Monthly Archives: September 2011

An Apology from One of the Justices Who Decided the Kelo Case

We are on the road at the moment, but the word is out that one of the Connecticut Supreme Court Justices has expressed a sort of, kind of, left-handed apology to Susette Kelo for the court’s decision in her case. So reports Jeff Benedict, author of the book Little Pink House, which is all about the Kelo case. You can find the details in our fellow blogger Robert Thomas’ blog, inversecondemnation.com which we recommend highly. The title tells it all: Too Soon Old and Too Late Smart: A Jurist Offers His Kelo Mea Culpa, September 18, 2011. For Jeff Benedict’s story on this subject, published in the Hartford Courant go to www.courant.com.

We won’t go through the details again here since you can get them with a click of your mouse. Suffice it to say that the “apology” boiled down to an assertion that if he had known then what he knows now — i.e., that the Fort Trumbull redevelopment project would be a total failure (as it has become) he would have voted the other way, thus bringing about the opposite result because of the close court split. Maybe that is his Lordship’s way of assuaging his feeling of guilt, but we have great difficulty buying it.

First, on general principles, if your faithful servant knew then what he knows now, he’d be as rich as Warren Buffet.  But he didn’t and he isn’t. Or, if grandma had wheels, she’d be a trolley car.

To get legal, the Connecticut Supreme Court (following the U.S. Supreme Court’s lead) held that whether or not a redevelopment project fails, or even whether it can succeed, is irrelevant as a matter of law. So if the court meant what it said in Kelo, then the project’s failure would be just as irrelevant as its success. That’s what  the word “irrelevant” means, doesn’t it?

So it sounds to us like his Lordship is trying to assuage his guilt feelings. Understandably so, because the Kelo case turned out to be a disaster — moral, economic, doctrinal and civic — so it is understandable that judges who decided it would feel bad about their handiwork. More than probably any other case, Kelo drove a wedge between the people and the courts, and elevated mistrust of government to unprecedented heights. Slice it any way you want, but taking a perfectly unoffending, unblighted lower middle class neighborhood in order to raze it and put up upscale condos and shops for well-paid employees of the Phizer pharmaceuticals company, in the hope that this would produce a trickle down effect even after the tax breaks that Pfizer got, and after diverting incremental tax revenues to paying off the municipal bonds that had to be issued to pay for this caper, was no “public use.” Saying otherwise was and remains an Orwellian perversion of the English language because every privately created project of this type (condos and malls) would — mirabile dictu! — become a “public use” which it plainly is not.

Legal bottom line: If his Lordship had known back in 2004 that the Fort Trumbull redevelopment project would be a failure, that would have been just as irrelevant by the court’s lights as the belief that it would be a success. What all that demonstrates is not so much that he was wrong, but that the judge-made law is wrong.

Environmental Laws in California

It isn’t every day that we find ourselves in agreement with someone who has  been a lifelong intellectual adversary, so when it happens it’s something to note. Robert Freilich is a Los Angeles land-use lawyer, who before coming west was a law professor at the University of Missouri in Kansas City. He and your faithful servant do not see eye to eye on most land-use controversies. We tend to take the side of beleaguered American property owners, whereas he is typically on the side of the government. We therefore found it remarkable that Professor Freilich delivered himself recently of a harsh judgment on California environmental laws. We have his permission to quote him, so here goes:

Many attorneys, planners, architects, engineers, scientists, developers,
small businesses, business  associations and governments in the state,
and many environmentalists are agreed that CEQA needs major reform.
Delays in the system are causing projects to suffer delays of 2 to 9
years to get EIRs approved, especially for (but not limited to) the
failure to compare the project with all “feasible” alternatives,
establish vague baseline analysis for existing mitigation, and the
tricky determination as to which parts of regional, general and
specific plan EIR findings can be incorporated, to eliminate
duplication of effort and cost.  The law is so confused on these points
that it is a miracle that any EIR can survive its first round in the
courts without a remand to do it over again. Complicating this result
is the establishment of a specialized group of attorneys that initiate
litigation at the drop of a hat, primarily because the statute
authorizes attorney’s fees for any remand or reversal.  Many community
associations and no growth environmentalists use the EIR litigation
process to delay and in many cases kill projects for little or no
environmental substance.”

We couldn’t have said it better ourselves.

More on That Proposed NFL Stadium in Downtown Los Angeles

We are pleased to report that the Los Angeles Times is, after all, not just a cheering squad for the new AEG proposal to build Farmers Field, a new NFL stadium in downtown L.A., and in the process to create a privileged group of developers of large projects that (when approved by the Governor), would be exempt from some of the environmental review burdens that other projects have to endure.

A column in today’s L.A. Times — Michael Hiltzik, California Special Exemption for NFL Stadium Plan Not So Special, L.A. Times, September 14, 2011, is sharply critical of such deals for the privileged folks, and reminds us that when the California legislature created an exemption from full environmental review for another proposed NFL stadium (that one in the City of Commerce) it promised — scout’s honor — that this would be the onliest such exemption. In reality, it only took a little over a year for the legislature to make a similar deal for Farmers Field in downtown Los Angeles, and then immediately before the end of the legislative session, to enact a law that would give the same deal to every large project in California.

For the full text of Hiltzik’s column click here.

U.S. Court of Appeals Strikes Down “Negro Removal” Redevelopment

There is a new decision by the U.S. Court of Appeals for the 3d Circuit, reversing a trial court’s grant of summary judgment against homeowners in Mt. Holly, who challeneged a redevelopment projects on the grounds that it was racially discriminatory because it targeted a predominantly minority neighborhoods whose inhabitants also argued that they were unable to obtain substitute housing with the compansation paid them by the township. The case is Mt. Holly Gardens v. Township of Mt. Holly, (3d Cir. 2011), Docket No. 11-1159, opinion filed September 13, 2011.

The court’s conclusion:

“The Township has broad discretion to implement the policies it believes will improve its residents’ quality of life. But that discretion is bounded by laws like the FHA and by the Constitution, which prevent policies that discriminate on the basis of race.”

We are all in favor of improving the quality of life, but we can’t help wondering what that has to do with eminent domain which is limited by the Constitution to land acquisitions for public use. The court properly held that the lower court’s use of a summary judgment procedure did not afford the owner-plaintiffs a fair opportunity to present their case of racial discrimination, and the court’s remand to the trial court for a trial on the merits seems  sensible.

 

Brooke Shields to Star as Susette Kelo In Upcoming Movie

We don’t usually concern ourselves with showbiz, but there are exceptions to everything, and to enlighten those of our readers who may still be ignorant of this revelation that has been reverberating across other blogs, a movie about the Kelo case is being made, based on Jeff Benedict’s book The Little Pink House. The book was a good read so the movie should be interesting. For further details, check out www.inversecondemnation.com. We also learned to our amazement from the Nossaman blog (click on that phrase in the right margin of this page) that there are several new movies (in production and completed) dealing with eminent domain abuses.

Now that we think about it, this may be important stuff because we live in a society that acquires most of its information from the screen, whether big or little. So let’s stay tuned and see what effect these movies will have.

Must We Obey Environmental Laws? Not If You Are a California Nabob

Like ’em or hate ’em, environmental laws have been the bane of California, causing unconscionable delays and wasting fortunes on litigation by assorted NIMBYs trying to frustrate perfectly innocuous projects, including needed housing  projects. Back in the 1970s, Professor Bernard Frieden, head of the MIT Planning Department, wrote an excellent book on that subject, entitled The Environmemntal Protection Hustle (MIT Press 1979) in which he demonstrated that environmental laws, particularly as applied in the land-use context, were being abused on a large scale for the benefit of wealthy, influential suburbanites rathyer than the environment. A major culprit is the California courts’ approach that favors broad standing in these cases, so that virtually anybody can sue to stop any project. As professor William Fischel, a noted Dartmouth College land economist, observed in his book Regulatory Takings: Law, Economics, and Politics (Harvard U. Press 1995), at p. 251:

“The California court changed the legal rules so that any number of parties could stop a given development up to the moment at which it was physically improved. The court thus created a commons in the right to exclude.”

So when it comes to building large projects, litigation over application of environmental law compliance can be protracted and costly.  But hey man, say the environmentalists, the environment must be protected for the sake of the children and the planet, and besides, like it or not, the law is the law, and we have to obey it lest we sink into a lawless abyss of environmental despoliation with greedy developers (is there another kind?) raping the earth, and reaping obscene profits. Right? Wrong. It turns out that it all depends on who you are, how big your project is, and how much political clout you wield.

When it comes to the construction of football stadiums, the latest wrinkle is for the legislature to grant the football nabob du jour special treatment that  minimizes the burdens of complying witth environmental laws. At the moment, AEG wants to build Farmers Field, a new football stadium in downtown Los Angeles (next to the Staples Center), even though there is no Los Angeles NFL team that would play there. As you can imagine, plopping down an NFL-style stadium smack-dab in the heart of downtown would be a gigantic undertaking because, among other things, it would require the demolition and reconstruction of that municipal white elephant known officially as the Los Angeles Conventional Center, that is currently running a municipal deficit of $30 to $40 million per year. So given these facts, this appears to be the sort of big, complex project that would normally attract environmental litigation like you-know-what attracts flies on a warm summer day. What to do?

The proposed solution has been a piece of legislation that would  short-circuit the judicial environmental review process and de facto reduce the courts to not much more than a rubber stamp. This legislative scheme would eliminate the right to litigate in the trial court altogether, and would limit judicial relief (if any) to a review proceeding directly in the Court of Appeal which would have a mere 175 days to complete the review. But review of what? Usually, an appellate court reviews the judgment of a trial court where admissible evidence was presented, the law was briefed, and a judicial decision was made. Thus, the trial court judge in such cases provides the parties with procedural due process of law by admitting documentary evidence, hearing sworn testimony and cross-examination of witnesses, and is in a position to make an informed judgment. Not so when the matter goes directly from a city hall administrative body to an appellate court which is not equipped to hear testimony and is unable to afford the parties the usual due process protection. All it can review is the administrative record of non-judicial proceedings in City Hall, which are not any kind of administrative adjudication before an administrative judge, but, to put it charitably, a free-for-all that rarely bears even a casual resemblance to due process of law.

And to stack the deck further, the proposed legislation would give the Court of Appeal a mere 175 days to complete review of a billion dollar project, even while deciding other cases in its usual case load. Does that sound like a thoughtful, prudent process to you? It sure doesn’t to us. But what do we know?

An insight into what’s afoot here is provided by the observation of Los Angeles Times Sacramento columnist George Skelton, who described the handling of that legislation as follows:

“The developer’s representatives spent weeks trying to negotiate a private backroom deal between competing interests. The plan was to jam through a bill at the last minute without public hearings, leaving little time for the generation of public opposition.” Geoge Skelton, Touchdown Is Within Reach, L.A. Times, September 8, 2011, at p. A2.

You get the picture, don’t you?

But that isn’t all. First, this deal is the second one like that. A similar bit of legislation was passed recently to grease the skids for another new football stadium in City of Commerce (located in the Los Angeles basin). So if all this stuff ever becomes reality, the Los Angeles area will have four — count ’em, four — major football stadiums — the Rose Bowl, the Coliseum, Farmers Field and the one in the  City of Commerce —  but no NFL football team. That may make sense to the folks in City Hall, but being a person of meager intellectual resources, your faithful servant has a problem or two wrapping his mind around this bit of lunacy. The theory is that Los Angeles will be able to lure the San Diego Chargers, which, should it come about, would leave San Diego with an unused stadium.

And that isn’t all. Mr. Skelton informs us further that this sort of stuff is so appealing to the Sacramento politicians that they are now contemplating legislation that would create a similar exemption from the usual environmental law constraints to “other large environmentally friendly,  job-creating developers.”  Under this scheme, “the Governor would decide which projects qualified for lawsuit expediting.” Oh goody!

Mr. Skelton apparently thinks this is just jim-dandy: “It’s a needed step toward refoming the cumbersome environmental quality act and erasing the perception that California is anti-business.” Lord knows that California enviropnmental laws could stand some pruning. But if relaxing environmemntal law constraints for the big boys is such a wonderful thing, then not why relax them for other, smaller but job-creating enterprises as well? After all, as we are endlessly told, it’s those smaller enterprises that collectively provide the bulk of new jobs. More important, do we live in a democracy, with equal protection of the laws for all, or is it a plutocracy in which there is one set of laws for the big boys, and another, more onerous set, for regular folks who build smaller job-creating projects and foolishly think that a few million dollars (that’s with an “m” rather than a “b”) is real money?

Don’t bother answering that question. It answers itself.

Follow up. The (Los Angeles) Daily News of September 10, 2011, reports — Dakota Smith, State Senate Gives Environmental Go-Ahead to AEG Football Stadium Downtown, Daily News, September 10, 2011, at p. 1 (click here) — that both bills referred to above were passd by the California State Senate. We learn from this article that the motivation behind this legislation is to frustrate litigation expected to be brought by Majestic Realty which is promoting that competing City of Industry football stadium. Surprise, surprise.

Environmentalists are divided. The Natural Resources Defense Council at first opposed this deal but was later born again. The Sierra Club remains agin’ it.

Second Follow up. If you want to see a classic instance of talking out of both sides of one’s mouth, don’t miss the L.A. Times editorial CEQA and the Art of the Deal, L.A. Times, September 12, 2011, at p. A16. As best we can figure it out, the Times thinks the new legislation is bad because it “would further politicize a process that is better handled outside the realm of special deals,” and “it’s bad policy to offer special treatment to certain projects; it raises questions of favoritism and and corruption.” It’s also good because “CEQA lawsuits are famously protracted,” and some have gone on for decades. So maybe curtailing them isn’t so bad. Who can tell? According to The Times it’s also good because we plumb can’t “allow procedure to to stand in the way of progress,” a bit reasoning that is known as the end justifying the means. So the best we can do is surmise that the Times editorial board is sort of for this Mickey Mouse legislation, but it thinks it should hold its collective nose in the process.

The Times’ solution is to kick the can down the road — it says that “It’s  time to get down to the important business of reviewing CEQA thorougly and carefully” for “all Californians,” not just for one developer at the time. You can get an idea of what a “thorough” and “careful” review of legislation can mean out here in la-la land, when you reflect on the fact that when in our field the California Law Revision Commission was directed by the legislature to study and revise the law of eminent domain, it took from 1952 to 1976 — four times as long as it took to fight an win WW II — to come up with a recommendation. And as the Times properly notes, litigation over the extension of the 170 Freeway through South Pasadena has been going on since 1973. So maybe it’s time to face reality, scrap CEQA and start over again to make it reasonable and mindful of this state’s wretched economic condition. Can that happen? We don’t think so, but as we are fond of saying, what do we know?

 

Redevelopment In India (Cont’d.)

For readers interested in the subject of eminent domain in India, there is an additional informative news item — an on-line interview with the Indian Rural Development Minister Jairam Ramesh; see Rupashree Nanda, Jairam Ramesh Calls New Land Bill “a Compromise,” ibnlive.in.com, September 10, 2011, click here. We learn from it that the proposed Indian legislation represents an overdue major break with that country’s prior eminent domain law, enacted  in 1894.

According to Minister Ramesh, the new legislation is candidly designed to protect the interest of small Indian farmers who have been bearing the brunt of the existing law, as noted in our post of a couple of days ago: Redevelopment in India – It’s the Same the Whole World Over, September 9, 2011 — click here.  It turns out that during the past 50 to 60 years some 50 million people have been displaced in India “on account of various development projects,” with some of them displaced more than once, and some who have not yet “received their R and R package” 40 years after the taking. R and R stands for “relief and rehabilitation,” which we surmise is their equivalent of what we call Relocation Assostance. Minister Ramesh opined that abuses of that kind are “one of the reasons for Naxalism in Central India.” Naxalism, it turns out, is a violent Maoist insurgency movement that has been a serious problem in Central India. We have not seen Naxalism covered in the American news media but you can check it out on Wikipedia.

In India, land may be taken by eminent domain for “industrialization and urbanization” and that combined with the rule over there that land taken for one  purpose may be used for another (where have we heard that one before?), and evidently prevailing undercompensation of displaced rural landowners, has resulted in takings of more land than is needed.

The proposed legislation provides for compensation at the rate of four times the “registered land price” (which we surmise is what we would call “assessed value”), with compensation payable not only to property owners, but also to “livelihood losers,” such as sharecroppers.

Eminent Domain Initiative Stays On the Ballot, Says Mississippi Supreme Court

The Houston Chronicle reports that by a 9 to 2 vote, the Mississippi Supreme Court ruled that an initiative that, if passed by the voters, would forbid eminent domain takings for “economic development,” will stay on the ballot as intended by its promoters, notably the Mississippi Farm Bureau Federation. Allies of Mississippi Governor Haley Barbour, have contended that under Mississippi law the state Bill of Rights may not be amended by initiative without legislative approval.

The court did not reach the merits of the contention that the eminent domain initiative (along with an initiative on abortion, which was also on the ballot) should be removed from the ballot. It ruled instead that to pass on the legality of the initiative now would be premature because it would amount to an impermissible advisory opinion. So the matter will have to await the next Mississippi election, and the issue of the initiative’s validity will become ripe for judicial review if and when it  passes and becomes law.

For the full story click here.

Redevelopment in India – It’s the Same the Whole World Over

Back in the old days, there used to be a vaudeville song that was sung in British music halls that went

It’s the same the whole world over/It’s the poor what gets the blame/while the rich gets all the pleasure/now ain’t that a blinkin’ shame.

We were reminded of it after reading a recent dispatch from India, (Jason Overdorf, India Proposes New Bill for Eminent Domain, Global Post, September 7, 2011 — click here). New legislation has been proposed in the Indian parliament, intended to improve the lot of Indian rural condemnees. According to the Times of India the proposed law requires that after transfer of the taken land by its developers within 10 years from the date of acquisition, the development company would have to pay the condemnees 20% of the land’s appreciated value. (Prabhakar Sinha, Builders Call Land Acquisition Bill Anti-Development, Times of India, September 7, 2011 — click here ). Interestingly, that approach is reminiscent of a point raised by Justice Kennedy during the Kelo oral argument, where he wondered if sharing the appreciated post-condemnation value with the condemnees might be desirable. Of course, Kelo involved only the right to take and did not deal with compensation so the point was academic. Still, it’s an intriguing idea.

Another provision in the proposed Indian law would require that 20% of the redeveloped land be reserved for its former owners as a form of their economic rehabilitation. India faces a special problem in that regard. Indian farmers tend to be very poor, their farms very small, and their families very large. As a result, the compensation they receive for their land is insufficient for replacement of the farm, and the displaced farmers lack modern skills that would enable them to find other employment.

As you can imagine, Indian redevelopers are up in arms and are strongly opposing the proposed law that at the moment is not going anywhere. However, the plight of rural condemnees in India is not something that can be ignored. As the Global Post reports, these rural condemnees have little power to fight back legally when their farms are taken, with the result that reactions to rural land takings are “one of the the most popular recruiting tools for Maoist rebels waging an insurgency across the tribal regions of central India.” So maybe the Maoist comrades are all for expropriating the property of others, but when it comes to their own land you better watch out.

That this can be serious stuff may be seen from the fact that Tata Motors, the Indian automobile manufacturting giant (that owns Jaguar) was forced to scrap its plans for land acquisition for a major new automobile factory, when they met with violent resistance in Singur, West Bengal.

High-Speed Rail (Cont’d.)

From time to time we have been taking note of the adventures and misadventures of the proposed high-speed rail line that when built (or perhaps more accurately, if built) would run between Los Angeles and San Francisco at three-figure speeds, but which for some strange reason is planned to begin construction in the proverbial middle of nowhere in California’s Central Valley, around Chowchilla and Bakersfield.

Now, we get the dispatch that life and the threadbare condition of Uncle Sam’s purse being what they are, prospects of a sizable federal contribution to the construction of that rail line, are growing dim and are casting a pall on the project. No wonder. The cost of that high-speed line was at first estimated at $43 billion, but according to “some estimates,” says the Los Angeles Times, that figure is more like $65 billion. According to the nonpartisan Office of the Legislative Analyst, says the Times, the cost could hit $67 billion. The State of California plans to contribute $9 billion in bonds, which makes its contribution 20% or 13%, depending on which cost estimate you believe. See Ralph Vartabedian, Deficit Could Derail Bullet Train, L.A. Times, September 8, 2011 — click here. So practically speaking, what it all boils down to is: no hefty Uncle Sam contribution — no high speed rail.

In the meantime, high-speed rail proponents are arguing in favor of acquiring the right-of-way and beginning construction, on the premise that somehow the funds will be found once the project is underway. In the old days, they might have said “The Lord will provide,” but these days we don’t expect them to say that, because though the Lord is demonstrably good at parting the sea, the record is sparse in the matter of the Lord building railways.

So even as Congress is looking at cutting the federal budget in general, and its transportation spending in particular, the Obama adminstration is talking in terms of an $8 billion increase in rail program funding. Will it happen?  It’s possible, but we wouldn’t bet on it.

We have no problem with railroad construction. We like railroads and your faithful servant uses them when appropriate. But as the Good Book says, for everything there is a season, and when Uncle Sam has his bonds downgraded and is staring at the possibility of default, that would not appear to be the prime season for gigabuck expenditures for high-speed railroad building in the boondocks of California.

So stay tuned, and see how it turns out.

Follow up. The House Appropriations Subcommitte on  Transportation, Housing and Urban Development slashed the proposed Federal Railroad Adminstration budget and in the process reduced Uncle Sam’s proposed $8 billion contribution to high-speed rail by a whopping $7 billion, leaving only $1 billion for existing operations. The full House Apprpopriation Committee is yet to approve this cut. Ralph Vartabedian, State High-Speed Rail Project Takes Financial Hit, L.A. Times. September 9, 2011.