Nollan/Dolan | Exactions

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As we predicted, the Supreme Court today held that personal property — here, raisins — is property protected from uncompensated acquisition, and that the USDA’s New Deal regulations pursuant to which the Department fined the Hornes for not turning over to the government a massive percentage of their yearly crop without compensation, is a physical taking under Loretto. Horne v. Dep’t of Agriculture, No. 14-275 (June 22, 2015). 

Eight justices rejected the Ninth Circuit’s weird ruling that the regulations did not work a taking because raisins are personal property and not land, holding that “[t]he reserve requirement is a clear physical taking. Actual raisins are transferred from the growers to the Government.” Slip op. at 8. The Court cited [the] Magna Carta, noting it protected certain crops from appropriation:

The Takings Clause provides: “[N]or shall private property be taken for public use, without just compensation.” U. S.

Continue Reading Magna Raisins: 8-1 SCOTUS Says There’s A Taking, But Not All Agree On Remedy

This just crossed our desk in a case we’ve been following (link includes the numerous merits and amicus briefs filed in the case), the California Supreme Court’s opinion, authored by the Chief Justice in California Building Industry Ass’n v. City of San Jose, No. S212072 (June 15, 2015). 

The bottom line is the court agreed that rational basis review is the applicable standard:

As noted at the outset of this opinion, for many decades California statutes and judicial decisions have recognized the critical need for more affordable housing in this state. Over the years, a variety of means have been advanced and undertaken to address this challenging need. We emphasize that the legal question before our court in this case is not the wisdom or efficacy of the particular tool or method that the City of San Jose has adopted, but simply whether, as the Court of Appeal held…

Continue Reading Cal Supreme Court: Affordable Housing Exaction Subject Only To “Aliens Might Have Done It” Rational Basis Review

The Court of Federal Claims has issued its Opinion and Order in the AIG takings case, which we have been following. This is the case brought by “uberlawyer” David Boies. Background on the case, here, including pleadings, and audio of a talk we gave about the case to the ABA. At the early stages of this case, we characterized any claim for $25 billion, even when the plaintiff is represented by a top-shelf guy, as “audacious.”  

Bottom line: the feds treated AIG badly, very badly. But the measure of liability in a takings case isn’t based on bad treatment generally, but on bad treatment economically. And in that arena, “twenty percent of something [is] better than 100 percent of nothing.” 

We’ll have more after we’ve had a chance to review the 75-page single-spaced opinion, so complex it needed to have a dramatis personae appended (pages…

Continue Reading Audacity Ain’t Enough For The CFC: Gov’t Behaved Badly, But AIG Bailout No Taking Because No Damage

Pic_shot_1429716535697

            “It’s Frank’s world, we just live in it.”

                      – attributed to Dean Martin, about Frank Sinatra

A narrowly drawn opinion from the Supreme Court in Horne v. Dep’t of Agriculture, No. 14-275, argued in April and to be decided by the Court sometime before the Term ends this month, could attract more than the needed five Justices to form a bare majority, and the initial reports from the arguments agree that the Hornes’ takings argument appeared to gain traction with at least a couple of Justices from the Court’s left bloc. Combined with the property-friendly Justices and Justice Kennedy (who appeared to view the government’s arguments with great skepticism), they could put the Hornes well over the top. 

There may be much more at stake, however, if any part of the government’s…

Continue Reading Leviathan Shrugged: Oral Arguments In Horne Reveals The Taking, But Remedy Still Open

The powers-that-be planned on building a major freeway interchange, part of which was going to be on the property owned by Jefferson Street Ventures. Problem was, Jefferson Street also had plans for its property — a shopping center — and when it came time for it to apply to the City of Indio for permits to build, the city said yes, but only if Jefferson Street left open and didn’t build on the 11 acres on which the interchange was envisioned.

We’re going to buy it eventually said the city, but the complex federal and state process for studying, evaluating, and funding the project takes a long time, and if you build on it now, it’s going to cost us more in the future to take the developed property and relocate all of the tenants.

In Jefferson Street Ventures, LLC v. City of Indio, No. G049899 (filed Apr. 21…

Continue Reading Cal App: “Temporary No-Build Area” While City (Maybe) Gets Around To Condemnation Is A Taking

While we put the finishing touches on our full write-up of last week’s oral arguments in Horne v. U.S.D.A., No. 14-275 (we posted our initial thoughts after attending the Court’s session here), here are other summaries of the arguments:

  • “Supreme Court justices appear ready to rule against California raisin board” from the Los Angeles Times, isn’t a purely objective view of the case, and the “meta-message” (the Hornes are ingrates for challenging a program that benefits them) comes through loud and clear. The report also misunderstands the relief which the Hornes seek: “While it appeared clear a majority will side with Horne, it is not clear what this means for other farm products, or even what compensation he is due.” We hope this misconception doesn’t carry over to the Justices, since the Hornes are not seeking just compensation in this action, and only argue that

…
Continue Reading Horne Oral Argument Round-Up

On Wednesday, April 22, 2015, the Supreme Court will hear oral arguments in Horne v. U.S.D.A., No. 14-275, the second time this case has been to the Court. 

The first time around, the unanimous Court held that the Hornes could raise the Takings clause as a defense to the USDA’s action to enforce a regulatory scheme that Justice Kagan characterized as perhaps “the world’s most outdated law,” and which was derided by Justice Scalia as “a crazy statute.”

The Court remanded the case to the Ninth Circuit, which, to no one’s real surprise, held that the scheme was not a taking. The Court again granted cert to consider these Questions Presented:

  1. Does the government’s “categorical duty” under the Fifth Amendment to pay just compensation when it “physically takes possession of an interest in property,” Arkansas Game & Fish Comm’n v. United States, 133 S. Ct. 511, 518 (2012),

…
Continue Reading Raisin Takings Case Round II: Oral Argument Preview

In 2011, Missouri adopted a statute that looks to us like a slightly modified “right to farm” law:

The statute supplants the common law of private nuisance in actions in which the “alleged nuisance emanates from property primarily used for crop or animal production purposes.” Unlike a common law private nuisance action, section 537.296 precludes recovery of non-economic damages for items such as loss of use and enjoyment, inconvenience, or discomfort caused by the nuisance. Instead, the statute only authorizes the recovery of economic damages in the form of diminution in the market value of the affected property as well as documented medical costs caused by the nuisance.

Under Missouri common law, nuisance claims arising from farming activities are considered temporary nuisances. A few days after the statute went live in 2011, Bohr Farms fired up what is known in the business as a “CAFO” (Concentrated Animal…

Continue Reading Missouri: Statute Which Supplants Common Law Farm Nuisance Claim Is Not A Taking

Last week, the California Supreme Court heard oral arguments in California Building Industry Assn. v. City of San Jose, No. S212072, the case which challenges San Jose’s “inclusionary housing” requirement.

The Court of Appeal held that under rational basis review (and not heightend scrutiny) San Jose’s affordable housing exaction might survive because it was designed to promote the development of affordable housing, and not to mitigate the impacts of market priced housing. California Building Industry Ass’n v. City of San Jose, 216 Cal.App.4th 137 (6th District June 6, 2013). The California Supreme Court agreed to hear the following issues:

What standard of judicial review applies to a facial constitutional challenge to inclusionary housing ordinances that re quire set asides or in – lieu fees as a condition of approving a development permit? (See San Remo Hotel L.P. v. City & County of San Francisco (2002) 27 Cal.4th 643…

Continue Reading California Supreme Court Considering “Inclusionary Housing” Fee

In AFT Michigan v. State of Michigan, No. 148748 (Apr. 8, 2015), the Michigan Supreme Court upheld a state statute which mandated a 3% reduction in public school employees’ salaries (to fund a failing school employee retiree health care system), and concluded it was not a taking because it was a voluntary giving by the employees. They were not required after all, to provide the 3% contribution, and could avoid the reduction and maintain their present salary levels by opting out of their own publicly-funded retirement health care.

There’s a lot more to the statute and the unanimous opinion of course — including a rejection of a Contracts Clause claim — but the heart of the takings analysis starts on page 21:

Voluntary healthcare contributions do not violate Const 1963, art 10, § 2 and US Const, Ams V and XIV because, as a general proposition, the government does…

Continue Reading Michigan: Voluntary “Giving” By Public School Employees To Fund Failing Retiree Health Benefits Is Not A Taking