Monthly Archives: September 2011

Redevelopment – It’s a Failure in France Too

By an odd coincidence, about a week or two ago we got to watch The Story of Sprawl, a series of eight segments on two DVDs distributed by the planning organization Planetizen, purporting to give the viewers “a unique look at the forces that created urban sprawl.”  In fact, they do nothing of the sort. They never mention any of the factors, both positive and negative, that inspired or drove urban populations out of older American cities into the suburbs. These DVDs mostly deal with ideologically inspired socialist architecture that created huge public housing projects which proved to be a failure. The Cabrini project in Chicago and Pruitt-Igoe in St. Louis, had to be demolished because with the passage of time they became unmanageable pits of drugs, crime and violence.

But guess what? We now get the same story from our cultural betters in la Belle France. The New York Times brings a similar dispatch from La Courneuve, a Paris suburb. Scott Sayare, Razing a Neighborhood And a Social Engineering Idea, N.Y. Times, September 7, 2011. For the whole story, including a pitcture of the demolition, click here. It turns out that over there, the French authorities are in the process of demolishing  Balzac, a 16-story high public housing project built in the 1960s amidst much hoopla, as the answer to low cost urban housing. Sound familiar? But what happened there is pretty much what happened here: the architectural vision may have looked pretty on paper but proved to be inept in execution and misguided in terms of accomplishing its stated purposes. It turns out that the Balzac housing project is the fifth or sixth such project to be demolished, starting in 2000.

The article is conspicuously silent on whether or not the decline of these public housing projects has had much to do with the changing urban French demographics, notably the influx of poor immigrants from Muslim countries, who have failed to assimilate into the French culture and who have been the source of ongoing violence in French cities.

An acute, if unintended insight into what’s going on over there is provided by the Times observation that whereas Debussy, the first such tower to be demolished back in 1986, was dynamited, now the Balzac is being demolished “by crane.” Why? “[B]ecause the police balked at the notion of bringing high explosives into the neighborhood. They feared they might be stolen.”

And so it goes in la Belle France.

The Public Reaction to Kelo Has Legs

The firestorm of public condemnation of the U.S. Supreme Court’s handiwork in Kelo v. New London, shows no sign of abating. The latest contribution to the public debate comes to us from the knowledgeable California law firm of Miller Starr & Regalia. See Ethan Friedman, Six Years of Separation: Life After Kelo. We suggest you read it. To get the full text click here.

Texas Justice — The Good Kind

You know you’re in for some fun when a bulky, 22-page appellate court opinion that just landed on your desk with a thud, begins as follows:

“The fight over [plaintiff’s] thwarted effort to drill for natural gas near Lake Houston is poised to mark its twentieth anniversary. This dispute encompases one drilling site, two trials, three trial courts, four appeals, and five Houston mayors.”

So spake the Texas Court of Appeals in City of Houston v. Maguire Oil Co. (Tex.App. 2011) 342 S.W.3d 726. To make a very long story very short, the city blundered. First, it issued a drilling permit to Maguire allowing him to drill for gas on land he leased near Lake Houston, and he began work. Then, the city decided that it shouldn’t have done it, so it summarily revoked Maguire’s permit. But the problem was that the city blundered again: the city ordinance on which its inspector relied did not apply to this situation, so the city’s cease and desist order was invalid.

Before we come to the happy ending, we must take you, dear reader, on a short tour of this litigation which exemplifies in spades the wisdom of the wit who observed that in order to prevail in a regulatory takings claim, the aggrieved property owner must be a determined fellow with the tenacity of a bulldog, the patience of a saint, a million-dollar litigation budget, and at least ten, or as it turned out in this case, twenty years.

When Maguire first sued, in state court like he was supposed to under the Williamson County case, the city removed it to federal court, where a jury ruled against Maguire. But the federal judge found that there were no federal issues left to be tried, so he remanded the case back to the state trial court, and  sanctioned the city in the amount $98,578.10 for improperly removing the case from state to federal court. But,  alas, the sanctions were overturned by a federal appellate court (143 F .3d 205). Back to state court which granted a summary judgment in the city’s favor. The state Court of Appeals reversed (69 S.W.3d 350). Back to the trial court again, which again dismissed Maguire’s case. The Texas Court of Appeals reversed again (243 S.W.3d 714). This time, the trial court got the message and permitted Maguire to try its case to a jury which awarded $2,000,000. The city appealed. Held: affirmed (342 S.W.3d 726).

If you are a lawyer (or just a person with an interest in the wacky law of inverse condemnation) we recommend you read this opinion in  its entirety because it is educational. In it the court provides an unusual example of judicial analysis in which it meticulously goes through the parties’ legal and factual arguments, and resolves tne issues arising from them, one by one. It’s a good read.

But though this saga appears to have a happy ending (though there may yet be another appeal, this time to the Texas Supreme Court) it provides an outstanding illustration of how out-and-out crazy the law of inverse condemnation has become. We lack the financial information at this time to make a valid  judgment, but it seems clear to us that it must have cost more — a lot more — than $2 million for two legal teams to try this matter in “two trials, three trial courts, [and] four appeals” (to say nothing of the administrative, pre-litigation proceedings) extending over a period of 20 years.

That the city was ultimately held accountable for its blunders in this case, does not change the fact that this sort of thing breeds disrespect for the courts, for the law and for the judicial process. Property owners deserve better than that when their constitutional rights are violated. It should not have to take an aggrieved person a third of his adult life to get a factually simple controversy like this one adjudicated. Judges who value their stature in society, should reflect on that long and hard.

Why California Is Screwed, Blued and Tattooed

Today’s Los Angeles Times runs a front-page story on a recent poll which shows that though Californians are overwhelmingly of the view that the country is on the wrong track, they don’t want to change their ways. Shane Goldmacher,  Poll Illustrates California Voters’ Anger, L.A. Times, September 5, 2011, at p. A1. For the full story click here.

The opening paragraph of that story says it all:

“California voters are increasingly downcast about the direction of the country,
but — like their leaders in Washington — many would rather adhere to party
orthodoxy than compromise to address the current economic problems, a new USC Dornsife/Los Angeles Times poll shows.”

In other words, out here in la-la land everybody wants to go to heaven, but nobody wants to die. How seemingly rational people facing imminent insolvency can insist on borrowing and spending more money as if nothing happened, is beyond ourr comprehension. But evidently, that’s the way it is out here. In the meantime, as of this morning, the stock market was down 250 points, and gold was up again.

Two Loud Cheers for the Texas Supreme Court for Saying “No!” to Private Condemnation

The news from Texas is that the state supreme court has ruled against Denbury Resources, a privately owned oil producer that sought to use eminent domain in order to take a right of way for a carbon dioxide pipeline. Denbury produces oil from wells in Texas but the carbon dioxide (used to pressurize underground oil deposits to aid in efficient oil extraction) comes from Louisiana.

In Texas,  pipelines have the power of eminent domain, when they are “common carriers,” meaning that their pipelines are available for use by others who want to use them to transport fluids or slurries to another location. So far, so good — that kind of  pipeline is sort of like a railroad: anybody can pay the tab and ship its freight.

But in this case, the pipeline, owned by Denbury, would not do that. It would only transport stuff owned by Denbury and transport it to oil wells also owned by Denbury. So how can Denbury be a “common carrier” and how can its use of the pipeline be “public,” asked the Texas Supreme Court. Good question. The short answer: If you want to wield the awesome power of eminent domain because you are a “common carrier,” you have to be one — i.e., there has to be some meaning to the word “common.” Here, there was none.

The Texas Supreme Court decision can be read as a simple case of statutory construction. The enabling statute grants the power of eminent domain to common carriers, so if you are not one of them, you don’t get the power, and courts are not required to assume otherwise just because the pipeline folks checked a box labelled “common carrier” on an application form used by the Texas Railroad Commission (which regulates such stuff). That seems simple enough. As the old, politically incorrect joke punchline used to put it: no tickee – no washee. But it really isn’t so simple because historically, going back at least to the 19th century, American courts have been most reluctant to actually examine the issues placed before them in right-to-take cases and have indulged in presumptions favorable to condemnors to an astonishing degree — i.e., the U.S. Supreme Court went so far at to assert that a condemnor’s decision to take private property is “well nigh conclusive,” without explaing why that is so.

Historians have shown that this judicial attitude arose in the railroad construction era (and even before then) because judges thought that development of the country was a good thing that should be encouraged. In theory, that may be OK, but their Lordships never explained, either then or now, why this pro-development policy should be pursued on the backs of innocent citizens who have the misfortune of winding up in the path of some public or not-so-public project, especially when its economic outcome promotes and enhances the economic wellbeing of the condemnor.

Moreover, it was one thing to embrace this approach when takings were few and took mostly narrow strips of vacant farm land for railroad rights of way. But it became an altogether different story in mid-twentieth century, when urban redevelopment takings became a process of mass displacement of urban dwellers from their homes and businesses by the hundreds of thousands per year. Judges tell us that they must be ever watchful in adjusting the common law to changing social conditions in society. So why not adhere to this salutary policy in the field of eminent domain?

If it’s a good thing to generate wealth — and it is — no rational or moral reason appears why the government should lend its sovereign power to A so he can forcibly take the land of B, and use it to make oodles of money, some of which presumably (at least in theory) will trickle down to the community at large, while B gets undercompensated in the name of “just” compensation.  It seems outrageous to us for the courts to formulate a rule of compensability whereby B’s business can be destroyed without compensation, while the prosperity of A’s business is enhanced in the process. To us it seems positively indecent to compel B to thus subsidize A without being indemnified for all economic losses caused by the taking. Whatever that may be, it is neither “public” use, nor “just” compensation.

The Texas Supreme Court’s decision, rare as it is, is an instance of a state court taking a real look at the exercise of the power of eminent domain and, instead of just rubber-stamping the condemnor’s plans, asking if the statutory words invoked by the would-be condemnor actually match reality. And that is not a bad thing. On the historical record, it seems justified to draw at least a tentative conclusion that some state court judges have reacted to the outrageous Kelo decision the same way as the great majority of the population — they concluded that Kelo smells to high heaven, particularly when one reflects on the fact that infliction of this outrage on the hapless condemnees turned out to be for nothing — the City of New London gave the Supreme Court a line of what turned out to be BS about its plans, namely, that the taking for the Fort Trumbull redevelopment project would work economic and social wonders for poor, needy New London, even as New London was getting a favorable rating on its general obligation bonds for its sound economy and tax revenue flow. And so, the Fort Trumbull redevelopment project wasted somewhere north of $100 million (a minimum of $80 million) with nothing, absolutely nothing to show for it.

So let’s have two cheers for the Texas Supreme Court. Why only two instead the traditional three? Answer: because that court is yet to drop the other shoe and bring some realism to its fomulation of what constitutes “just compensation.” After all, the constitutional framers must have had something in mind when they included that phrase in the text of the Fifth Amendment. So stay tuned on that one, but bring some snacks to nibble on as you wait — that may take a long time.