Sad But Dependable News For the Bald from New York

As we predicted a while back, the New York Court of Appeals reversed the Appellate Division’s opinion in the Kaur case. Kaur was a challenge to the taking of a Manhattanville neighborhood for the expansion of Columbia University. The Appellate Division struck down the attempted taking, but as noted, the New York Court of Appeals reversed.

Stay tuned for the details.

Update. For a comprehensive listing of reviews of commentaries on the Kaur case (with links) go to http://www.inversecondemnation.com/inversecondemnation/2010/06/fridays-columbia-blight-case-kaur-links.html

“Justice and Fairness” in Action — This Time for Real

One of the more annoying things about the law of eminent domain is the courts’ preening about how in eminent domain cases they are into “justice and fairness,” indemnity, and all that other good stuff, when in fact if you press them on this point they ‘fess up that these ringing words are not for for real, and that — as the California Supreme Court put it — they are only expressions of judicial idealism that does not translate into reality, and that folks who believe those judicial bromides just plumb don’t understand the law of eminent domain.

So it was a pleasant surprise to read that New Jersey Supreme Court case (Klump v. Borough of Avalon, No. A-49-09, opinion filed June 22, 2010) holding that on the peculiar facts in issue, the borough could not invoke the defense of limitations in an inverse condemnation action, and argue that it inversely condemned the subject property way back in the 1960s, so the owners’ action was too late. What happened was that the Borough built a berm impeding the owners’ access, claiming that it had the right to do so, so this this was not a taking. So the owners sought other relief in the courts. It wasn’t until 2005 that the Borough came up with its ingenious defense of asserting that, contrary to what it had been saying, it did take the subject property and therefore the owners’ inverse condemnation action was too late. Nothing doing, said the New Jersey Supreme Court.

“Based on the Borough’s position up until 2005 that a taking did not occur, plaintiffs understandably sought recourse through demands for access to their property that led to the declaratory judgment action demanding access and the later-added claims for trespass and ejectment of the Borough from their land. After finally conceding, in 2005, that a taking occurred forty-three years earlier, the Borough now attempts to hide behind the six-year statute of limitations to claim plaintiffs have no right to an inverse condemnation action. In light of these circumstances and in the interest of ‘justice and fairness,’ plaintiffs must be afforded a remedy for the appropriation of their property for public use.”

Well said, your Honors.

It has always bothered us when government entities raise a statute of limitations defense, arguing that the lawsuit is too late, without admitting that they did take the subject property. But if, as they also argue, a taking did not occur, then the limitations period can’t begin running.

Anyway, it’s nice to see a court for once applying the “justice and fairness” idea instead of just talking a good game about it.

Guggenheim Case Argued

If you are a regulatory inverse condemnation junkie, and particularly if you are into takings in the rent control context, we highly recommend the report of our fellow blogger Robert Thomas, on yesterday’s oral argument before the U.S. Court of Appeals for the 9th Circuit, sitting en banc – that’s eleven federal appellate judges — in the case of Guggenheim v. City of Goleta.

Guggenheim is the case in which a three-judge panel of the 9th Circuit held 2 to 1 that the Goleta mobile home rent control ordinance was a taking of the landlord’s property because it monetized the controlled rent advantage, and allowed a departing mobile home tenant to sell it (i.e., to sell the right of occupancy at controlled rents) for a pretty penny to the successor tenant. There was evidence that a used mobile home in place, that had a fair market value of a few thousand dollars, would be sold by the departing tenants to their successors for six figures because it carried with it the right to occupy it at low, controlled rents. So what the ordinance thus accomplished was not a real reduction of rents, but a transfer of the landlord’s right to receive market rents to the tenant who could now disguise them as the “price” of the used mobile home and sell them to his successor, thus taking that money out of the landlord’s pocket.

Roberts offers a thorough, first class, three-part report on the oral argument. We recommend it — go to http://www.inversecondemnation.com/inversecondemnation/2010/06/ninth-circuit-rent-control-taking-case-guggenheim-en-banc-oral-argument-report.html

So the coin is in the air. Stay tuned.

What’s a puzzle to us is that no one, it seems, challenged the ordinance as arbitrary and irrational on its face. The essence of rent control ordinances is that they reduce rents. Here, however, the ordinance did not reduce rents for anybody except those few lucky tenants who happened to be in occupancy when the rent control ordinance was enacted. All other [successor] tenants had to pay market rent, albeit diguised as the artificially inflated price of the mobile home, that the departing tenants got to charge their successors. In other words,  the “price” of the used mobile home, was not really its price but the price of the right of occupancy at controlled low rents.

So it seems to us that a rent control ordinance that does not control rents and confers a windfall (at the landlord’s expense) only on the first generation of tenants  and soaks their successors is both irrational and invidiously discriminatory. Don’t you agree?

New London – $15 Million for Another Pie-in-the-sky Caper

News8wtnh.com reports that — guess what? — New London, Connecticut, is at it again, though this time no eminent domain is involved. This time the city is trying to salvage something out of the Kelo disaster by enticing the Electric Boat Division of General Dynamics to take over the about to become former site of the Pfizer pharmaceutical company research facility in New London.  http://www.wtnh.com/dpp/news/business/new-london-eb-expanding-pfizer

Naturally, the State of Connecticut is financing this deal with taxpayers’ money. Is there another way of doing business in 21st century America? The state will pop for $15 million, while Electric Boat will invest $99 million in the project. This news dispatch does not tell us what that $99 million will be spent on. Acquisition? If so, is Pfizer selling its [former] reserach facility? And if so, what is the sales price?

The new Electric Boat facility is expected to create 700 new jobs. We hope so, even if experience suggests that it would be prudent on our part to wait and see if that is really what happens because such prognostications usually turn out to be exaggerated.

In the meantime, the 91-acres taken in the Kelo case is still sitting there empty and unused, generating no taxes. So far, we have not been able to find definitive, reliable figures on what this caper has cost the public. We have seen figures ranging between $80 and $150 million. But whatever it is, you can now add another $15 million to it.

Your tax money at work.

Plowing Under Detroit – It’s Official

 

There is a big story in today’s New York Times, Susan Saulny, June 21, 2010, at p. A16, with the catchy title Razing the City To Save the City, reporting the latest on the movement to bulldoze much of what is left of Detroit, relocate the displaced population to the denser parts of the city, and to put the vacant land to other uses. Kinda reminds us of the famous but false Vietnam-era line that “We had to destroy the village in order to save it.” For the whole Times story go to http://www.nytimes.com/2010/06/21/us/21detroit.html?scp=1&sq=Razing%20Detroit&st=cse

What has brought Detroit’s plight to the fore again is the realization that the about-to-be-published 2010 census data will indicate that Detroit’s population that stood at almost 2 million in 1950, and went down to 951,000 in 2000, has gone down again – this time to 790,000.

This bit of news is no surprise. Even disregarding our own blogs on this subject – such as http://gideonstrumpet.info/?p=239 and http://gideonstrumpet.info/?p=241 the requiem for Detroit was sounded loud and clear by TIME magazine last October, in a cover story entitled The Tragedy of Detroit: How a Great City fell—and How It Can Rise Again, Oct. 5, 2009, at p. 26. Of course, in listing the causes of this calamity it evidently did not occur to the TIME folks to consider urban redevelopment that devastated the city and displaced much of its population.

So the solutions – if that is what they are – that are now coming from all sorts of creative do-gooders, center on the idea that what’s left of the city be selectively bulldozed so as to displace and relocate the remaining, scattered population into the city’s more densely populated areas, and to use the vacant land for truck farming that would supply wholesome veggies to the city’s remaining inhabitants. Of course, so far, none of these proposals have come with a price tag, so in terms of their practicality, they may only be somebody’s pipe dreams. Also, no one seems to be confronting the problem of how to get the population living in the to-be-razed areas into the new densified neighborhoods. After all, this is America, and while these days the government can use the power of eminent domain to take anybody’s home for any purpose, the government can’t force anyone to move to a specific area. So chances are that if this proposal is implemented, many of the displaced city dwellers will take their just compensation and their Relocation Assistance Act benefits and head out, out of the city and into the surrounding suburbs that have been doing all right, or perhaps even altogether out of state which is having economic problems of its own.

What is significant to us is that Detroit pioneered the use of modern urban redevelopment that bulldozed lower priced housing, promising a better urban future, but has not delivered on that promise. Symbolically, General Motors that was the beneficiary of one of the most outrageous mass takings in American history – the Poletown case that uprooted an entire community to provide GM with a site for a new Cadillac plant — has gone bankrupt in spite of the city’s largesse.

So do you think that those who gave us this large-scale urban disaster will now fess up that they screwed up? Or at least that the urban redevelopment model with its mass eminent domain takings, followed by reconveyance of the taken land to favored redevelopers, has been a huge mistake? No? Join the club – neither do we.

Stop Beach Renourishment Case Decided

We haven’t seen the opinion yet, but the word is out that the U.S. Supreme Court has decided the Stop Beach Renourishment case. Holding: no taking. Author of lead opinion: Justice Scalia.

This is the case that raised the question of whether government beach replenishment performed so as to create a strip of public beach between privately-owned waterfront beach homes and the water, amounted to a taking of the owners’ littoral rights.

This is another one of those fragmented decisions with several groupings of Justices agreeing on various parts of the decision, but all agreeing that there was no taking. Quoting from our fellow blogger’s post on this case (www.inversecondemnation.com), the lineup goes something like this:

“SCALIA, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, IV, and V, in which ROBERTS, C. J., and KENNEDY, THOMAS, GINSBURG, BREYER, ALITO, and SOTOMAYOR, JJ., joined, and an opinion with respect to Parts II and III, in which ROBERTS, C. J., and THOMAS and ALITO, JJ., joined. KENNEDY, J., filed an opinion concurring in part and concurring in the judgment, in which SOTOMAYOR, J., joined. BREYER, J., filed an opinion concurring in part and concurring in the judgment, in which GINSBURG, J., joined. STEVENS, J., took no part in the decision of the case.”

Follow up. Predictably, this set of opinions has inspired a lot of online chatter by academic mavens, so we won’t attempt to duplicate their efforts now. We do recommend that if you are into this stuff you go to http://lawprofessors.typepad.com/property/ for an analysis of the decision (including the expected high-class performance by Professor Steven Eagle of George Mason University), and a bunch of links to comments by others. See Thoughts on Stop the Beach, June 18, 2010.

For more commentary and more links go to www.inversecondemnation.com There you will find a reference to Justice Scalia raising in haec verba the inquiry of how much wood would a woodchuck chuck if a woodchuck could chuck wood. No, we are not making this up.

All of which reminds us of the deathless observation of Connecticut land-use lawyer Dwight Merriam, that when the Supreme Court coins a new phrase in a pertinent opinion, that means that land-use lawyers will be buying new cars in the next three years. So it seems safe to prognosticate that the law is about to give birth to a new subspecialty: woodchuckery whose expostulation may not end the depressed condition of the automobile industry, but may have a positive effect on it once all those lawyers get busy.

Blight Finding Stricken Down in California

 The California Court of Appeal just handed down an opinion holding that findings of blight by a redevelopment agency were not supported by substantial evidence, and therefore the proposed redevelopment project was invalid.

This opinion, County of Los Angeles v. Glendora Redevelopment Project, Docket No. H032945, was filed on June 16, 2020. It’s a biggie – some 40 pages long, and based on a huge (6800-page) trial court record – so its reasoning doesn’t lend itself to abstracting.

But its bottom line amounts to: no blight – no redevelopment. The trial court found that there was no substantial evidence of blight, and the Court of Appeal affirmed. 

This opinion contains a good, concise description of how redevelopment financing works (slip opinion, pp. 4-5, footnote 2.

Of course, this case has an unusual wrinkle. Though it was a so-called validation action challenging the validity of the Glendora Redevelopment Project, it had been brought – not by a property owner – but by the County that was bent out of shape at the prospect of losing tax revenue that would be diverted from the project area to the redevelopment agency, instead of going to the County as the local taxing authority.  

We don’t mean to sound overly cynical, but courts, particularly California courts, are likely to be more receptive to pleas of a government entity eager to preserve its tax revenues, particularly now that the whole state appears to be going down the tubes because of the recession, than they are to pleas of a property owner who wants to keep his property from the clutches of an eminent-domain-wielding redevelopment agency that is out to raise money. On the other hand, to be fair to California courts, this is not the first time they have stricken down a phony blight finding – see for example Neilson v. City of California City, 146 Cal.App.4th 633 (2007), holding that a statute allowing redevelopment of blighted urban land was not applicable to vacant desert land. 

If you are into eminent domain, it’s an interesting read. go to http://www.courtinfo.ca.gov/opinions/documents/H032945.DOC

Don’t Tread on Yang!

The device shown in this picture looks remarkably like a very crude version of a World War II German Nebelswerfer - a small, multiple-tube rocket launcher. And guess what? That’s what it is. It was constructed by a Chinese farmer named Yang  Yude who doesn’t fancy the idea of having his land taken for what we would call economic redevelopment, so he has taken to firing rockets from this contraption over the heads of the government/developer representatives who came to take possession of his land after offering him $19,500 which he contends to be way too low. Hmm. Where have we heard that one before?

So far, no casualties, but the developers called the cops who — guess what? — took Yang’s side and protected him from the would-be takers.

Main Image

And here is a picture of Yang in action.

Main Image

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Chinese farmer Yang Youde fires his homemade cannon near his farmland on the outskirts of Wuhan, Hubei province June 6, 2010. Yang’s cannon, which is made out of a wheelbarrow, pipes and firing rockets, is used to defend his fields against property More…
Credit: REUTERS/Stringer

For the Reuters story about Yang and his rockets’ red glare go to http://www.reuters.com/article/idUSTRE6570QY20100608 

On a serious note, what this reminds us of is that people are territorial creatures who don’t take kindly to being pushed off their turf.

Old Kentucky Justice

For once, it appears, the hunted became the hunter. Albert E. Leggett bought his property in 1990 for $325,000. In 2001, Sprint offered to buy it, and Leggett asked for $900,000. Sprint countered with a revised offer of $200,000. Leggett then hired and appraiser who opined to $750,000. Sprint now offered $275,000. But in the condemnation action, court-appointed commissioners awarded $600,000, over twice Sprint’s revised offer. At this point, Sprint abandoned the condemnation.

But in the meantime, when the owner filed his answer, he included a counterclaim for malicious prosecution, abuse of process, and violation of 42 U.S.C. Sec. 1983. The trial court granted summary judgment in Sprint’s favor. But the Kentucky Supreme court found the abuse of process claim proper.

According to the opinion, Sprint argued that it had filed its condemnation action under a Kentucky statute allowing telephone companies to condemn easements for telephone lines. But here Sprint had tried to condemn the owner’s entire property, demolish his building and put up one of its own. Nothing doing, said the court — a building is not a telephone line, so Sprint’s condemnation action was not well taken. The citation to the Kentucky Supreme Court opinion is Sprint Communications Co. v. Leggett, 307 S.W.2d 109 (Ky. 2010).

This case also qualifies for our Lowball Watch department, given Sprint’s attempt to acquire the subject property for $125,000 less than what the owner paid for it in 1990, eleven years earlier.