Archive for April, 2011

Dispatch From the Renewable Resources Front

Thursday, April 28th, 2011

As you no doubt know, the use of solar panels is high on the list of things favored  by  folks who want to reduce our petroleum dependency and diminish our carbon dioxide footprint. Basically, that sounds like a good idea. In theory. But if you want to put it in effect you have to contend with the NIMBYs.

A dispatch in today’s New York Times (Minerva Navarro, Solar Panels Rise Pole by Pole, Followed by Gasps of “Eyesore,” April28, 2011, at p. A1) informs us of what happened when New Jersey utilities started installing solar panels on electrical poles to increase generation of clean electrical power. Sounds good to us. But what do we know?

It turns out that the local folks are up in arms about that; they are aghast at the “ugliness” and “hideousness” of it. Mind you, this is not a case of installation of new utility poles. Rather, those solar panels are being mounted on existing ones, so with all due respect to NIMBY sensitivities, their impact cannot be all that great.

But hey man, it’s modern America where everybody wants to go to Heaven but nobody wants to die.

For the full Times article go to here.

 

 

L.A. Times Comes Out in Favor of – Gasp! — Private Property Rights

Wednesday, April 27th, 2011

Forgive us, dear readers, but your faithful servant has to lie down for a bit to recover from the shock. None other than the Los Angeles Times, the usual haven of NIMBYism, has come out editorially in favor of — dare we say it? — private property rights. And not just any ol’ property rights, but property rights in what is usually referred to around here as “unspoiled” land.

It seems that a fellow named Mohamed Hadid acquired some land near the picturesque Franklin Canyon Park in the mountains near — where else? — Beverly Hills, and evidently being a rational sort, wants to build some homes there, for which this land is zoned. Ah, but this displeases local NIMBYs who over the years have been using it for hiking and other recreational activities. So the NIMBYs feel that by their use of Hadid’s land over the years a trail easement has been established by prescription. But wait. There is a moral dimension to this. Quoth the Times: “Even though that may be true, we don’t think it’s right. This is Hadid’s land; his and the previous owners’ generosity in allowing others to use it up to this point shouldn’t be repaid by lawsuits or by requiring him to give up or sell his land.” Editorial, Franklin Canyon Hikers: Treading on Private Property, L.A. Times, April 27, 2011. Go to here.

Wow! What will they think of next down at Times-Mirror Square?

You don’t suppose the Times will now further develop its newfound respect for private property rights outside of Beverly Hills, like in the context of, say, the doings of the California Coastal Commission, those wonderful folks who at times tend to confuse the regulatoty state police power with the power of a police state, do you? Or with regard to the California courts that were aptly characterized by the dean of the nation’s land-use bar, the late Richard Babcock, when he observed that “In California, the courts have elevated government arrogance to an art form.” We may be wrong on that, but we don’t recall the Times ever railing against regulatory abuses of property rights before. Is the Times being born again?

So stay tuned and see how Hadid’s saga turns out. In the meantime, you may gain a more realistic idea of what California land-use law is like with regard to nice guys who let others use their land, by perusing Michael M. Berger’s, Nice Guys Finish Last – At Least They Lose Their Property, 8 Cal. West. L. Rev. 75 (1975).

The Curse of Chavez Ravine

Tuesday, April 26th, 2011

The recent take-over of the L.A. Dodgers by the Baseball Commissioner, in the wake of financial problems revealed by the divorce battle of the McCourts, the Dodgers’ current owners, understandably inspired the spilling of much printer’s ink on the sub ject of  ”dem Bums” (as they used to be called at times when still in Brooklyn), their ups and downs as a baseball team, and their famous players like Jackie Robinson (who broke the “color line” in major league baseball), or Sandy Koufax who, a la  The Chariots of Fire,  provided us with a real-life depiction of a celebrated athlete who wouldn’t compete on a religious holiday. But as we read all that nostalgic and highly entertaining stuff, we noted something that was conspicuous by its absence: how Dodger Stadium got to be built at its present location by the destruction of a modest Mexican community in Chavez Ravine, whose homes were taken by eminent domain to make room for the ballpark to sweeten the deal involving the Dodgers’ move from Brooklyn to the West Coast. To us at least, this is  a story worth telling. So here goes.

Chavez Ravine, located near the intersection of the Hollywood and Pasadena Freeways, close to the famous four-level freeway “stack” in downtown Los Angeles, became the target of planners in the early 1950s. They decided that it was just the place to erect one of those hideous multi-story apartment buildings for the poor under the banner of “public housing.” Of course, as we know now, those things proved to be an urban disaster. Two of the more famous (or is it notorious) ones — Cabrini in Chicago and Pruitt-Igoe in St. Louis – had to be demolished because, with the passage of time they had become hellholes, rife with poverty, drugs and other crimes.

But in the 1950s all that still lay in the future, so the Los Angeles do-gooders proceded to acquire what they thought would be a suitable site in Chavez Ravine. They did so by filing an action in eminent domain to displace a small, modest Mexican community.  Have you noticed how the burdens of  these glorious monuments to urban revival somehow always fall with particular harshness on downtrodden folks? Like in the case of old Chinatown that once sat on land now occupied by the Union Station?

The Chavez Ravine caper purported to be a high-glitz operation, compleat with federal grant money and the services of famous architect Richard Neutra who was going to transform Chavez Ravine into “Elysian Park Heights.” [Note to flatlanders who are unfamiliar with Los Angeles or who never venture east of Sepulveda Boulevard: Chavez Ravine is located right next to the city Elysian Park.] It sounded good but it didn’t work out.

The Los Angeles conservative Establishment, so goes the story, was opposed to “socialist housing,” and kept on fighting the project. Long story short, after the city acquired Chavez Ravine, plans for the public housing project were abandoned. The land sat there until the late 1950s when it was given by the city to the Dodgers in exchange for a dinky minor-league ballpark that the Dodgers already owned, and Dodger stadium was built. Most of those Mexican families capitulated to the city and moved out,  but not the Arechigas. They stayed put and did not move out until the L.A. Sheriff’s Deputies forced them out in a mano a mano confrontation. Another resident, Aurora Vargas also resisted and had to be carried out, a heinous offense for which she was convicted and jailed. Dodger Stadium opened in 1962.

But the Arechigas were not ready to give up without a legal fight.  After it became clear that their former land, taken from them for public housing, would be devoted to an entirely different use, to wit a baseball stadium (which in those days might not have passed muster as a constitutionally permissible “public use”) they sued. Alas, the courts turned them down. See Arechiga v. Housing Authority, 159 Cal.App.2d 657 (1958), and 183 Cal.App.2d 835 (1960). Their principled fight became a footnote in the wretched history of eminent domain law which holds that once a condemnor acquires title to private property by eminent domain, it is not bound to put it to the ”public” uses for which it was taken, not even when the property is acquired by the government by extrinsic fraud. In other words, the condemnor’s representations to the courts as to the “public use” for which the subject land is being acquired, aren’t worth the paper they are written on.  If you are interested in that depressing subject, check out our article, We Don’t Have to Follow Any Stinkin’ Planning — Sorry About That, Justice Stevens, 39 Urban Lawyer 529 (2007).

So what’s the moral of all this? Actually, there are two. First, there appears to be an eminent domain angle to just about everything that makes the news. Second, if you are into morality and cosmic justice, all the troubles that are befalling the Dodgers’ owners and their team (which hasn’t won a World Series or even a pennant for God knows how long) may be nothing more than delayed divine justice. The Good Book has it that the Lord takes his time in exacting retribution from those who transgress His laws by abusing the sovereign power of eminent domain, but eventually He gets around to it. You don’t believe us? Check out I Kings 22:1-29 which tells the story of wicked King Ahab who wrongfully seized the vineyard of his subject Naboth for his own use, and had Naboth killed through the use of perjured testimony instigated by his wicked wife, Jezebel. Prophet Elijah, having been fully informed in the premises by the Lord himself, informed Ahab that he was in deep doo-doo with the Lord for his wickedness in treating Naboth the way he did. While the Lord kept this part from Ahab, he disclosed to Elijah that because Ahab had humbled himself before the Lord after he learned of the Lord’s displeasure, “I will not bring the evil upon [Ahab in his] days: but in his sons’s days will I bring the evil upon his house.” I Kings 22:29. And so He did in His own good time; see I Kings 22:34-35. And Jezebel got hers too, just as the Lord foretold; see 2 Kings 9:33-35.

So maybe the taking of the Chavez ravine land for the Dodgers from the  Arechigas for $10,500 did not rise to the level of biblical wickedness. But it didn’t pass moral muster either, and there is a distinct whiff of divine retribution implicit in the Dodgers’ ongoing troubles. Call it what you want. We call it the curse of Chavez Ravine.

And if you are interested in how it should be done; how a virtuous sovereign deals with his subjects whose land he desires for a genuine public use, check out the biblical story of King David and Ornan whose threshing floor the King was commanded by the Lord to take as the site for the ark of the covenant. See I Chronicles 21:18-25.  Ornan was understandably frightened by the royal demand, and not only offered the land to the King for free, but also offered to throw in his farm implements and meat for a burned offering. But King David would have none of that. He responded: “Nay, but I will verily buy it for the full price: for I will not take that which is thine for the Lord, nor offer burnt offerings without cost. So David gave to Ornan for the place six hundred shekels of gold by weight.”

High Speed Rail Boondoggle (Cont’d.)

Tuesday, April 26th, 2011

From time to time we have commented on the high-speed rail boondoggle. It’s not that we think trains, including high-speed trains, are bad. Rather, they are good when they are properly routed where their efficient usage stands a chance of coming close to achieving reasonable passenger ridership figures, and in the best of worlds being economically self-sustaining. In other words, they may make sense in the densely populated Northeastern Boston-Washington corridor, but not in the middle of nowhere, in California’s Central Valley where the first segment of our high-speed rail line is scheduled to be built.  For our most recent commentary on the high-speed rail boondoggle, go to http://gideonstrumpet.info/?p=904

Now, in spite of all the hype,  the bloom seems to be off high-speed rail. The title of a recent Los Angeles Times op-ed says it all (James E. Moore II, Federal Funds Are Drying Up For California’s project, and That’s a Good Thing, L.A. Times, April 25, 2011, at p. A11)

There is also an op-ed in the New York Times (Richard White, Fast Train to Nowhere, April 24, 2011, at p. 9 (Week in Review Sec.). This one is particularly useful because it reminds us that the 19th century rail-building program promised much but underdelivered, and was rife with abuses and profligacy. It brought a wave of eminent domain takings that  in the long run have done much harm, because acting in the name of progress, American judges  favored railroad construction and formulated stingy compensability rules in eminent domain, some of which are still with us. In the 19th century it appeared that these rules did little harm because takings were largely of easements across unimproved farm land and caused few, if any, collateral losses to the condemnees. But when those rules were unthinkingly applied to mass urban condemnations of the second half of the 20th century, that displaced hundreds of thousands of urban dwellers annually, it was an altogether different story. 

If you want an insight into those 19th century practices, we recommend the introductory part of volume 1 of John Sherman’s memoirs, published in 1896, describing railroad condemnation practices in Ohio before the Civil War, in which he was involved a railroad lawyer.

To return to modern times, it now turns out that the Chinese high-speed trains that have been held out by President Obama as models for our own are actually a disaster. The Washington Post reports that far from being the harbinger of future transportation, they have been a flop. (Charles Lane, China’s Train Wreck, Wash. Post, April 22, 2011). The Chinese high-speed rail program has become a “financial and public relations disaster.” Bottom line: The Chinese high-speed rail program has run up a $271 billion debt, and its ”bullet trains” are being operated at 30 mph.

We also learn from this article that in France (also held out as a model for us) only the Paris-Lyon high-speed rail line is operating in the black.

Follow up. Remember Bruce Babbit? Sure you do. Former Secretary of the Interior and apostle for environmentalism, and all that good stuff. He is quoted in At Lincoln House, a publication of the Lincoln Institute for Land Policy as follows:

“Bruce Babbitt, former governor of Arizona and interior secretary, and a member of the Lincoln Institute board, said the Obama administration’s campaign for high-speed inter-city rail was a “total disaster,” manifested in the failed Tampa-Orlando plan. “We don’t have the political courage to define our priorities,” he said, suggesting that the Northeast corridor should be the model, based on a system of reliable financing similar to how the nation built the interstate highway system.” At Lincoln House, March 2011.

If you are not familiar with it, At Lincoln House is a publication of the Lincoln Institute on Land Policy, a think tank in Cambridge Massachusetts, devoted to land-use and property taxation. Its name has nothing to do with Honest Abe — it is named after John Lincoln, a clever fellow who invented the arc welder, and had the wits to do so before the income tax, which enabled him to do good works on a grand scale, and he just happened to be interested in land and its use.

Whatever Happpened to that New London “Charette”?

Sunday, April 24th, 2011

You may recall our post of April 21, 2011, about how the City of New London – one of the all-time champions in the redevelopment/eminent domain screw-up derby, was pondering new horizons by consulting the Great Unwashed about what ought to be built at Fort Trumbull, the site of that big time municipal disaster popularly known as the case of Kelo v. New London.  (Go to http://gideonstrumpet.info/?p=1013 ), That, as you probably know, was the case in which the U.S. Supreme Court, by a vote of 5 to 4, managed to PO some 90% of the country’s population when it held that the city of New London could take by eminent domain an entire unoffending, unblighted lower middle-class neighborhood, kick out its long-time inhabitants, raze it to the ground, and turn its site over for a buck per year to a developer who — so went the plan — would build all sorts of residential and commercial goodies for the delectation of well-paid professional employees of the nearby Pfizer pharmaceutical company research center. All this was supposed to do wonders for New London by way of upgrading the community and increasing tax revenues.

But, alas, nothing of the sort happened. The developer, in spite of the freebie land, couldn’t even get financing (even before the crash of 2008), the redevelopment project turned out to be a total bust, and adding insult to injury, Pfizer announced that it is shutting down its New London facility altogether and leaving town, taking some 1400 jobs with it, and leaving the city and the State of Connecticut holding the bag to the tune of at least $80,000,000 — and probably substantially more (we have seen estimates running as high as twice that figure.

So Fort Trumbull, the 91-acre site of that municipal and moral disaster has been sitting vacant for the past five years, doing no one any good and depriving the city of taxes on that land which, being now publicly owned, is not taxed. And so, as we reported, the city held that “charette” which is French for a bunch of local folks with no discernible qualifications in city planning, getting together to munch on cookies, sip on lemonade, and BS about how in their collective opinion a particular area should be developed. Unsurprisingly, the attendees came up with all sorts of wonderful things for that land, including a facility for cruise ship docking (no, we are not making that up), even though, if press reports are to be believed, there was no mention of the cost off all those goodies.

We were just getting outfitted for some new, fashionable nautical duds in contemplation of taking a cruise on the QE 2 out of New London, when — guess what? — THE DAY, the New London newspaper, has brought us the dispatch that, instead, it’s back to the drawing board with a local developer who is talking about “clusters of attractive Greek Revival and Italianate units with inconspicuous garages and ample green space.” See Editorial, Developing Fort Trumbull, April 23, 2011 – http://www.theday.com/article/20110423/Op01/304239968

Of course, all that leaves open the sordid question of money: who is going to pay for all these goodies — those Italianate Greek Revival thingies don’t come cheap, you know. The answer to that question — if that is what it is — is: freebies. Quoth THE DAY: “[T]he developers are virtually getting the property free.” And on top of that “they will be asking for some sort of tax abatement. Without one, they say the project might not be feasible.” Oh dear.

So stay tuned, folks. New London took these properties in the year 2000, and we started writing about that disaster in 2006. That’s a total of five or eleven years depending on how you choose to count, and so far nothing has been built on the Fort Trumbull redevelopment site. Either way you count, it may be useful to recall that it took us a mere four years to fight and win World War II. So is the New London caper good enough for government work? We don’t think so.

Hawaiian Stories – Cont’d.

Saturday, April 23rd, 2011

In the preceding obituary of Jess Jackson, noting his prowess as an eminent domain lawyer before he became a vintner of Kendall-Jackson fame, we made some observations about the wretched Kaiser Development case, that Jess and your faithful servant handled in Hawaii in 1990. That caused additional information to trickle in, and we are now able to beef up our unkind assessment of that litigation with some additional data.

We already noted that after that case was over, Honolulu filed a condemnation action to take Queen’s Beach from the Bishop estate and deposited $11.6 million. This, we learn, came to 87 cents/square foot, which makes that offer a clear lowball. Using that pricing, you could buy a 10,000 sq. ft. beachfront lot — and what a beach! — for $8,700. Need we say more?

So a question virtually asks itself: since Honolulu did intend to acquire Queen’s Beach, why didn’t it just make an offer and file an eminent domain action if necessary, as required by the Uniform Relocation Assistance Act, instead of attempting extortion and going through that tortuous inverse condemnation litigation that in the end must have cost the city a pretty penny but gained the city nothing because it de facto conceded the fight by later filing its direct condemnation action? Did the powers that be in City Hall actually believe that the city could steal Queen’s Beach? You tell us.

For the complete Honolulu Star-Bulletin article reporting the filing of the direct condemnation action to take Queen’s Beach (now known as Ka Iwi) go to

http://archives.starbulletin.com/98/02/10/news/story2.html

Follow up. This condemnation action eventually settled for $12.8 million (evidently consisting of the deposit, plus interest), even though the Bishop Estate/Kamehameha Schools properly thought its fair value was $80 million. The  condemnation action settled for less because, as reported by the Honolulu Advertiser, the land had been downzoned (evidently in anticipation of the condemnation, which is illegal — the constitutional “just compensation” clause contemplates fair market value undiminished by the anticipation of the condemnation).  The division of the settlement amount was $8.12 million to Bishop Estate/Kamehameha Schools, plus 70% of the interest earned on the $11.6 million deposit. Kaiser Development got $3.48 million, plus 30% of that interest. Kaiser was in the picture because it had a contract to develop the subject property into a golf course.

The settlement resulted in state acquisition of 30 acres, the last part of the larger, 316-acre beach area. In a bit of fiscal legerdemain, $5.6 million of the settlement fund came from federal highway funds. Go figure.

For the Honolulu Advertiser story (State’s Purchase of Ka Iwi Will Preserve Shoreline, June 27, 2001) go to http://the.honoluluadvertiser.com/articla/2001/Jun27/In/In02a.html

Historical note. So it looks like the poor Hawaiians got screwed out of their land once again. Remember that the Bishop Estate/Kamehameha Schools is not a commercial venture like the other Hawaiian “missionary trusts.” It is a charitable trust created by Princess Bernice Pauahi Bishop, the last member of Hawaiian Royalty, when she left the remnant of royal Hawaiian crown land (which she held in trust for the Hawaiian people) to the trust, to be used in perpetuity to generate income with which to fund the Kamehameha Schools for Hawaiian children. So the Estate got lowballed so that visiting haoles and local NIMBYs can enjoy Queen’s Beach.

Next time you are in Hawaii, you can see a bronze statue of the Princess in the Royal Hawaiian Shopping Center on Kalakaua Avenue in Honolulu.

Good Guys Win in California

Friday, April 22nd, 2011

We haven’t read the court’s statement of decision yet, but it appears that the good guys at the Institute for Justice have scored another victory for the other good guys — the beleaguered property owners in National City, California.

A California trial court has ruled that the redevelopment agency of National City failed to establish that the subject property was blighted and as such subject to redevelopment. This is a particularly morally satisfying decision because the subject property has been used as a boxing club catering to poor kids in the area and its taking would deprive them of a recreational opportunity.

We should note that this is not the first time that National City got its knuckles rapped. In Sweetwater Valley Civic Ass’n. v. City of National City, 18 Cal.3d 270 (1976), the California Supreme Court held that National City’s attempt to “redevelop” a golf course into a shopping mall was improper, holding also that in establishing blight a city must demonstrate that the subject property is presently blighted, and the city’s argument that its proposed [re]development would make the subject property better was insufficient to demonstrate that the golf course was blighted as of the time of taking.

So it looks like the bad guys in this matter have not learned their lesson. But then again, as one of our favorite lines goes: hey, man – it’s California. So who knows what the appellate courts will say? Let’s stay tuned and hope for the best.

Follow up. This news item has made its way onto the Associated Press wire service, from which we learn that ”

“National City wanted to make way for a 24-story, mixed-use condominium project that has since been derailed.”

And so, another redevelopment project bites the dust.

Jess Stonestreet Jackson, R.I.P.

Thursday, April 21st, 2011

Jess S. Jackson, who just passed away at the age of 81, is best known as the producer of Kendall-Jackson wines. But before he started stomping grapes for a living, and making a name for himself as a vintner, he was a condemnation lawyer in Burlingame, California. Your faithful servant worked with him regularly on eminent domain and inverse condemnation cases before he turned to wine making. No doubt, the obituary industry will have much to say about him, his wines and his race horses, but we doubt that it will do justice to him as a condemnation lawyer who tried some of the most interesting cases.

Jess was the onliest lawyer known to us — at least in California — who actually recovered a money judgment for his client in an inverse condemnation case, on a substantive due process theory.  Which, if you understand this business, you will undoubtedly rank as quite an achievement. In Herrington v. Sonoma County, 834 F.2d 1488 (9th Cir. 1988) Jess obtained a jury verdict of $2,500,600, but did so on a denial-of-due-process theory. Though the complaint included a regulatory taking claim, Jess had the wits to drop it in mid-trial and proceed to verdict on the due process claim. The Court of Appeals agreed that there was county liability but thought the damages were excessive and remanded the case for a retrial of those.

One day, Jess had an epiphany (or as a mutual friend once put it, a world-class identity crisis) and switched occupations. We worked together on some cases at the time, and one day the realization dawned that he was getting harder and harder to get ahold of on the phone. Further inquiry revealed that he was spending more time on the road, drumming wine. Legend has it that during the Reagan administration, Nancy Reagan decided to serve a California wine at a White House state dinner. Kendall-Jackson Chardonnay was chosen, and it was evidently a hit with the diners, which put Jess on the map big time. The rest, as they say, is history.

Last time Jess and your faithful servant were on a case together, was around 1990,  in an inverse condemnation case in Hawaii, in which his office represented Kaiser Development Co. while we toiled in the vineyards of the Bishop Estate. It was an outrageous case in which the city of Honolulu tried to blackmail the estate out of its land in Hawai’i Kai, on pain of denying development approvals elsewhere. But the federal courts didn’t buy our arguments. Even though the city pretty much conceded that it had been routinely violating the Nollan exaction-limiting rule, the court ruled against us. You can see the opinion for yourself: Kaiser Development Co. v. Honolulu, 898 F.2d 112 (9th Cir. 1990). Although the court took about a year-and-a-half to decide the case, it produced an opinion that in its entirety takes up about a page or two, discusses none of the parties’ contentions, mentions no evidence, and after a bunch of string citations supporting respectively each side to this controversy, concludes that the trial judge was right in granting a directed defense verdict. As a knowledgeable friend put it: “This  is the only opinion I have ever seen that stands for no discernible proposition of law whatever.” The court also filed a second opinion (now appearing at 913 F.3d 573) which was originally unpublished, in which it addressed some of the issues, concluding, not that our claim was bad, but that we hadn’t presented our claim “separately.” Go figure.

Anyway, the important human element of this story is that when the case was argued before the Ninth Circuit in Honolulu, the actual argument on behalf of Kaiser was delivered by Jess’s wife, Barbara Banke, while Jess sat outside the courtroom, playing with their new baby.  By then his heart was evidently with his new business.

So Jess is gone. At least it would so appear. But we have a hunch that  even now he may be in the process of obtaining a TRO from the Big Court in the Sky, enjoining the angel of death from interfering with his efforts in his latest venture. While he was alive, you just didn’t mess around with Jess Jackson, and we wouldn’t be surprised if he puts up a fight now.

R.I.P. Jess.

Follow up. For another insight into Jess Jackson as an eminent domain lawyer, go to www.inversecondemnation.com and check out today’s post.

Second follow up. Our spies in the Sandwich Islands inform us that eventually the city, being unable to steal Queen’s Beach, filed a condemnation action to take it, and deposited $11.6 million — which, given values of beachfront land out there, was a joke.  We are hot on the trail of information about the amount of the eventual settlement, and will pass it on as soon as we get it. Oh yes, in the process we learned that the term “Queen’s Beach” is too, too politically incorrect, so the subject property is now known as Ka Iwi.

Aloha.

Should the Courts Help Los Angeles Commit Fiscal Suicide?

Sunday, April 17th, 2011

            The juxtaposition of two recent news items makes one wonder if Los Angeles has at long last gone around the bend. First, the ongoing budget disaster. According to the Los Angeles Times, Mayor Villaraigosa acknowledges the enormous financial challenge that the city faces, and pledges to deliver a solution. But even as Hizzoner spoke to the Times, the city was hard at work blowing a quarter of a billion dollars on a project that the court found does not serve any public use and follows no city plan. You don’t believe us, do you? That couldn’t happen, you think, certainly not in today’s economy, could it? Well, it could, it did and it is happening even as we write.

            Take a look at a brand-new opinion of the Court of Appeal in City of Los Angeles v. Superior Court (Plotkin), No. B225082, filed on April 12, 2011. The controversy was a variant of the Klopping problem (after Klopping v. City of Whittier, 8 Cal.3d 39 (1972)). Those are cases where a city targets land for acquisition, and engages in inequitable conduct as a prelude to the de jure taking in order to lower values. The government repertoire of such techniques can be large. See Detroit v. Cassese, 136 N.W.2d 896, 899-900 (Mich. 1965) for a 10-item list of various municipal harassing techniques ranging from just announcing the intention to acquire an area (see Luber v. Milwaukee, 177 N.W.2d 380 (Wis. 1970), and letting the market’s reaction and the passage of time take care of the rest. See Peacock v. Sacramento County, 271 Cal.App.2d 845 (1969). Or, a city can give the market a little “help” by imposition of unsuitable zoning (Kissinger v. Los Angeles, 161 Cal.App.2d 454 (1958)), renovation permit denials, stepped-up level of persnickety building code inspections, encouraging tenants to stay away (People v. Peninsula Enterprises, Inc., 91 Cal.App.3d 332 (1979)), etc. We are sure you get the idea. There were even cases in the Midwest where cities withheld police protection and trash pickup from the targeted areas.

          In the Plotkin case the city razed buildings it had acquired in the targeted area near LAX,  leaving some up and using them for fire department drills and movie shoots. The obvious point of these techniques, whichever ones are used, is  to stigmatize the area, and make its residents understand the hard way, that they had best sell to the city at whatever price the city offers and get on with their lives elsewhere. You can find this subject dealt with at length in our article Condemnation Blight: Just How Just Is Just Compensation? 48 Notre Dame L. Rev. 765 (1973) which received the Shattuck Prize from the American Institute of Real Estate Appraisers (now the Appraisal Institute).

            Such abuses were all the rage in the 1960s among Midwestern redevelopment agencies, notably in Michigan and Ohio; see Detroit v. Cassese, supra, Cleveland v. Carcione, 190 N.E.2d 52 (Ohio 1963), Foster v. Herley, 330 F.2d 87 (6th Cir. 1964) Thomas W. Garland, Inc. v. St. Louis, 596 F.2d 784 (8th Cir. 1979), Amen v. Dearborn, 718 F.2d 789 (6th Cir. 1983). In Pennsylvania it was  Conroy-Prugh Glass Co. v. Commonwealth D.O.T., 321 A.2d 598 (Pa. 1974) and in Oregon, Lincoln Loan v. State Highway Com’n., 545 P.2d 105 (Ore. 1976).  And it happened in California too; see Richmond Elks Hall Assn. v. Richmond, 561 F.2d 1327  (9th Cir. 1977), and People v. Peninsula Enterprises Inc., 91 Cal.App.3d 332 (1979) (discouraging tenants from signing leases). The manifest purpose behind these various strategies is the same: to lower values and to encourage residents of the targeted area to sell for a song and then move elsewhere.  It was a lucrative racket for the condemning agencies until the federal courts put a stop to it in Foster v. Detroit, thereby setting a widely-followed precedent.

             The problem with such “voluntary” transactions, ostensibly without use of eminent domain, is that they are not really voluntary. Let ’s be serious here. If the city razes your block but leaves a vacant building down the street, and uses it occasionally for fire department drills and movie shoots, would you want to continue living there? No? Neither would we, and neither would any rational person. So tenants leave in droves and rent revenues shrivel, forcing landlords to the wall. Now imagine that at this point in this hypothetical story, a fellow with a clipboard knocks on the door, and utters that famous line: “I’m from the government and I am here to help you.” Uh-oh. The “help” turns out to be the city’s willingness to take your now-blighted place off your hands. And this is where the fun begins. The Plotkin opinion is silent on this point, but we would be willing to bet a fine cigar that the city offers under these circumstances likely fell short of the “highest price” specified in California Code of Civil Procedure § 1263.320 as the measure of fair market value (unaffected by the city’s acquisitory plans) that meets the constitutional “just compensation” requirement.

            But in this case, when confronted with the Plotkins’ claim for compensation, the city did something strange. Its response was “Who? Us?” It somehow persuaded the court of appeal that  it was moved by altruism: out of the goodness of its municipal heart, it was only trying to relieve local residents of the burdens of living with excessive aircraft noise emanating from LAX, by relieving them of their homes. 

            This municipal goodness shtick is rather hard to swallow because, first, cities that run airports are responsible for acquisition of adequate buffer zones (Griggs v. Allegheny County, 369 U.S. 84, 89-90 (1962)). Second, the city admitted in discovery that it is spending a quarter of a billion dollars on this caper with no plan in mind. And yet, the Plotkin opinion is explicit that the city was within its rights to assemble all that land near LAX for no particular public use. In the court’s words, “the city had ‘no plan’ for the properties it [had] acquired” and planned to acquire. If you believe that this is indeed the city’s true motivation, get in touch; we may have a great deal for you on the Brooklyn Bridge.

            And so, the question virtually asks itself: does Mayor Villaraigosa and his budget-mending helpers know about all this? Does he realize that even as he assures the voters that the city is doing its best, and struggles to plug the gaping holes in the municipal budget, LAX is blowing a cool quarter of a billion on some hare-brained, unplanned land assemblage scheme? 

            And that brings us to a painful question: How did the city manage to persuade the court, consisting of bright, civic-minded people, to buy its lame story? Oh sure, all the court did, if you read its holding strictly, was to reverse a summary judgment in favor of the plaintiff-owners, presumably letting them prove their case at a trial on the merits.  But the court did so on legal, not factual, grounds. So how in the world could the court place its imprimatur on the idea that the city was spending a fortune in scarce public funds in the midst of an unprecedented recession, on a major land assemblage serving no public purpose and following no plan? How could the court accept the city’s lame story that it was only being kind to residents of noise-impacted dwellings and relieving them of excessive noise levels emanating from LAX? Wouldn’t that be a public purpose meeting FAA requirements? And above all, how could the court say, as it effectively did, that the creation of a noise buffer zone around LAX was not a “public use”? If the city were to set out to condemn land for such a buffer zone, do you think California courts would deny it the right to do so on grounds of lack of “public use”? If you do, let’s sit down, have a nice cup of espresso and talk about that Brooklyn Bridge deal.

            Unfortunately, this is not the first time that the Los Angeles airport management folks have squandered fortunes in public funds with nothing to show for it. Like for example blowing $170,000,000 in the 1970s on the acquisition of some 19,000 acres of land for the now defunct Los Angeles Intercontinental airport in Palmdale that never got off the ground. Or stubbornly refusing to acquire adequate land to buffer jet operations at LAX in the early 1970s, until forced to do so by the courts (Greater Westchester Homeowners Ass’n v. City of Los Angeles, 26 Cal.3d 86 (1979), Aaron v. City of Los Angeles, 40 Cal.App.3d 471 (1974).

       Bottom line: enough is enough. It’s high time that those who run LAX be brought back to earth and made responsible for contributing to putting the city of Los Angeles on a sound fiscal footing. If the LAX folks have all that money to spare, let them transfer it to the city’s general fund so it can be used to keep the city solvent.  

          And it might not hurt for the courts to realize that we are in the midst of a fiscal calamity, with insolvency of the city of Los Angeles not beyond the realm of possibility, and consider that as a factor in reaching the decision whether LAX should be free to blow hundreds of millions on a land assemblage for which it has no plans and which serves no public purpose. After all, our courts worry that providing indemnity for all demonstrable economic losses inflicted on condemnees will bring about “an embargo” on the creation of public works. See People v. Symons, 54 Cal.2d 855 (1960) and its progeny. Well, if that is a legitimate judicial concern, so is the concern that a public entity is hastening municipal insolvency by blowing fortunes on what it concedes to be a unplanned land buying spree that does not serve any public use.

New Batch of Law Review Articles on Eminent Domain

Saturday, April 16th, 2011

An Albany Law School journal, the Albany Government Law Review, has devoted its current issue (Vol.4, No. 1) to eminent domain. It contains a bunch of articles on that subject, including some by our favorite mavens, including (in the same order as their articles appear) Ilya Somin,  Steven Eagle, Michael Rikon, Amy Lavine and Robert Goldstein. Plus others.

Your faithful servant’s contribution is to give the overworked ”public use” controversy a rest, and provide an article on compensation, entitled “Fairness and Equity,”  or Judicial Bait-and-Switch?: It’s Time to Reform the Law of “Just” Compensation, 4 Alb. Gov’t. L. Rev. 101 (2010). It’s about the ufortunate judicial practice of authoring flowery rhetorical passages about indemnifying condemnees and  paying them “full and perfect” compensation that will leave them in the same position monetarily as if their property had not been taken, but before the ink dries on that stirring prose, awarding ”just” compensation so ingeniously defined that it falls short of indemnifying the vitims for all demonstrable economic losses inflicted on them by  the eminent domain process, and concededly falling short of “fair market value” as determined by the market (as opposed to judicial definition thereof). It’s a good read, if we do say so ourselves, mostly because it begins with Judge Richard Posner’s full confession in writing, to the effect that the judicially touted “just compensation is less than full compensation.” (id. at 101). In our book, Judge Posner is one smart dude, but he falls woefully short in his “explanation” -  if that is what it is – why this unfortunate judicial practice prevails.

The rest is commentary.

To gain immediate access to that issue, without awaiting the output of Mr. Gutenberg’s wonderful invention, go to www.albanygovernmentlawreview.org and click on ISSUES on the toolbar. Enjoy!


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