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Archive for December, 2010

Happy New Year!

Friday, December 31st, 2010

We wish our readers a happy, healthy and prosperous New Year.

The New York Times Thirsts for Justice. Sort of.

Tuesday, December 28th, 2010

It isn’t every day that your faithful and obedient servant finds himself aligned shoulder-to-shoulder with luminaries like The New York Times and UC Irvine’s Law School Dean Erwin Chemerinsky, both of whom complain – and rightly so – that the Supreme Court has been increasingly making access to justice more difficult for ordinary folks who complain of constitutional mistreatment by the government.

Today’s New York Times editorial (Temple to Justice, Dec. 28, 2010, at p. A18) raises its voice again and admonishes the Roberts court to make sure that justice “be truly democratic, not merely reserved for the powerful.” Sounds right to us. But while this is a noble sentiment, it overlooks that even though none of the powerful are more powerful than the government, when it comes to constitutionally protected, individual property rights, the Times can usually be found on the side of the government, inveighing editorially against the interest of ordinary folks whose assets are being plundered, and so can Dean Chemerinsky. Case in point, the 2005 Kelo decision.

When the Supreme Court decided the wretched Kelo v. New London case in 2005, the popular reaction ran at some 90% against that awful ruling that permitted the eviction of the inhabitants of an unoffending lower middle-class neighborhood, followed by its destruction, for the sake of catering to the wishes of the Pfizer pharmaceutical company who wanted to see more upscale housing and shopping for its well-paid professional workforce. Michael Kinsley nailed it when, writing in the Los Angeles Times at the time, he observed that the Supreme Court found yuppification to be a “public use” within the meaning of the Fifth Amendment. And it was not just the result; in reaching it the Supreme Court held that it would defer to the condemnor’s decision to take, that did not even have to be rational but only “rationally related to the conceivable” – i.e., that whatever the city wanted to do with the subject property was a “public purpose,” good enough to be deemed a well-nigh conclusive, constitutional determination of “public use.”  That was bad enough, but worse was to come: the touted New London redevelopment plans that the court endorsed never materialized. The city’s chosen redeveloper could not even get financing for this “carefully planned” project, even before the 2008 real estate crash. And so, Connecticut politicians blew over $80 million of the taxpayers’ money for nothing. Adding insult to injury, Pfizer later announced that it is moving out of New London, taking some 1400 jobs with it. So much for the “public purpose” of community revival through the use of eminent domain.

But unlike almost all other newspapers, the New York Times supported that decision on its editorial page, even though it certainly denied access to justice to ordinary home owners whose modest dwellings were being seized to placate a powerful, wealthy corporation. Their legitimate interests did not receive impartial consideration from the court which was content to rubber-stamp the city’s self-serving policy. Small wonder the Times took that position. At the time, the Times was itself at the public trough up to its ears, consuming a “free lunch” served by the New York courts and redevelopment folks who condemned land for a new Times building at 8th Avenue and 43rd Street in Manhattan, at a subsidized cost. Which, in a stroke of poetic justice, turned out to be a flop too. The newspaper biz ain’t what it used to be, and before long, the Times was forced to sell its share in its new building which it now occupies as a tenant.

That should have been bad enough, but if you want to talk about denying access to justice altogether, there is nothing that beats the state of inverse condemnation law. On the one hand the Supreme Court says that when your property is taken, whether by physical invasion or by extreme regulations, you are entitled to just compensation, and when you sue under 42 U.S.C. § 1983, to a trial by jury. So what’s the problem?

The problem is that when you want to avail yourself of these ostensible rights, the courts tell you that you can’t. First, you are not allowed to sue in federal court like all other plaintiffs whose constitutional rights have been violated. You must first sue in state court, in an effort to recover your “just compensation” under state law. Why state law? Because, said the U.S. Supreme Court in the Williamson County Planning Commission case, unless you have first sought your available state court compensatory remedy, your federal cause of action isn’t deemed ripe, so if you try suing in federal court, you’ll get tossed out on your keester on a motion to dismiss.  And if you sue in state court, as you must do if you want relief, and that court denies it (a foregone conclusion in California), you then can’t seek relief under federal law because the state court decision denying relief under state law is deemed res judicata and decisive of the federal law as well. So if you try to sue in federal court then, you are told that the federal court has to give full faith and credit to the state court judgment even when it concededly denies you constitutionally-mandated relief. Thus, you become a legal pariah – unlike all other litigants who seek redress for violation of their constitutional rights, you can never get your federal taking claim considered on the merits – neither in state nor in federal courts. We not making this up. Four concurring U.S. Supreme Court Justices noted this fact of life in the San Remo Hotel case.

So you’d think that if there is any situation in which deserving litigants should be granted access to the courts and at least be able to present their federal constitutional grievances on the merits, this is it. So here is our suggestion to the New York Times and to Dean Chemerinsky: if you thirst for access to justice, you won’t find another field of law that is more deserving of your attention than the “ripeness mess” that has grown like a cancer and is now part and parcel of takings law. So willl these good folks strike a blow for the cause of access to justice in this case? Don’t be silly. That would be politically incorrect.

Dispatch from La-La Land: The Stimulus Isn’t Stimulating

Monday, December 27th, 2010

The Los Angeles Times reports that the City of Los Angeles, having scrounged some $630 million from the Feds in 2009 as stimulus money, has only spent a fraction of it. (Maeve Reston, L.A. Lags Behind Other Big Cities on Spending of Federal Stimulus Funds, December 26, 2010 ( http://www.latimes.com/news/local/la-me-stimulus-losangeles-20101227,0,1455825,print.story ))

These people are so screwed up that they can’t even spend the money they have. In the words of the Times:

“[N]early two years later, the city has spent only about quarter of that money, a rate of spending that trails that of New York, Chicago and several other large California cities. Though the bulk of L.A.’s stimulus money was awarded by last March, the city had completed only eight of its 108 projects by mid-October.”

It seems that some 2400 experienced city workers retired, and 300 were laid off. “On top of that, many city workers, including some who are handling stimulus projects, are forced to be on furlough 16 to 26 days a year.” So the implicit message here seems to be that the experienced city folks, those best qualified to do this job, aren’t there any more, and the second-stringers have to pitch in, many ona part-time basis. So in the words of that politically incorrect World War II joke, “Rots of ruck, guys.”

Coming attractions: the city plans to blow $100 million on purchasing foreclosed homes, fix them up and sell them.” We can’t wait.

Do read the whole L.A. Times article.

Tennessee Supreme Court Makes It Official: The U.S. Supreme Court Misread Tennessee Law in the Williamson County Case

Tuesday, December 21st, 2010

It isn’t every day that a state supreme court lays it on the line and makes it clear that the U. S. Supreme Court has misunderstood state law, but it happens and it just happened again in our field. You may recall that in Williamson County etc. Commission v. Hamilton Bank, 473 U.S. 172, 194-195 (1985), SCOTUS refused to provide relief to the aggrieved property owner because it found the case unripe. Why? Because, among other things, the owner who claimed a regulatory taking of its property had not first sought just compensation in the state courts. Said the Supreme Court: “If the government has provided an adequate process for obtaining compensation, and if resort to that process ‘[yields] just compensation,’ then the property owner ‘has no claim against the government for a taking” and therefore it follows that “if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation.” . . . “The Tennessee state courts have interpreted § 29-16-123 to allow recovery through inverse condemnation where the ‘taking’ is effected by restrictive zoning laws or development regulations,” emphasis added. And so, as the court read Tennessee law, it followed that since the property owner had not shown that the Tennessee inverse condemnation procedure was unavailable or inadequate, the taking claim was premature. So that was that. Or was it?

Actually, if you go to the trouble of reading the statutory and decisional law of Tennessee cited in the Williamson County opinion, you will discover that it does not support the court’s assertion that Tennessee provided a compensatory remedy for regulatory takings. Rather, that law it is limited to cases of physical takings, and does not provide a compensation remedy for regulatory takings. Don’t take our word for it; check it out for yourself.   

More important, since it was Tennessee law that was thus in issue, shouldn’t we ask what the Tennessee courts have had to say about all this? After all, when it comes to interpretation and application of state law, with all due respect to the Magnificent Nine, it is the state courts that have the last word. So did the Tennessee law in 1985 (when Williamson County came down) provide a compensation remedy for regulatory takings? No, it did not. How can we say so with such assurance? Good question. We’re glad you asked.

We know this because the Tennessee Supreme Court told us. Check out B & B Enterprises of Wilson County v. City of Lebanon, 318 S.W.3d 839 (Tenn. 2010), and there it is in black-on-white:

 “[T]his court has not yet held that a regulatory takings claim can be asserted under Article I, Section 21 of the Tennessee Constitution. Currently, we have recognized only two types of takings claims – physical occupation taking claims and nuisance-type takings claims. Regulatory takings do not fall into either of these categories.” 318 S.W.3d at 845, (citations omitted, emphasis added).

The Tennessee Supreme Court went on to note that the B & B case before it was “not a proper vehicle for deciding the existence or scope of a regulatory taking under Article I, Section 21” because it dealt with the statute of limitations – when is such an action timely, assuming for the sake of argument that it exists, rather than its substantive scope. Which, if Justice Scalia will forgive us for stealing his immortal line from the Renourish the Beach case, this is another example of the judiciary pondering how much wood would a woodchuck chuck if a woodchuck could chuck wood.

This brings us to the point of this post. It is now clear beyond the possibility of rational quibble that SCOTUS was dead-wrong in the Williamson County case. It misread Tennessee law, and its opinion simply misrepresents it. Tennessee did not then permit inverse condemnation actions for regulatory takings, and it still doesn’t. How all those smart clerks drafting SCOTUS opinions and meticulously checking the authorities relied on by them could have missed something so basic is difficult to comprehend.

So in addition to Williamson County’s many other faults that inspired four Supreme Court Justices to suggest in the San Remo Hotel case that its ripeness holding should be reconsidered, we now have a definitive interpretation of Tennessee law by the Tennessee Supreme Court which tells us authoritatively that SCOTUS was just plain wrong when it relied on a nonexistent rule of Tennessee law supposedly allowing regulatory taking actions, when in fact it did not. From which follows the ineluctable conclusion that the morally grotesque, doctrinally deficient, and intellectually rickety “ripeness doctrine” foisted on this long suffering field of law by the Williamson County case and its progeny, stands on feet of clay, even on its own premise.

Environmental Review vs. Eminent Domain — It All Depends on Which Ox Is Being Gored

Sunday, December 19th, 2010

It is by now a familiar story that when it comes to environmental impact statements and their review by the courts, nothing is sacred. It started over 30 years ago, when the first wave of environmentalists began challenging new public projects on the grounds that the environmental statements on their impact were incomplete, or failed to consider alternatives, etc., etc. If you want a great vintage example of that sort of stuff do read William Tucker, Environmentalism and the Leisure Class, Harper’s, December 1977, at p. 49. It tells the story of how environmentalists nitpicked to death, and eventually defeated, the “Storm King Mountain project” — a Consolidated Edison pumping station on top of Storm King Mountain on the Hudson River, north of New York City. The idea was that Con Ed would build a water reservoir on top of the mountain, fill it by pumping water up to it where it would become a lake and just sit there until there ever was a major power demand, like a power failure, in which case the water from that lake would be released to flow down the mountain through tunnels and power stand-by hydroelectric generators at its foot, which would then restore power.

But nothing ever came from it, and the project was not built. Why? Because environmentalists successfully tied it up in administrative proceedings and then in court. And the courts, whether ruling pro or con, had no trouble considering the merits of the proposed design and Con Ed’s efforts in producing it.  This is quite a story and we suggest that you do read Tucker’s article for its details.

The bottom line is that when it comes to environmental law, courts do not hestitate to plunge into, review, criticize and where appropriate, disapprove the design and location of public works, rejecting in the process the considered judgments of engineers, scientists and planners. So why is it different when it comes to eminent domain?

This question was inspired when we read the recent decision in City of Chicago v. St. John’s United Church of Christ, 935 N.E.2d 1158 (Ill.App. 2010). There a group of condemnees challenged the taking of their church and cemetery for expansion of the O’Hare Airport, and one basis for their lawsuit was the allegation that the city failed to establish necessity for the project. This argument was rejected by the court which proclaimed itself all but incompetent to review these matters. Said the court:

“Judicial interference in the actual plan to be implemented would lead to interminable delays, as there is always a different way to configure the use of land, especially a plan as massive as the expansion of an airport. Even if the overall expansion plan has changed such that the planned runway could be built on land other than the cemetery land, the fact remains the runway is planned to be built there, and the trial court would have no authority to scuttle the plan or require the City to redraw the plan to place the runway elsewhere.”

So there you have it. As the court also observed, “These are questions of a technical nature that are not appropriate for judicial review.” So why are these “technical questions” readily considered and criticized by judges in environmental review litigation, but are not “appropriate” for judicial consideration if the court action is labeled “eminent domain” instead of “environmental review”?

Lowball Watch – Minnesota

Sunday, December 19th, 2010

The StarTribune.com of December 18, 2010, reports that Washington County set out to acquire 20 acres of land owned by TMT Land V, LLC, and deposited $46,000. But after trial, the jury awarded $380,658, or over eight times the county’s offer. Now, the Minnesota Court of Appeals has ruled that the county also has to pay interest at the rate of 10%, which according to the owner’s lawyer will come to “several tens of thousands of dollrs.”

For the full StarTribune.com sory go to http://www.startribune.com/local/east/111886029.html?elr=KArks:DCiUHc3E7_V_nDaycUiD3aPc:_Yyc:aUnDayc_MDCi_oO4aDk87EaDUr

Words to Ponder

Saturday, December 18th, 2010

We offer these thoughts of Professor Glenn Harlan Reynolds. Read and reflect on the fact that, barring natural cataclysmic events, social changes for the worse take time to register.

“Part of the American Dream was the expectation that if you started a business, you might go broke but you didn’t have to worry about the government seizing your business on behalf of those with more political juice. That sort of thing was for Third World countries, corrupt kleptocracies where connections mattered more than capability.

Not anymore. In fact, some of those formerly corrupt Third World countries have started providing stronger protection for private property, as they’ve realized that the more power you give to politicians and their cronies, the less incentive people have to try to succeed through hard work. What’s the point, if you’re at the mercy of the cronies?

 We, on the other hand, seem to be moving backward.

 The fact is the powerful and connected — the Bloombergs, the Bollingers, et al — don’t really need strong legal protections. Nobody’s going to take their property anyway. (When’s the last time you heard of a rich guy’s home being condemned?) For those with juice, things seldom get as far as the courts.

 The courts are supposed to be there to protect the rest: The people without the connections, the ones who depend on the rule of law to keep the predators away.

 That protection has never been perfect, of course, but in the area of eminent domain it’s become a sick joke. The message sent is that your property belongs to you — until somebody with more clout wants it for something else, be it a “vision,” or a moneymaking scheme.

 Of course, this whole rule-of-law thing works both ways. Those politicians and their cronies are quick to rely on legal protections when their own interests are threatened by people outside the political system. But by undermining the property rights of the unconnected, they weaken the social contract that protects their own positions.

 As with our actual currency, our political class has debased the moral currency by which it governs, as well. May they have joy of the results.

 For Reynolds’ entire New York Post article go to: http://www.nypost.com/p/news/opinion/opedcolumnists/columbia_vs_the_little_guy_1Kx7nuGlUH2Pzvc4mwGvhK#ixzz18U3y2Pb6

 Reynolds rightly criticizes politicians and their cronies, but at least those worthies are acting in their own economic self-interest, and when challeneged can respond by saying “what we do is legal — the courts say so.” But what’s the judges’ excuse?

Sad But Dependable News for the Bald: SCOTUS Nixes Review of the New York Manhattanville Eminent Domain Case

Tuesday, December 14th, 2010

Unsurprisingly, the U.S. Supreme Court denied certiorari in the Manhattanville case on December 10, 2010. That’s the one where New York took an entire neighborhood for the benefit of Columbia University, and where the condemnor’s decision to take was tainted by all sorts of irregularities. We can’t say we are surprised with this result, but that still leaves open the question of why? Why has the court ceased to be interested in the takings field so abruptly? That can only be the subject of speculation. Here is ours.

Something happened after the court’s recent venture into this field. First, after mucking around with the question of regulatory takings all through the 1980s, and after screwing things up in a monumental fashion, the court gave up and withdrew from that field of law, as evidenced by the San Remo Hotel case. If you are interested in our detailed view of that problem, see Gideon Kanner, Hunting the Snark, Not the Quark: Has the U.S. Supreme Court Been Competenet in Its Effort to Formulate Coherent Regulatoty Takings Law? 30 Urban Lawyer 307 (Spring 1998).

Ditto for direct condemnation. This took the form of the Kelo case which stimulated even more criticism of the court’s handiwork. Though Kelo noted a few potential limitations on the exercise of the power of eminent domain, particularly in Justice Kennedy’s concurring opinion (which, given the 4 to 4 to 1 split, is the opinion of the court), the court has never applied them in spite of having had opportunities to do so. For our detailed view of that mess see Gideon Kanner, Kelo v. New London: Bad Law, Bad Policy and Bad Judgment, 38 Urban Lawyer 201 (Spring 2006).

Bottom line: the Justices have been so scalded by the justified public reaction to their wretched handiwork in this field that they have decided to stay out of it. We don’t see much of a chance of correction of this situation in the near future. It seems to us that the justices have concluded that this field of law is a lose-lose situation for them. They lack the five votes that are necessary to articulate any kind of coherent, balanced legal doctrine that litigants and lower courts can reliably use in future cases, so being unable to rectify the mess of their creation, they decided to leave this subject alone because messing with it further, given the court’s composition, can only make things worse.

So it all boils down to the bon mot of the late Bert Burgoyne, a distinguished Detroit eminent domain lawyer, who once observed that the problem with the field of eminent domain is that liberal judges don’t believe in private property rights and conservative judges don’t believe in making the government pay. So between the two of them, we have a hard row to hoe.

Lowball Watch – Massachusetts

Sunday, December 12th, 2010

The Sun Chronicle reports that the Attleboro Redevelopment Agency took local property for which it deposited $207,000. But when the case went to trial, a jury awarded just compensation of $893,000, plus $124,006.87 in interests. George W. Rhodes, City May Face $1 M Lawsuit, The Sun Chronicle, December 12, 2010. http://www.thesunchronicle.com/articles/2010/12/11/news/8529682.prt

Now comes the wrinkle. The Sun Chronicle reports that the Agency has not paid the judgment, and the owners have now filed a lawsuit against the city, seeking payment of the $957,006.87 still owed them. The city contends that it is a separate entity from the Redevelopment Agency, and disclaims responsibility for the Agency’s obligation to pay.

Stay tuned.

A Musical Comedy About the Atlantic Yards Case? Yep. That’s New York For You.

Thursday, December 9th, 2010

The New York Times reports that some creative folks in Brooklyn have produced a musical comedy about the Goldstein v. Pataki controversy, a.k.a. the Brooklyn Atlantic Yards redevelopment project in which the courts have permitted the taking and displacememt of a Brooklyn neighborhood in order to facilitate the plans of Bruce Ratner, a mega-developer. It’s called In the Footprint: The Battle Over Atlantic Yards. The inspiration for this musical was the eminent domain case in which the state agency (ESDC) took an entire Brooklyn neighborhood by eminent domain, displaced its occupants, and turned the land over to good ol’ Bruce so he can build a new stadium for the Nets so they can move from New Jersey to Brooklyn.

The plans for the project also include a whole bunch of high rises — all for Ratner’s private gain. That’s what is called “public use” in America, at least if you listen to the New York state and federal courts, and to the New York Times which has a conflict of interest because the midtown Manhattan building in which its operations are housed sits on land that was taken by eminent domain from its rightful owners, razed, and then turned over to — guess who? The selfsame Bruce Ratner who built a high rise buiding housing the Times. Surprise, surprise! What a coincidence. As for us, we call this sort of stuff kleptocracy.

But, like it or not, In the Footprint appears to be a real musical comedy, compleat with a New York Times review (see Charles Isherwood, A Brooklyn Civics Lesson, Offered in Word and Song, N.Y. Times, Nov. 23, 2010). Go to http://theater.nytimes.com/2010/11/24/theater/reviews/24footprint.html?pagewanted=print

We won’t attempt to summarize Isherwood’s review because it’s more about the production and the acting than about the story, and no matter how well or how poorly acted, the story stinks. Besides, we haven’t seen this production (and it’s unlikely that we will journey to Brooklyn to take it in), so what’s the point? Better you should read it for yourself.

We bring it to your attention, because — like the man said about Mount Everest — it’s there, and this wretched instance of abuse of government power indulged in for the benefit of a local giga-millionnaire may as well be memorialized in song. We doubt that this performance rises to the lofty heights of social satire like that old British vaudeville song, “They’re Movin’ Father’s Grave to Build a Sewer,” that was nicely performed by the Clancy Brothers and is still available on a CD, should you wish to hear it — and we recomment that you do.


The purpose of this blog is to provide a forum for people, whether eminent domain professionals or not, for exchange of ideas and a discussion of eminent domain news and issues. It does not provide legal advice. Questions concerning actual cases should be directed to the readers' own legal, appraisal and real estate advisers.

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