Monthly Archives: October 2013

Lowball Watch – Tennessee

Another biggie down the tubes. This one for the Nashville Development Authority. This was what The Tennessean newspaper characterized as “[a] bitterly contentious four-year dispute over the fair value of land Metro took to build the new convention center. . .”  It’s quite a saga. Nate Rau, Tower  Investments Wins Eminent Domain Dispute With MDHA Over Music City Center Land, The Tennessean, October 17, 2013.

It looked at first that MDHA was ahead when a “jury of view” (what most other states that use that system call “commissioners”) awarded $16.5 million, close to the $14.8 million deposited by MDHA. When the owners sought review of that award by a trial court, a funny thing happened: the case was assigned to a court department to which all — get that? all — eminent domain cases involving MDHA had been assigned, whereas eminent domain cases involving other agencies were randomly assigned to other departments.  And that wasn’t all. It turned out that the judge’s daughter was a partner in the law firm that was hired to represent MDHA.  At this point the judge recused herself and the case was randomly assigned to another judge who presided over a trial by jury which awarded the owners $30.4 million. That was in 2011, and that was when the appeal process started. But MDHA did not fare well on appeal.

Long story short, the intermediate appellate court affirmed that $30.4 million award, and the Tennessee Supreme court denied review, thus ending the case. Also, interest on the increase in the award (over and above the $14.5  million offer that had been deposited), kept on accruing during the appeal, and now comes to some $3.6 million.

The bone of contention was the fact that the owners bought their property (then a parking lot) for $14.6 million in 2007. But the owners contended that  they bought the land in order to develop it and its value, considering its highest and best use, was much higher than its purchase price.

Afterthought: How the hell does a parking lot get to be worth even $16 million? Possible answer: could it be that its location benefits from traffic coming into the city, leaving the drivers and passengers as captive customers who have to park somewhere near their downtown destination after they navigate freeways into the city? The freeways get you to your destination, but then what? During our practice days we were often struck by aerial photographs depicting large amounts of  “vacant” land used for parking in city centers. Which — it seems to us — is clearly an effect of freeways, anticipated by planners but not by the general public, and a way in which freeways shape cities, even though that is not usually discussed during the freeway planning stage. The planners will dwell on how the new freeway will get you efficiently from here to there, but we have never heard a discussion of how that will cost you $X bucks per hour  while you work, shop, or otherwise remain in the city.

 

California Housing — Here We Go Again

The latest dispatches from around here (the Los Angeles area) indicate that homes are getting close to bubble levels, Being a believer in the adage that one picture is worth a thousand words, here is a photo of a Los Angeles area house featured for a mere $264,000 in today’s Los Angeles Times. Andrew Khouri, Middle-Class Homes? L.A. Times, Oct. 11, 2013, at p B1.

A single-family home at 12125 S. Vermont Avenue in Los Angeles lists for $264,500. The home is 1,038 square feet and has three bedrooms and two baths.

 

And here is a picture of a $135,000  home pulled at random from home ads in the Charlotte, N.C. area. Need we say more?

4003 Linsbury Court, Charlotte NC

                

  

 

 

 

Lowball Watch — New Hampshire

Seacoastonline. com brings the dispatch that the New Hampshire Supreme Court has affirmed without oral arguments a  Rockingham County jury award of $130,000 to the owners of a bicycle shop named “Papa Wheelies,” as against the condemnor/city’s contention that it should have been $18,500. Why the big spread? As far as we can figure out from the newspaper report, the lower figure was in line with evidence of value the State Board of Tax Appeals used to value the subject property for tax purposes. See Elizabeth Dinah, Supreme Court Upholds $130 K Award for Papa Wheelies, Seacoastonline.com, October 9, 2013 — click here.

This is a problem on which the courts are split. Some allow evidence of tax valuation when the tax valuation figure was contended for by the owner, and its admission into evidence can be justified as an admission against interest. Others disagree because the purpose of valuation in these two types of cases is very different. It is proper (and indeed required in some states) that the fair market value awarded in eminent domain must be the highest price the owner could obtain in the market in a voluntary, arm’s length transaction. On the other hand, in valuation for tax purposes, the owner is free to contend for the lowest justifiable value — there is nothing wrong with that. After all, remember that value is a matter of opinion, not fact. Also, in tax valuation, if the valuers get it wrong, the property can be reassessed, whereas in eminent domain the judgment is final and there is no going back to redo it (unless there has been a prejudicial error of law) which is another story.

The taking in the Papa Wheelies case was of two temporary easements for new water and sewer lines, plus a permanent easement for two sewer lines.

Hee-Haw at SCOTUS

We don’t want you to miss the really important news from on high. We congratulate the New York Times and its Supreme Court reporter Adam Liptak for finding room during this week of Supreme Court opinions coming down like rain, for making sure that we know how many times the audience laughed during the oral arguments in the Obamacare case. Adam Liptak, Reviewing the Health Care Arguments, Laugh Count Included, N.Y. Times, June 26, 2012, at p. A14. In case you keep track of such stuff, it was “an exceptionally garrulous and jocular bench.” Hee haw!

Justice Breyer walked off with the honors as Chief Blabbermouth, with a half-hour of speechifyin’ followed closely by Justice Sotomayor, the “Wise Latina,” who demonstrated gender equality by coming in second, “just 30 seconds shy of half-hour.” Altogether, the Justices spoke for a total of 162 minutes (that’s 2.7 hours) or 43 percent of the time. Yikes! Think about it: Their Lordships took up close to half the time consumed by all the lawyers put together. Their expostulations thus come to an average of 20.25 minutes per Justice (Justice Thomas, as usual, sensibly kept quiet, relying as ultimately they all do, on the briefing). That comes to 68% of the time usually allocated to each side’s lawyer doing the arguing.

As for the hee-haw part, “[t]here were 63 episodes of public laughter, or about 10 laughs per hour” (or, if arithmetic is your thing, one every six minutes.

The champion victim of all that was Solicitor General Donald G. Verilli, Jr., who was interrupted by the Justices 180 times, or on average every 22 seconds. He was interrupted after speaking for 10 or fewer seconds more than 40 percent of the time.  Reminds us of the frustrated, apocryphal appellate lawyer who, after being verbally pummeled from on high, concluded his presentation by saying, “I submit the matter on the argument of the court.”

Having been an active appellate lawyer for some 40 years, give or take, your faithful servant can’t help wondering what the Justices thought they were accomplishing. No one can rationally accuse us of being overly sympathetic to government lawyers who in our experience are coddled by judges and as a result tend to be arrogant, and think they can get  away with anything. Check out our piece in the Los Angeles Daily Journal of March 13, 2012, entitled Prosecutorial Misconduct Matters Only For Certain Cases, and see 6 Loyola L.A. L. Rev.  447 (1972). But even so, they are advocates representing clients whose position they should be able to articulate without being constantly hectored from the bench. What good do the Justices think is to be derived from not allowing the lawyer on the short end of a controversy from expressing whatever he has to say on behalf of his client? There are lots of ways for judges to chastize a lawyer’s performance without public bullying that interferes with the lawyer’s presentation, particularly when their target is  forbidden to respond in kind, no matter how deserved an acerbic response might be.

Apart from earning our daily bread in the appellate courts for decades, we also taught advanced appellate advocacy at a law school with a reputation for producing graduates able to hit the ground running, and assume the role of effective courtroom advocates from the git-go. And we always counseled the tads not to try to be funny before appellate courts. There is nothing more professionally pathetic that lawyers who think they are uttering a funny in a courtroom, but nobody laughs. As the late, lamented California Supreme Court Justice Otto M. Kaus wisely counseled, there is a division of labor involved here: “We tell the jokes,” said Kaus, “you laugh.”

In our 40+ years of appellate arguments, we made two — count ’em, two — jokes in oral aruments, both before the California Supreme Court. One in a case that couldn’t possibly be lost (yes, Virginia, incredible as it may sound, there are a few such cases), and the other in a case that couldn’t possibly be won (and there are plenty of those, especially if you practice eminent domain law on behalf of property owners). Their Lordships chuckled appreciatively both times, but the results were predictable — the winning case won, and the losing case lost. And therein lies the moral of this story.

California Without the Rose-Colored Glasses

We just came across an article by Joel Kotkin, entitled California’s New Feudalism Benefits a Few at the Expense of the Multitude, New Geography, Oct. 9, 2013 — click here — and we recommend it for its cold look at the once Golden State, without all the traditional foo-foo of the movies, beaches, mountains and Silicon Valley Mountaineers, if you get the idea. Kotkin points out — correctly in our opinion — that there are two Californias: the coastal/silicon valley part, and the inland, not-so-hot part that is studded with high unemployment areas. Certainly, California housing draws a sharp distinction between the very rich and not-so-rich on the one side of the divide, and the merely prosperous and middle class folk on the other. The latter have to spend a disproportionate part of their incomes on housing (actually, they all do, except that the biggies can afford it). What this article discloses is that it is those on the lower end of the economic scale who are leaving the state because California housing consumes an excessive part of their incomes. Again.

So while California Numero Uno is the one that dazzles the visitors with nouveau rich billionaires, movie stars, futuristic computers and Porsche Carreras, California Numero Dos is increasingly home to the impecunious peasantry who work at clerical jobs, flip hamburgers and clean other people’s casas.

“Once   you get outside the Bay Area, unemployment in many of the state’s largest counties—Sacramento, Los Angeles, Riverside, San Bernardino,   Fresno, and Oakland—soars into the double digits. Indeed, among the 20 American cities with the highest unemployment rates, a remarkable 11 are in California, led by Merced’s mind-boggling 22 percent rate.

“This amounts to what conservative commentator Victor Davis Hanson has labeled “liberal apartheid,” a sharp divide between a well-heeled,  mostly white and Asian population located along the California coast, and a largely poor, heavily Latino working class in the interior. But   the class divide is also evident within  the large metro areas, despite   their huge concentrations of affluent individuals. Los Angeles, for example, has the third highest rate of inequality of the nation’s 51 largest metropolitan areas, and the Bay Area ranks seventh.”

 

Hee-Haw at SCOTUS Revisited — Not What You Think.

A while back we had a post dealing with humor at the Supreme Court during oral arguments.  It was a subject that caught our attention, and it appears that it caught the attention of others because we now learn that there has been  — what else? — a study of judicial expressions and the frequency of laughter during oral arguments “up there.” See Adam Liptak, A Most Inquisitive Court? No Argument There, October 8, 2013, at p. A14. Click here to get the numbers on who out-talked and out-hee-hawed whom — something that may be of interest to true SCOTUS freaks, but something that paints an unflattering image of the court.

The problem is that in some ways oral argument is sort of like the human vermiform appendix: It’s part of the human body but serves no discernible function. As the Justices tell us in moments of candor, oral argument performs a similar non-function. Cases are decided on judicial predilections and on the briefing, not on the theatrical performances that oral arguments have increasingly become.

“We don’t talk about cases before the argument,” said the Chief Justice. “When we get out on the bench it’s really the first time we start to get some clues about what our colleagues think. So we often are using questions to bring out points that we think our colleagues ought to know about.” Translation: What the Justices thus do is steal the precious, limited time allocated to lawyers to make their pitch to the court, in order to communicate with each other, and bring their fellow justices up to speed. But this is something they could just as easily, or more easily do in conference or in private conversations or memos. Justice Elena Kagan makes no bones about that. Quoth her Lordship: “Oral argument questions are often directed more to a colleague than to the lawyer.” It can be what she characterized another time as “a little bit of the justices talking to each other with some helpless person standing at the podium who you are talking through.” Got it? It turns out that your function when you argue “up there,” you poor schmuck, is not to enlighten their Lordships who may not know much about the law that is pertinent to the issues at hand, but to act as a dummy so the better informed Lordships can pretend they’re talking to you, when in fact they are trying to talk to, or perhaps more accurately talk at each other. Give us a break, your Honors! Can’t you do that on your own time without stealing the poor lawyer’s time? Quoth the chief Justice, “[T]he lawyers feel cheated sometimes. . .” Yeah! They sure do when they are not permitted to do their job which is to make a presentation to the court.

The late Frederick Bernays Wiener admonished in his classic book on appellate advocacy (Briefing and Arguing Federal Appeals) that you should rejoice when the Justices ask questions because it shows that at least you haven’t rendered them comatose. Good point. But hey man, there is such a thing a too much of a good thing, and what goes on “up there” these days  “is obviously a case in point.

In this atmosphere, lawyers are  increasingly compelled to spend their precious argument time acting as straw men for the Justices, to say nothing of wasting time and their clients’ money in an effort to formulate a coherent oral argument that in reality they don’t get to make. Mind you, as all experienced appellate lawyers know, what the Justices want to hear takes priority. But not when what they want to hear is stuff that they should have obtained by reading the briefs. The lawyers flog their oral arguments to death before moot court panels, to be fully prepared for the real thing that may have profound consequences for their clients, and for the country at large. But what they get in the event may be only the posturings and effusions of judges who may not know and haven’t really thought about the intricacies of the case at hand, and who instead of listening to what the lawyers may say to enlighten them, babble on about whatever pops into their heads in the midst of oral argument in order to score points with their colleagues. Sheesh!

Which brings us to judicial humor. Make no mistake, we like humor, including legal and judicial humor. As the late Professor Fred Rodell put it, the law can be like a pompous fat man in a top hat that is just begging for a well-aimed snowball. But wit is a two-edged sword that is appropriate when it can be freely engaged in by both sides to the humorous exchange. Otherwise, humor engaged in by someone in a superior position, who uses his power at somebody else’s expense, when the target cannot respond in kind, is a cheap shot that has all the manliness of tearing wings off butterflies.

Anyway, oral arguments before the Supreme Court are by degrees acquiring the attributes of theatrical performances, not those of a “respectful conversation between intellectual equals,” as the ever-reliable Wiener put it. This is not good, folks; not good at all.

Last Call for the Brigham-Kanner Conference on Property Rights

The annual conference on property rights and the annual award of the Brigham-Kanner prize will take place in about a week at the William & Mary College Law School in Williamsburg, Virginia — on October 17-18, 2013, to be exact. Actually what will take place on the 17th will be a reception and dinner at which this year’s Brigham-Kanner prize will be awarded to Professor Thomas W. Merrill of Columbia Law School as this year’s recipient. The program, with a whole bunch of  knowledgeable speakers will take place the next day, October 18th. So there is still time to make it, if like us you are an eminent domain/property rights junkie.

There will be four panels on the 18th: (1) The Impact of a Leading Property Scholar: Defining the Essence of Property, (2) Promoting Government Forbearance, (3) Roundtable Panel: Implications of the [Supreme] Court’s Recent Taking Cases, and (4) Property Rights in Times of Transition. The interesting part of this year’s Brigham-Kanner festivities is that the various panels will consist of both academic types as well as noted practitioners. Should be interesting.

If you want to make it, get in touch with Kathy Burger, telephone (757) 221-6329, at the William & Mary College Property Rights Conference, P. O. Box  8795, Williamsburg VA 23187-8795.

Supreme Court Grants Certiorari in Another Taking Case — With a Weird Twist

Word reaches us from darkest Washington that though the lights are out and the federal government may be shut down for lack of ready cash, the U.S. Supreme Court is chugging along as usual. This morning, it announced the grant of certiorari in Marvin M. Brandt Irrevocable Trust v. United States, to review a decision of the U.S. Court of Appeals for the 6th Circuit, in order to review one of those cases involving the aftermath of the Rails-to-Trails mess.

Brandt raises the familiar question of who owns the strip of land on which a railroad used to run, but no longer does. At first glance, it appears to deal with the first-year law school proposition that when a dominant owner of an easement ceases to make use of it, that is deemed an abandonment of the easement, and the strip of land covered by the easement reverts to the servient owner unburdened by the easement (technically, it’s not a reversion, but that’s what lawyers have been calling it, so we’ll go along with the gag). The result is that, the easement having been terminated, the strip of land in question on which the railroad used to run, is now owned in fee simple absolute by the [servient] owner of the former railroad right-of-way area.

But in the Brandt Trust case the procedural posture is new. Whereas in previous cases of this type (there are dozens of them) the formerly servient owners sues for a taking when the government converts the former railroad right-of-way into a hiking trail or such, in Brandt the government sued to quiet title, arguing that when it conveyed the strip of land for a railroad right-of-way back in the 19th century, under the authority of the 1875 General Railroad Right-of-Way Act, it did not just convey a plain old garden variety railroad easement, but also retained a reversionary interest which it now wants to assert, thereby precluding the servient owner’s claim. We find it odd, to put it with restraint, that in the 138 years this law has been in effect, nobody noticed this peculiar feature of it.

That nobody did so is perfectly understandable, because there is an old, thoroughly settled legal principle whereby the law abhors the creation of land strips and gores, because their existence would raise hell, particularly in cases just such as this one. If the old rights-of-way would become the unencumbered property of the original grantor (or his successors) who usually no longer own land in the area, it would create nuisance litigation and not much else, because typically, the resulting strips and gores would be useless for any reasonable use. For one thing, the owner of that “reversionary” interest would have no access to those strips and gores. That’s why these cases are litigated by private parties pretty much only when, for example, oil or minerals are discovered under the former right of way, or, more recently, owners of land underlying the now unused right-of-way  (who ordinarily would become the fee simple owners of the former right of way), are told by the government that under the federal Rails-to-Trails Act, the former easement area will be converted  to a hiking or biking trail which will bring strangers (not all of them friendly, well mannered or law abiding) and their garbage into the owners’ back yards.

Absent these circumstances, such strips and gores are completely useless to everybody, but taxes have to be paid on them, and they can become sources of tort liability. So that is why it is a strong legal presumption that their original grantor did not intend to retain any kind of residual title in them, and did not intend to lay a foundation for the creation of useless bitty pieces of land good for nothing but litigation.

If you are interested in the parties’ current arguments in Brandt, you will find good write-ups in the blogs of our colleagues Robert Thomas (www.inverseondemnation.com) and Rick Rayl (www.californiaeminentdomainreport.com) — see their posts of today, Oct. 2, 2013. Have fun.