in its petition. Williamson County does not require that a property owner bring her federal takings claim in state court, only that the state deny compensation under state law before the federal claim becomes ripe. And San Remo concluded that the property owner litigated its federal takings claim in the course of litigating its state compensation claim, effectively waiving its England reservation (“By broadening their state action beyond the mandamus petition to include their “substantially advances” claims, petitioners effectively asked the state court to resolve the same federal issues they asked it to reserve.”). In R & J Holding, the state appeals court concluded that Pennsylvania statutes do not permit a claim for compensation, and the property owner does not appear to have litigated the “functional equivalent” of a federal takings claim. 

Finally, get a load of this: the agency claming that this is all some unfair procedural machination by the property owner to pull the wool over its eyes and lure it into not objecting to the England reservation:

Beyond that, the Third Circuit’s decision also creates the possibility of an unfair procedural trap for condemning authorities. Given this Court’s clear directives in Allen and San Remo Hotel, condemning authorities rightly may see no need to object to asserted England reservations in state court Williamson County proceedings, which those authorities reasonably believe are invalid. Under the Third Circuit’s decision, however, the failure to object to such invalid England reservations would eliminate the authorities’ otherwise meritorious claim preclusion defense. Such a procedural trap is unfair and improper, and this Court should clarify in this case why it is flawed under settled precedent.

Petition at 27-28. And here it was that we believed it was only property owners who thought that Williamson County–San Remo created unfair procedural traps. Come on government agencies this stuff isn’t hard according to Justice Souter, who thinks it is just a matter of a phone call or two.

Our prediction? Cert denied.

If the Court grants cert, however, this case may be an opportunity for a conditional cross petition asking the Court to revist the wisdom of Williamson County, an issue it was not asked to decide in San Remo: From the San Remo transcript:

Justice O’Connor: And you haven’t asked us to revisit that Williamson County case, have you?

Mr. Utrecht: We have not asked that this Court reconsider the decision in Williamson County.

Justice O’Connor: Maybe you should have.

Even so, the Catch-22 nature of the Williamson County–San Remo trap prompted four Justices to note that the experiment in denying federal review to a federal constitutional claim may have run its course and is due for another look. Chief Justice Rehnquist wrote:

Finally, Williamson County‘s state-litigation rule has created some real anomalies, justifying our revisiting the issue… I joined the opinion of the Court in Williamson County. But further reflection and experience lead me to think that the justifications for its state-litigation requirement are suspect, while its impact on takings plaintiffs is dramatic… In an appropriate case, I believe the Court should reconsider whether plaintiffs asserting a Fifth Amendment takings claim based on the final decision of a state or local government entity must first seek compensation in state courts.

Is R & J Holding the “appropriate case?” We’ll be following the case to see. Follow the Court’s docket page here. Our thanks to Gideon Kanner for passing this along.
Continue Reading New Cert Petition: Distinguishing Williamson County Results In An “Unfair Procedural Trap For Condemning Authorities

The Supreme Court will not be reviewing the case in which a Manhattan property owner and developer was challenging the compensation awarded by New York courts for a taking near Lincoln Center. River Center LLC v. Dormitory Auth. of the State of New York, No. 11-922 (cert. petition filed Jan. 23, 2012). 

New York’s Appellate Division denied the property owner the right to present and have considered evidence about the valuation of the property because in order to be admissible, the property owner must be able to show the use it claims is the highest and best use is “established as reasonably probable and not a ‘speculative or hypothetical arrangement in the mind of the claimant,'” and that these plans will “come to fruition” in the near future. The property owner, represented in the Supreme Court by Harvard lawprof Laurence Tribe, argued in its cert petition that the …

Continue Reading Cert Denied In Manhattan Just Compensation Case

Your mission, should you choose to accept it: read Henderson v. City of Columbus, No. A-11-060 (Apr. 3, 2012), without creating bad puns about what a “crappy” or “stinky” case it must have been.

Why? Well, in that case, the Nebraska Court of Appeals held that the failure of the city’s sewage “lift station” after a heavy rain storm and the resultant flooding of the Hendersons’ “downstream” property with sewage could result in inverse condemnation. Nasty.

The most interesting part of the opinion begins on page 686, and discusses inverse condemnation in the context of these type of cases. The court rejected the argument that the property owner must prove the city was negligent, only that the city owned the sewer system, and the trial court concluded a city employee’s actions caused the sewage backup.

Long opinion, very detailed. Check it out.

Mission Accomplished. Continue Reading Nebraska App: Raw Sewage Flooding Property Is Inverse Condemnation

Last Friday, we noted that the Supreme Court was scheduled to consider whether to accept cert in Harmon v. Kimmel, No. 11-496 (cert. petition filed Oct. 17, 2011), the case challenging New York City’s residential rent control law as a taking, among other things.

However, according to the Court’s docket report this morning, the Court put off the decision for another week, rescheduling consideration until the April 20, 2012 conference. Does this mean that someone up there is interested? The same Justice or Justices who asked for briefs in response? That there is a titanic behind-the-scenes struggle between the Justices to get that fourth vote? The cert pool clerk was out sick last week?

We don’t know, but we sure are intrigued. Continue Reading Not So Fast…

Last we checked in, the case we’ve been referring to as the “bizarre condemnation” (Klumpp v. Borough of Avalon) was decided by the unanimous New Jersey Supreme Court in favor of the property owners, and remanded to the trial court for a determination of the compensation owed to the property owners, who had their land taken by the Borough in 1965. 

A few days ago, the trial court issued its decision, concluding that the compensation owed to the property owners were owed the fair market value of the property in 1965 ($5,400) plus interest at 8-9%, for a total of $284,802. The property owners claimed the value of what they lost was considerably more, since the Borough offered other property owners whose properties were taken different beachfront parcels in exchange, but never notified the Klumpps of that option. If they had been able to acquire …

Continue Reading The Bizarre Follow Up To New Jersey’s “Bizarre Condemnation”

Here’s the final cert stage brief (Petitioner’s Reply) in River Center LLC v. Dormitory Auth. of the State of New York, No. 11-922 (cert. petition filed Jan. 23, 2012), the case in which a Manhattan property owner and developer is challenging the compensation awarded by New York courts for a taking near Lincoln Center. This brief responds to the Dormitory Authority’s Brief in Opposition (posted here).

The Fifth Amendment’s Takings Clause will be eviscerated if the government is able to water down the Just Compensation guarantee to the point of meaninglessness. Property rights require vigilant enforcement of both the Takings and Just Compensation Clauses, and the instant petition provides a perfect vehicle for the reinvigoration of the latter.

Br. at 2. We filed an amicus brief supporting the property owner on behalf of Owners’ Counsel of America, posted here.

New York’s Appellate Division denied…

Continue Reading Petitioner’s Reply Brief In Manhattan Eminent Domain Case: Time To Reinvigorate The Just Compensation Clause

Here’s the latest in a case we’ve been following, a tale from New York that reminds us of the U.S. Supreme Court’s decision in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). Every takings lawyer worth his or her salt knows that Loretto stands for the proposition that a regulation allowing a physical invasion of private property — no matter how de minimus the invasion might be — is a per se regulatory taking. In that case it was the cable TV company that attached a small box to Mrs. Loretto’s building.

In Corsello v. Verizon New York, Inc., No. 51 (Mar. 29, 2012), the New York Court of Appeals held that when the telephone company “attached a box to a building that plaintiffs own, and used the box to transmit telephone communications to and from Verizon’s customers in other buildings,” the property owner could…

Continue Reading Loretto Redux: NY Court Of Appeals Revisits An Old Friend

Fire up your SCOTUS monitors and amicus pens: the Supreme Court has granted cert in Arkansas Game & Fish Comm’n v. United States, No. 11-597 (cert. granted Apr. 2, 2012), a case from the Federal Circuit that we’ve been watching. 

In a 2-1 decision, the Federal Circuit held that flooding caused by the Corps of Engineers was only temporary, and did not result in a compensable taking, and “at most created tort liablity.” 

Here’s the Question Presented:

Petitioner Arkansas Game & Fish Commission, a constitutional entity of the State of Arkansas, sought just compensation from the United States under the Takings Clause of the Fifth Amendment for physically taking its bottomland hardwood timber through six consecutive years of protested flooding during the sensitive growing season. The Court of Federal Claims awarded $5.7 million, finding that the Army Corps of Engineers’ actions foreseeably destroyed and degraded more than…

Continue Reading Supreme Court To Review Another Takings Case: Is Temporary Flooding Causing Permanent Damage A Taking?

Today, the Texas Supreme Court issued opinions in Severance v. Patterson, No. 09-0387, the case before the court on certified questions from the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit asked whether Texas recognizes a “rolling” beachfront access easement (a public easement on littoral property that moves with naturally caused changes in the vegetation line without proof of prescription, if Texas does recognize such an easement, what is its source (statute or common law), and would a landowner subject to this easement be able to obtain compensation under Texas procedures?  More on the case background here.

The Texas Supreme Court had issued opinions in 2010 affirming that no such “rolling easement” existed (opinions and briefs available here), only to grant the government’s motion for rehearing, apparently something you can do under Texas appellate procedure. So nearly a year ago, the Supreme Court…

Continue Reading Texas (Again) Affirms Property Rights: No “Rolling Easement” On Beaches

Here’s the BIO in in River Center LLC v. Dormitory Auth. of the State of New York, No. 11-922 (cert. petition filed Jan. 23, 2012), the case in which a Manhattan property owner and developer is challenging the compensation awarded by New York courts for a taking near Lincoln Center.

The Appellate Division denied the owner the right to present and have considered evidence about the valuation of the property because the court held that in order to be admissible, the property owner must be able to show the use it claims is the highest and best use is “established as reasonably probable and not a ‘speculative or hypothetical arrangement in the mind of the claimant,'” and that these plans will “come to fruition” in the near future.

The property owner, represented in the Supreme Court by Harvard lawprof Laurence Tribe, argues in its cert petition that the …

Continue Reading BIO In SCOTUS Just Compensation Case