Monthly Archives: February 2014

Lowball Watch — New York

The AAA-Electricians case was a taking of 18.8 acres by the Village of Haverstraw which then transferred the subject land to a developer. The  village offered the owners $3,480,000, and it made an “advance payment” of $2,596,150, claiming a miscalculation. But at trial, the village came in with an opinion of value of $1,512,000, less $512,000 for cleanup. While this went on, the village resold the property to a developer for $3.5 million.

The trial court (there are no juries in New York condemnation trials) found that the village acted in bad faith and awarded $6,500,000 as just compensation for the taking.

On appeal. Held: affirmed.

For a more detailed writeup of this case by Michael Rikon, the owner’s counsel, go to http://eminent-domain-blog.com/appellate-division-affirms-award-in-aaa-electricians/

“[W]e Don’t Have to Listen . . .”

Dispatch from on high: SCOTUS has just held that the right to exclude applies to government owned property the same as to privately owned one. The right to exclude strangers from one’s property is a core attribute of private property ownership. But what if the property is publicly owned? Same thing. Ah, but what if the government does allow some entry by the public for specified, limited purposes?

SCOTUS’ answer is that the same rule applies; the government may limit the right of entry to the specified purposes, and no more. As  Lyle Dennison put in in the SCOTUS Blog, “Military authority within the outer boundaries of a base, [Chief Justice] Roberts wrote, does not ‘change when the commander invites the public to use a portion of the base for a road, a school, a bus stop, or a protest area, especially when the commander reserves authority to protect military property by, among other things, excluding vandals and trespassers.’ ” Military commanders must have full authority to control all activities on their bases, and that is not subject to being challenged by any Tom, Dick or Harry, and second-guessed by judges.

This case involved the review of the conviction of a protester given to demonstrating at the Vandenberg Air Force Base in California, when he refused to leave when so ordered.

Though garbed in the usual legalistic verbiage, the essence of the court’s opinion in United States v. Apel was simplicity itself. When the government allows a public road through a military base, that does not permit members of the public to use it for purposes other than access. Which strikes us as similar to private law of easements and licenses.

But wait a minute, said the protester, what if I want to use that road to stage a protest against government military activities? Doesn’t the First Amendment then entitle me to do my protest thing? We ain’t saying, replied the court, because you didn’t raise that legal issue in your petition. So go back to the lower court and ask “Mother, may I?” in a proper way. So stay tuned, folks. We have a feeling this case will be with us again.

In case you are wondering what the title of this post has to do with its content, here goes. The lawyer for the protester, was Dean Erwin Chemerinsky of the University of California Law School (Irwine) and we find one of his exchanges with — who else? — Justice Scalia, to be of special comedic and personal interest. It went like this:

JUTICE SCALIA: “You keep sliding into the First Amendment issue, which is not the issue” on which the court accepted the case, Justice Antonin Scalia said. “We’re only interested in whether the statute applies.”

Chemerinsky insisted that the statute in issue must be considered in tandem with the petitioners’ speech rights.

Scalia’s reply,  in haec verba: “You can raise it, but we don’t have to listen to it.”

Which reminds us of our own misadventure in oral argument in the wretched Agins v. Tiburon case in which in 1980 your faithful servant tried vainly to get the Justices to address the main issue of the case, namely whether “just compensation” rather than specific relief was the proper remedy for regulatory takings, the same as for physical ones. After all, denial of monetary remedy was the holding of the California Supreme Court that was being reviewed in Agins. But if you are a reader of this blog, you no doubt know that the court ducked that issue and held instead that the case wasn’t ripe.

But as the Agins oral argument wended its merry way, Justice Byron White, looked your faithful servant in the eye, smiled, and said: “You can’t cram issues down our throats that we don’t need to decide.” The cold record reminds us that we had the presence of mind to respond “That would be beyond my meager powers, Your Honors.” So welcome to the club, Dean Chemerinsky. When we are admitted into their Lordships presence for oral argument purposes, there is a division of labor. We talk and they listen — or maybe they don’t, depending on how the spirit moves them.

Of course, since you, dear reader, may not be a fully credentialed member of the regulatory takings mafia, allow us to bring to your attention the fact that, as it turned out, their Lordships were wrong — not because we say so, but because they eventually said so themselves. First, in the First English Evangelical etc. Church v. County of Los Angeles case (which was no riper than Agins)  they held on the merits that, yes indeed, on the issue of remedies for non-physical, regulatory takings, we were right and the California Supreme Court was wrong in Agins when it (a) denied that there is such a thing as a regulatory taking, and (b) denied a monetary remedy for such a taking which it rechristened as a “deprivation” of property. Then, a bit later, to put an intellectual cherry on top of this grotesque sundae, SCOTUS confessed again (this time in the Lingle case) that it was wrong in Agins where it also held out of the blue that a taking results when the challenged regulation does not advance a legitimate public interest — that issue implicates substantive due process, not the taking clause as they erroneously asserted in Agins.

So the bottom line of this case is two-fold. First, to paraphrase a line of Gertrude Stein, a road is a road is a road — not a protest staging plaza that can be commandeered by any irate citizen, and second, If you want to argue the scope of the First Amendment applicability to your activities on such a road, you better raise it as an issue properly.

 

 

 

 

Are Cities Shrinking or Growing? — Which Planners’ Magazine Do You Believe?

You gonna love this one, folks.

The MIT planners’ magazine ( http://spectrum.mit.edu/) informs us that “Cities are growing faster than you can say megalopolis.” On the other hand, Future Cities, Feb., 21, 2014, deplores “Shrinking Cities” and proposes an antidote by developing them. See http://www.ubmfuturecities.com/author.asp?section_id=406&doc_id=526601

We have no intention of getting into this fight, but we thought you would like to know.

California – “Renting Now Cheaper Than Owning”

That’s a headline from today’s L. A. Times 2/21/14, at p. B2). No comment seems necessary.

But be careful. This applies only to the “in” counties bordering on the Pacific: Los Angeles, Ventura and Orange in Southern California. and Santa Clara, Alameda and San Francisco up north. To qualify for a loan on one of these houses the buyer would have to have an annual income of $95,389. Rots of ruck!

Quoth a local housing maven, “The cost of financed homeownership is becoming dangerously disconnected with still-stagnant median incomes.”

Bubble, bubble, . . .

Detroit Plans to Fight Blight — No, Seriously

It would be funny if it weren’t the greatest urban tragedy to befall America. Detroit — the urban basket case of America — has begun a project modestly described by the New York Times as A Picture of Detroit Ruin, Street by Forlorn Street, Feb. 18, 2014, at p. A1, above the fold yet, which is prime journalistic real estate. Click  on  http://www.nytimes.com/2014/02/18/us/detroit-tries-to-get-a-clear-picture-of-its-blight.html?hp&_r=0

What it is, is an effort by 75 three-person teams, cruising the city of Detroit to ascertain which homes are still occupied, and photograph them. Why? So the powers that be in city hall can decide the extent of the mess they have on their hands, and determine which ones should be demolished and which saved. Saved for what? The Times article doesn’t really explain, but you can get an idea of the task at hand when you reflect on the fact that Detroit is broke and formally in bankruptcy, and that this effort to survey the extent of municipal blight has already cost $1.5 million raised by private entities.  Which barely rises to the level of peanuts because, “some officials” have predicted that demolishing the buildings that must go, could cost as much as $1 billion. Remember, this is an estimate; these folks don’t know yet how many buildings would have be placed on such a demolition list. Lord have mercy! And we assume that being interested in this topic — why else would you be reading this stuff? — you already know that government cost estimates of municipal projects aren’t worth the paper they are printed on.

If we sound contemptuous of this effort, we are. Being an old geezer, who has spent a half century laboring in the eminent domain vineyards, an effort that has included lots of redevelopment cases, we have seen much stuff like that come and go, with little or nothing to show for it, particularly in the case of Detroit. What these bozos seem unable to grasp is that a city is not a collection of buildings, occupied or not. A city — a viable city — consists of people, not bricks and mortar. Specifically, middle-class people who have a stake in keeping their city (their habitat to use a bit of newspeak) healthy both economically and socially, with at least decent schools, and not just a source of government gimmes to their increasingly unproductive population. And in the case of Detroit, the productive, middle-class people have left. In the apt words of a fellow quoted by the Times, who wound up as the onliest one left on his entire block: “Everyone went bye-bye.” Bye-bye, indeed. When it was a real city, Detroit had a population of some 1.8 million; now it’s more like 700,000, and most of those are the poor, the unemployed, and those dependent on the government. So who is going to seize the municipal helm, demolish or rehabilitate hundreds of thousands of largely unoccupied parcels, fill them with civically competent, tax-paying people, and restore the city to its former glory — if that is what it was; a point as to which there is some dispute?

Mind you, this is not the first time that Detroit has made brave noises like that. Urban redevelopment in Detroit, and massive abuses of that process, go back about a half-century, but all these folks have to show for it is blight on a mind-boggling scale, massive abuse of eminent domain that victimized and dispersed the people who should have been enticed to stay put, and a bunch of redevelopment projects that didn’t redevelop the city, and even in the case of narrowly focused projects that used eminent domain to help specifically the likes of General Motors and Chrysler, could not keep them from going bankrupt.

So keep an eye on this mess. Remember that the Lord works in mysterious ways, and something positive may yet come from it. But we aren’t holding our breath, and we suggest you don’t either. And if you think us wrong, let’s see you sell whatever place you live in out here, and move to Detroit where real estate is real cheap; you can make a small fortune selling your California digs and buying a grand family home in Detroit free and clear.

So is there anything positive about Detroit? Yeah. A colleague of ours who lives out there (in a prosperous Detroit suburb, of course) informs us that Kowalski’s sausage is still available. Now there is something good you can sink your teeth into, even if that venerable establishment has gone out of the retail business. http://www.freep.com/article/20121113/BUSINESS06/121113069/kowalski-delis-closing

 

 

“Sandbagging” in Virginia — and Elsewhere

Take a look at an article in the Richmond-Times Dispatch by A. Barton Hinkle, entitled An Eminently Unfair Practice (Feb. 16, 2014, Sunday Commentary section). It describes the nasty practice whereby condemning agencies take property in a quick-take procedure, displace the owners, and deposit their probable “just compensation” in court. Then, if the owners don’t like the amount — they can take the matter to trial and have a judge and jury determine the proper compensation. So what’s the problem, you ask?

The problem is, folks, that in some cases when trial time comes around, the condemnor shows up with a new appraiser who offers a new opinion of value that just happens to be significantly lower than the “good faith deposit” that had been made by the condemnor in the quick-take procedure. But by then the owner (who has been evicted by the condemnor) has withdrawn the deposit and spent the money on replacement housing. So if the jury returns  later with a verdict that is lower than that deposit, the owner has to refund the pertinent part of his withdrawn money — which he no longer has, having spent it on replacement property. That is known as “sandbagging” around here — it is a transparent gimmick to put pressure on the owner to settle on the condemnor’s terms and to discourage him from going to trial before a judge and jury.

The nasty twist is that the owner is not allowed  by law to tell the jury about that earlier, higher, amount deposited by the condemnor as a “good faith” estimate of just compensation for the taking of the subject land. Nor is he allowed to cross examine the condemnor’s appraiser on that subject. So the condemnor can blow hot and cold on the issue of value with no danger that its inconsistent positions will be revealed to the jury. There have even been a couple cases in California in which condemnors tried to pull off that stunt by having the same appraiser testify to both the higher and the lower amounts with the owner forbidden to disclose that inconsistency to the jury.

How bad can it get?  About as bad as you can imagine, and then some.  The worst case of manipulating the amount of the deposit that we know of (although it was not a classic instance of “sandbagging”) involved a Caltrans taking of chunks of land from a power line corridor for a highway, which rendered the transmission corridor unfit for future high-voltage lines and seriously — and we do mean seriously — diminished its value. But the condemnor deposited a thrifty $245,000 into court. Long story short, and skipping over some skullduggery, after trial in which the jury heard appraisal testimony (which by then the condemnor upped to four or five million), it came back with a verdict of $49,500,000. That’s right folks: almost $50 mil as against a “good faith” deposit of less than a quarter of a million. Not only was that verdict affirmed on appeal, but the California Supreme Court issued and order directing the condemnor not to brief valuation issues because they would not be considered — the controversy on appeal was about interest — which is another long story that we should tell you about one of these days, but won’t get into here. If you really want to know about it, check out People ex rel. DOT v. So. Cal. Edison Co., 22 Cal.4th 791 (2000).

Of course, in this case, as Caltrans thus learned the hard way, you don’t get to push around the likes of Edison in this fashion, but these figures speak for themselves and provide an acute insight into how far these guys can go in manipulating deposits.

 

California Choo Choo – (Cont’d.)

A California Court of Appeal has issued an order expediting the review of a trial court decision whose effect has been to stop the sale of railroad bonds by the state, thereby dooming the proposed Los Angeles to San Francisco “bullet train.” The appellate court decision does not reverse that ruling; it just lets the railroad authority cut into the line of cases awaiting court review on the merits.

Stripped to plain English, the issue in this appeal, inter alia, is whether bond promoters are free to mislead the voters when they submit their proposed state bond issue for voter approval in an election. Specifically, can they represent the public debt to be incurred by those bonds as $X but then go ahead and issue bonds for it that are ten times that amount.

The ruling is covered by the L.A. Times (Ralph Vartabedian, Appeals Court Stays Judge’s Bullet Train Bond Ruling Pending Appeal,  Feb. 16, 2014, http://www.latimes.com/local/la-me-bullet-decision-20140216,0,155139.story#axzz2tV7leS8Z ).

Stay tuned.

No Taking Found in the Santa Monica Airport Lawsuit

We noted the other day that the City of Santa Monica has sued the feds trying to  get them to let go of the Santa Monica Airport created by the feds (or at least with federal money) during World War II when it served the Douglas aircraft manufacturing plant. Ever since, that airport has been a fruitful source of litigation over, . . . well, over everything that an airport can sue and get sued about. Michael Berger, the leading airport/inverse condemnation lawyer, was truly inspired when he entitled his landmark law review article on airport litigation, Nobody Loves an Airport, 43 So.Cal. L.Rev. 631 (1970).  Nobody does, except maybe pilots who have to take off and land somewhere. If you want to see the history of that airport, including its litigational history, go to http://www.smgov.net/Departments/Airport/About_the_Airport/Airport_History.aspx . That will take you back to the days before World War I, and on the way will inform you about all that litigation.

Word now comes that the local federal court has dismissed the city’s action, holding that as far as the taking claim is concerned, Santa Monica was too late (the limitation period ran out in 1960) and in the wrong court (since it claimed a taking by the feds, Santa Monica should have filed that claim in the U.S. Court of Federal Claims in Washington — the only court that can entertain taking claims against Uncle Sam). See Judge Tosses Santa Monica Airport Lawsuit, L.A. Times, Feb. 15, 2014. Click on http://www.latimes.com/local/la-me-santa-monica-dismissal-20140215,0,6042053.story#axzz2tPIHVDiT

Leo Durocher, the baseball great, once asked rhetorically in a moment of exasperation with his players, “Can’t anybody around here play this game?” We claim no baseball mavenhood but that line comes to mind in this context. After the courts got done screwing up the field of inverse condemnation law, mostly running interference for the bad guys taking private property, and created byzantine procedural complexities, nobody, it seems, knows how, when and where to file an inverse condemnation lawsuit. Although, truth to tell, in this case we experience a distinct moment of Schadenfreude when for a change it’s the bad guys, the ones who for years have enjoyed the benefits of this mess, get tangled up in the substantive/jurisdictional/procedural aspect of this field of law.

Santa Monica vows that this isn’t the end of the matter, and threatens to appeal, so the litigational tradition of Santa Monica Airport bids fair to go on. Stay tuned.

Lowball Watch — Louisiana

Word reaches us that in a New Orleans condemnation action, Board of Supervisors of Louisian State University v. DEO Co., Orleans Parish Case No. 2010-8717 (Feb. 6th, 2014), LSU sought to take DEO’s land  and deposited $230,000. But after trial, the jury — after deliberating for only 40 minutes — came back with a verdict of $351,500 for land, plus $250,000 for improvements, for a total of $601,500. Deducting the $230,000 that LSU had deposited  earlier, that came to a $371,500 as an additional payment due the owner.

According to our calculator, the total compensation comes to over 2.6 times LSU’s original offer. Plus interest.

Three Justices Say: It’s Not the Oral Argument . . .

Adam Liptak, the NY Times Supreme Court maven, brings us a dispatch in today’s Times (http://www.nytimes.com/2014/02/11/us/kagan-says-her-path-to-supreme-court-was-made-smoother-by-ginsburg.html?src=me&_r=0) that Justice Ruth Bader Ginsburg has come out as the third — count ’em, third — Supreme Court Justice to caution the Great Unwashed (at least the readers of the Times) that oral arguments before the Supreme Court (and the Justices’ reaction to them) are not necessarily a reliable indication of the outcome. Quoth her Lordship: “The bulk of the court’s work, is based on written submissions and private discussion, reflection and writing.”

Justice Ginsburg thus joins Justices Thomas and Kagan in publicly endorsing that conclusion.

Moral: Undue reliance on what one hears in oral arguments may leave the listeners with an inaccurate impression of the imminent outcome.

Based on a half century of appellate practice, we agree. True enough, some oral arguments can be so lopsided that there is no doubt as to outcome (we offer the oral argument in Del Monte Dunes as a case in point).