Monthly Archives: July 2013

When Must the Condemnor Take the Whole Parcel, Even Though it Wants to Take Only a Part of It?

Word reaches us from Wisconsin that that state’s Supreme Court has handed down an opinion explaining the circumstances under which a condemnor must take the entire parcel even though it only seeks to take a part of it (an easement in this case) because a taking of only the part would leave the owner with a piece of remaining land that is in an uneconomic condition, and the local statute provides that the cost of that should fall on the condemnor, not the owner. This is the third appeal in this case, and as you can imagine, the facts are pretty complex. So we won’t go through the whole megillah in anything resembling detail. But the court’s bottom line is clear: the condemnor — in this case a public utility seeking to take an easement — must take the entire larger parcel and pay for it when the owner so wishes and in the after condition the property, if subjected only to a partial taking, would wind up in an uneconomic condition.

The case is Waller v. American Transmission Co., opinion filed on July 16, 2013, consolidated cases No. 2012AP805 & 2012AP840. To get the opinion, click here http://www.wicourts.gov/sc/opinion/DisplayDocument.html?content=html&seqNo=99492

Bottom line: on the condemnor’s initial offer of $49,000 (upped later by degrees to $99,500) the jury awarded $94,000 for the taking of the easements, to which the court added $47,509.72 to allow for the acquisition of the entire larger parcel, plus another $211,261.74 in litigation expenses.

Two Justices dissented, devoting a good part of their arguments to lamentations that the majority’s holding would be expensive. Check it out.

We note that this is not an easy opinion to read, and is one that could have benefitted greatly by the court’s use of tables. But life being what it is, the court didn’t do that, so the poor reader of the opinion has to pore through it laboriously to make out what’s what, which in the case of an opinion that  unravels three — count ’em, three — appeals in a litigation that goes back to 2007, that isn’t easy. But if you are interested in this rarely litigated aspect of relocation assistance law, we suggest you go for it.

Yet Another Redevelopment Disaster — New York

Ellenville, NY, is a village in the former borscht belt, with a population of 4135 according to Wikipedia, and is located 90 miles north of New York City. It was once prosperous but fell on bad times as local industry closed. That being the case, what does a self-respecting American small town do? How silly of you to ask. It initiates a redevelopment project. But — surprise, surprise — it didn’t work out. According to the New York Times Magazine (Adam Davidson, The Least-Bad Bet, July 14, 2013, at p. 17),  in the aftermath of its redevelopment project Ellenville’s  Canal Street “is littered with abandoned storefronts. One block over, about all the shops were torn down in a federal urban renewal project. And because nothing ever replaced them all you see are a lot of empty parking lots without much worth visiting.” Oh dear.

So what is the city doing now? It says it will build a casino; that’s what. Evidently, Detroit’s similar activity did not teach those folks the proper lesson.

So will it work? Will it bootstrap Ellenville into prosperity? Who knows? We certainly claim no mavenhood in casino marketing and operations, but it strikes us that people who can drive down from the New York area to Atlantic City where they can enjoy the beach, the  ocean, and the boardwalk, as well as a selection of fancy hotels, providing fine dining and all those gaming tables, are unlikely to drive a hundred or so miles in the opposite direction just to enjoy the fleshpots of Ellenville. But what do we know? It says here that the Ellenville casino will be operational in 2016, so we better wait until then. Keep an eye out folks.

And by the way, Atlantic City has been losing money on its gambling venture and is dipping into public funds. And apart from the few fancy hotels, the rest of the place isn’t doing well.

Oh, yes. We almost forgot. Neither this New York Times Magazine article, nor some others we perused, informs us what this caper is going to cost and who will pay for it. Taxpayers, hang on to your wallets and stand by!

Another Kelo-type Failure in the Making In D.C.?

Don’t look now, folks, but it looks like the “new” redevelopment project in D.C., the one that has been in the works longer than the duration of World War II, and that has that wiped out a slew of local businesses in Skyland, an existing older shopping center, in order to produce a new, new, improved shopping center, is on the verge of  going down the tubes. To get some of the details check out our fellow blogmeister, Robert Thomas’ post of July 13, 2013, If This Wasn’t So Depressing (and Predictable), It Might Be Funny. Check out www.inversecondemnation.com For you pedantic types, it cites all those Skyland-related cases, so if you want to read up on it, and are into depressing judicial prose, here is your opportunity to indulge your thing.

Short version: After the condemnation and destruction of the old Skyland shopping center, Walmart was going to build a major new store on the site, but evidently yielding to union demands, the D.C. city council is on the verge of enacting (or perhaps has already enacted) a “living wage” ordinance calling for higher wages that Walmart is willing to pay. So it looks like Walmart may call the whole thing off, leaving the city holding the bag.  Walmart is not the kind of outfit that is easily pushed around by a pissant city council, so if it sticks to its guns and bails, this caper will have destroyed a functioning shopping center that provided goods and services to the local community, and instead will produce another urban wasteland. What else is new?

So keep your eye on this one folks.

Afterthought. For a copy of the Washington Post article covering this story, click here

We also learn that a few years ago, it was all the rage to publicize the supposed “fact,” if that is what it was, that Target, not Walmart, that was hotsy totsy, hot to trot to redevelop Skyland. But alas, nothing came of it. Click here for Washington Business Journal coverage of the 2005 events indicating that Target was in the saddle. But evidently, it isn’t. Target has made clear where they stand, or more accurately, where they don’t stand on this project. In the meantime we read that the District of Columbia is out $38,000,000 on this caper, evidently with nothing to show for it.

As we are fond of concluding: your tax money at work.

Follow up. Today, on July 17, 2013, the PBS Newshour had a segment on this controversy, and reported that the D.C. City Council did pass that ordinance, but so far at least, Walmart was hanging tough. Also, it turns out that what is at stake is not one Walmart store in D.C., but three. So the stakes have gone up considerably. Stay tuned.

Posner to SCOTUS: Cut the Bullshit

We recommend a recent article in the on-line publication Law360, Brian Mahoney,  Posner Says Justices Should Cut BS From Opinions, July 10, 2013, reporting Judge Posner’s blunt and candid assessment of recent SCOTUS opinions as unnecessarily long, verbose and unclear. We hope you read it, but such criticism is hardly news, although as far as we know, until now no one of Judge Posner’s stature has accused the Magnificent Nine of producing “bullshit” —  in haec verba — in the pages of a law journal.* Click here.

Nonetheless, even without using this bit of invective, SCOTUS has been the subject of scathing, and deserved criticism before. We commend to your attention an article by the late Professor Paul Bator, entitled  What Is Wrong With the Supreme Court? 51 U. Pitt. L. Rev. 673 (1990). A good read, that.

Although the late Professor Bator, a Harvard and University of Chicago law prof, was fully credentialed to write on this subject, this article has a special, noteworthy feature. Professor Bator died before completing it, and it was finished by Prof. Charles Fried of Harvard, former U.S. Solicitor General and Justice of the Massachusetts Supreme Court.

Professor Bator’s enduring point was that SCOTUS should  be less solicitous of government arguments and should be producing a “product” for the consumers of its output; i.e., opinions that are understandable and capable of ready application by lawyers and busy trial judges. But the court often doesn’t do that, and — since this blog is primarily about eminent domain and inverse condemnation — that field of law is a proverbial “Exhibit A” for what’s wrong. When SCOTUS proclaims itself  to be simply unable to state what constitutes a cause of action in inverse condemnation, and tells us that it decides that on an ad hoc factual basis in each case (as it confessed in the Penn Central case), that is but another way of saying that though it demands of lawyers that they draft doctrinally meritorious pleadings, it is “simply unable” to say what those pleadings should contain.

As Professor Bator put it, “. . . all too often, when the Supreme Court decides a case, instability, uncertainty and confusion are not alleviated, but rather reinforced.” Id. at 686.

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*    If you are interested in a Princeton scholar’s reflections on the proper use of the word “bullshit,” check out the book by Prof. Harry G. Frankfurt, entitled On Bullshit. Last time we looked, it was available on Amazon.

 

 

The Great CLE Aftermath of the SCOTUS 2013 “Hat Trick”

If you follow this stuff, you must know already that there is coming upon us a tide of CLE programs about Koontz, what it says, what it means and what it portends for the future. We are sitting this one out because, truth to tell, with the exception of our usual gig (the ALI-CLE programs on eminent domain and Land Use) nobody has asked us to give it a shot — which may be a good thing because much of what we have to say about the government conduct that led to these decisions may be what in the old days was referred to as “unprintable.”

On a vaguely related subject, we need to mention that CBS News had a pretty good segment last night on the New Jersey Supreme Court’s Harvey Cedars case, on which we posted a couple of days ago. Actually we saw it around 3:00 AM (which will give you a clue to how important a story CBS thinks it is). So technically, it should be counted as running today. It wasn’t bad and it contained a lot of good pictures of the subject property. We think it is worth seeing if only for that reason. If you can find it, we recommend that you do see it.

Moving right along, the tidelet of CLE programs on Koontz et al. is about to inundate the CLE market, with the usual suspects pro and con, taking sides on the profound moral question of whether kleptocracy — whether involving government theft of raisins, coin of the realm, houseboats, or $10 million worth of standing timber* — is a permissibly constitutional mode of governance. Doesn’t seem like much of a stretch to us to conclude that permitting such government conduct was not what the Founding Fathers had in mind when they forbade uncompensated takings in the Fifth Amendment. After all, their main complaint that led to the American revolution was that his Brittanic Majesty and his royal minions were sticking their hands too deeply into the American colonists’ pockets.

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*  Note that each of these cases — Horne (raisisns), Lozman (a houseboat), Koontz (money), and acres of standing timber (Arkansas Fish & Game Commission)  involved physical takings, which goes to show you the level of chutzpa of the government, being as physical takings are deemed takings per se like it says in the Teleprompter Manhattan case.

 

“A Splashy Party Costing $5 Million”?

Those fun-loving Caltrans folks sure know how to party. Today’s Los Angeles Times brings the dispatch that “[t]he much-delayed and over-budget eastern  span of the San-Francisco-Oakland Bay Bridge will not open as scheduled on Labor Day weekend, transportation officials  announced Monday, eliciting disappointment but little surprise in a region dependent on the soaring structure.” Maria L. La Ganga and Patrick McGrevy, Another Delay for Bay Bridge, L.A. Times, July 9, 2013, at p. AA1. So far, no surprises. It is common that major public projects fail to be completed on time, on spec and on budget.

It appears that in this case, 32 gigantic bolts holding the structure together had fractured and will need replacement at a cost estimated to be $15 million before the new bridge can become fully operational. Plus, there will be a delay of some three months in the  completion of the new bridge.

So what’s this about a party? It seems that the folks in charge of planning this project were planning on throwing a $5 million party to celebrate the bridge opening, “possibly including a bridge walk, a bike ride and a recreational run.”

As we are fond of reminding our readers every chance we get, for this they got money — millions to be exact. For fully compensating landowners whose property they take by eminent domain, thereby inflicting incontestable economic damages on them, they ain’t got money. In fact, the California Supreme Court has been known to assert that if condemnees were to be fully compensated for all damages inflicted on them when their land is taken, “an embargo” — yessir, an embargo — on construction of public works in California would have to be imposed.

Ah, but there seems to be a redeeming factor to all this: those public project builders sure know how to party with your money, don’t they?

New Jersey Supreme Court Obliterates the Distinction Between Special and General Benefits, and Allows the Offset of the Latter Against Just Compensation for a Partial Taking

Word has just reached us that The New Jersey Supreme Court has decided to follow the lead of California, and reversed the Appellate Division’s decision in in the Harvey Cedars v. Karan case.

It has held that where  a partial taking for a beach replenishment project diminished the value of the remainder of the subject property, but simultaneously increased its value because the replenishment would make the subject land less vulnerable to high tides, the added fair market value of the remainder could be considered in offset against the decrease in fair market value caused  by the condemnor’s destruction of the owner’s view, without regard whether such an increase would be classified as a special or general benefit under prior law.

For the New Jersey Supreme Court opinion click here  http://www.judiciary.state.nj.us/opinions/supreme/A12011HarveyCedarsvKaran.pdf

Update. For the New York Times writeup of this case, see Kate Zernike, Court Sides With Town on Price of Views Lost to Dune, N.Y. Times, July 9, 2013 — click here

Lowball Watch — North Carolina

News reaches us from the Charlotte area of North Carolina that an eminent domain case pending in Mecklenburg County, and  involving a partial taking of some 25% of the improvements of a shopping center, just settled (two weeks before trial) for $22,500,000. Dept. of Transportation v. Independence Shopping Center. The condemnor’s offer was $16,864,000, so the settlement amount represents an increase of $5,636,000, or one-third over the condemnor’s offer.

We are told that this settlement is the largest one in the history of North Carolina.

We just got only the essential news, so we are in no position to provide any details as to what issues divided the parties, but we hope to provide those as we get them.

What is remarkable about this case (and others like it that settle for large sums over the condemnor’s offer) is that the condemnor settled instead of fighting to the bitter end, which is a sort of an admission on its part that it was trying to lowball the property owner.

 

Detroit Down the Tubes

The latest from the Economist magazine: Saving Detroit: Iron Orr. The city’s default spells pain for creditors, employees and residents, The Economist , June 22nd, 2013.|

The receiver for the City of Detroit has proposed a method of dealing with the city’s insolvency whereby  bond holders and prospective pension recipients are to be treated alike, and both would take a substantial haircut. We claim no expertise in such matters, but evidently treating these two classes of debtors alike is unprecedented, and has produced a big to-do. Check it out.

Afterthought: If you want some perspective on the calamity that befell Detroit (and other American cities) check out the cover story in TIME magazine of Nov. 6, 1964, entitled Under the Knife, or All for Their Own Good, Vol. 84, No. 19, at p. 60, enthusiastically endorsing urban redevelopment (w2hich would fix everything), and compare the cover story Notown in TIME, October 5, 2009,  depicting and describing what Detroit really looks like after four decades of condemn-and-bulldoze version of redevelopment, and proposing a future for what is left of that city based on — what else? — renewable energy.

This isn’t news, but if you want to see what Detroit really looks like and what the receiver has to contend with, click here