Archive for February, 2012

Propaganda — How It’s Done

Wednesday, February 29th, 2012

Evidently based on an Associated Press story (click here) reporting House of Representatives’ passage of legislation limiting the sweep of SCOTUS’ controversial Kelo decision of 2005, the blogosphere is full of news stories about it, that begin like this:

“The House sought Tuesday to undercut a 2005  Supreme Court ruling that gives state and local governments eminent domain  authority to seize private property for economic development projects.’

Undercut” the Supreme Court ruling? A court ruling that “gives” state and local authorities authority to seize private property for economic development? No, folks. That’s a mischaracterization of the Kelo holding that misleads the lay reader.

What SCOTUS held was that it is the legislature, not the courts, that has the primary say-so as to what constitutes “public use” within the meaning of the Fifth Amendment’s Taking Clause, so that (a) what the legislature decides in that regard is “well-nigh conclusive,” and (b) legislatures are perfectly free to limit the scope of a state’s eminent domain power and to change the right-to-take law any way they see fit, as long as they don’t violate the “public use” clause of the Fifth Amendment. So in this case the Congress did not “undercut” the court. On the contrary, it exercised its primary prerogative of defining what is “public use.” That is a decision that the courts are required to follow, not the other way around. For a good example, see Eden Memorial Park Ass’n. v. Superior Court, 189 Cal. App. 2d 421 (1961), where the courts denied the California Department of Public Works the right to take by eminent domain a right of way through a cemetery. Why? Because the state legislature had passed a law denying condemnors the right to take cemetery land for rights of way, and the courts were bound by it.

We have no way of knowing whether the AP story is the result of its author’s unfamiliarity with the law of eminent domain, or whether it is motivated by more sinister thoughts. But either way, it is black letter law that when it comes to deciding what sort of property may (or may not) be taken by eminent domain, doing so is a legislative function. So when the legislature exercides that function it isn’t “undercutting” anything; it is governing.

“Buck” Compton R. I. P.

Wednesday, February 29th, 2012

Today’s news informs us that retired California Court of Appeal Justice Lynn “Buck” Compton passed away at the age of 90. Apart from his legal career, he was one of the real-life “Band of Brothers” whose exploits in World War II were depicted in the TV series of that name.  You can get all the details of his heroic war service in his Los Angeles Times obituary by clicking here.  Do so, and do read that obituary that tells the story of a genuine American hero.

We note his passing and pay tribute to his memory, not only because of his outstanding military service, but also to take note of his work as a judge. No, we aren’t going to wax lyrical about the high profile criminal cases in which he was involved, first as a prosecutor and later as a judge. We leave that to the popular press. We do wish to note that “Buck” Compton was one of the few — very few — California appellate judges who would give condemnees an even break, and for that he deservs our, and your thanks. He was tough-looking and blunt, but you knew when you appeared before him on behalf of property owners in an eminent domain case that he would listen to your arguments and give them fair consideration, uinlike so many of his colleagues who made only rudimentary efforts to conceal their disdain for condemnees and their arguments.

R. I. P. Buck.

An Unequal Contest on Housing – Us vs. the Biggies

Saturday, February 25th, 2012

So on one side we find none other than Warren Buffet, plus CNN, Fortune and Money magazine, and on the other side, li’l ol’ us. According to CNN.com/money (click here) Warren Buffet says that “. . . the housing bust was created by the fact that home builders put up homes faster than there were new families to fill them.”  Which is another way of saying that there was an oversupply of housing. But if so, if there was an oversupply of homes on the market, and if we assume that the law of supply & demand works, why didn’t home prices go down rather than up? Why, right up to the moment the “bubble” popped, their prices kept on going up, up, up — which is why up to the end, so many people were buying them for outlandish prices in order to get in on the speculative gravy train by “flipping” them, why builders kept putting them up, and why lenders kept on lending money for their purchase? Summoning all our meager intellectual resources, we have trouble answering that one. Can you?

Follow up. Hidden in today’s Los Angeles Times is a short article to the effect that home prices have hit a new low, both nationally and in California. Alejandro Lazo, Home Prices Hit New Low, L.A. Times, February 28, 2012 – click here. Maybe people aren’t buying because, in addition to having less money on account of the recession, and being more cautious about big-item spending, people are intuitively surmising that (at least out here in California) home prices are still too high — it takes $600,000 to $700,000 to buy a decent home in a lower middle-class community like Burbank, and over $400,000 to buy one in one of its lesser neighborhoods. Which is somewhere around twice the national average. So it shouldn’t be all that surprising that people out here are reluctant to commit themselves to long-term home payments for the biggest investment of their lives, that bids fair to continue declining in value. Wonder what Warren Buffet thinks about that.

 

Federal Private Property Rights Protection Act of 2011 Reported Out of Committee

Saturday, February 25th, 2012

As you may know, a federal law intended to undo the effects of the Kelo case has been pending in the House of Representatives  (the Judiciary Committee) since last year. We now learn that it has been reported out of Committee.

The Act forbids the federal government, as well as state government entities that receive federal aid money to take private property for economic development. For the full text of the Act click here.

Those Flinty-Eyed Guardians of the Public Purse Are at It Again

Friday, February 24th, 2012

That the 710 Freeway (originally planned to go through South Pasadena to connect the Long Beach Freeway in Alhambra,  to the Foothill Freeway in Pasadena) isn’t going to be built as planned (i.e., as a surface freeway) is old, old news. We would love to tell the tale, but neither we nor you are young enough to wade through it, and we doubt that any attempt on your part to do so would leave you with sufficient time to engage in gainful employment and in procreative activities. Suffice it to say that after a half century of resistance by South Pasadena, that makes the siege of Leningrad look like a neighborly contretemps, CalTrans (California’s agency once known as the State Division of Highways) has seen the light, and has decided to abandon its plan for a surface freeway link through South Pasadena. See City of South Pasadena v. Slater, 56 F.Supp.2d 1106 (C.D. Cal. 1999), reversed sub nom. City of South Pasadena v. Mineta, 284 F3d. 1154 (9th Cir. 2009). So now, CalTrans now means to build that freeway link as an underground tunnel under South Pasadena, a subterranean venue where it believes the locals won’t be able to stop it, although being the cynical type that we are, we believe it possible (make that likely) that they will breed a race of troglodytes who will give it a college try.

But that leaves a problem. It seems that in anticipation of building the original surface link of the 710 freeway, starting in the 1950s — that’s shortly after your Dad came home from World War II, and moving right along through the 1970s — Cal Trans bought or acquired under threat of condemnation some 460 homes which are still sitting around, some rented and many in a state of decrepitude, but which CalTrans won’t tear down and cannot sell. Why not? Because, if the Los Angeles Times is to be believed, in order to build that 4.5-mile underground tunnel in accordance with the new design, CalTrans will have to complete an environmental impact report, and the law governing those, requires consideration of alternatives, including — you guessed it, sports fans — a surface route which evidently must be preserved to evaluate the impact of its destruction by that freeway link that isn’t going to be built. Never mind that a half-century of Homeric battles in local and federal courts, to say nothing of the civic-political battlegrounds, has established beyond all reasonable (and possibly unreasonable) doubt that the surface route of the 710 freeway link through South Pasadena isn’t going to happen. The law is the law, and CalTrans “engineers are required to study the idea [of a surface route] as part of an exhaustive environmental impact report on what to do with the traffic in the so-called 710 gap,” even though that “surface route” is not going to be built, and it is the decision not to build it that has inspired the need for a new environmental impact study.

Of course, we understand that by now some of you at least are thinking along the lines of “Nah! That can’t be right.” But alas, that’s what the Los Angeles Times reports. See Caltrans Pressured to Sell Homes Bought for 710 Freeway Extension. February 20, 20012 – click here.  So unless you are prepared to charge the Times with aggravated prevarication, that’s the way it appears to be: first, your Dad’s money was spent acquiring hundreds of homes for the route of a freeway that isn’t going to be built, and now they can’t be sold because CalTrans’ engineers must consider the environmental impact of the freeway route that isn’t going to be followed, and whose absence has inspired this whole boondoggle.

Welcome to la-la land.

Afterthought. It occurs to us that the L.A. Times report nowhere mentions the cost of this caper. Might be interesting to learn what it has been and at what rate it’s growing. If you are into such stuff, take a peek at 40 Loyola L.A. L. Rev at p. 1112, footnote 174 and associated text.

High Speed Rail (Cont’d.)

Friday, February 24th, 2012

So as the sun set in the West, the California high speed rail folks were going to build the initial segment of the proposed high speed rail route down the middle of the Central Valley, between Bakersfield and Fresno, in the middle of nowhere, along a route that in itself could not possibly support the effort and amortize its multi-billion dollar cost. The feds expressed their disinclination to give the near-insolvent state of California any more money, so that the California high speed rail authority was left to hope that the Lord would provide the funds necessary for doing the job as sold to the voters in 2008, since voter approval was necessary in order to issue that $9 billion in bonds that would fund this effort.

Now, following a familiar law of politics (like nature abhoring a vacuum, politcs abhors the presence of unspent money), the $9 billion pot of high speed rail money is attracting a swarm of governmental bees that want a piece of the action so they can spend it in their own back yards. You’d thing meeting their desire would be impossible, since a railroad, whether high speed or not, can only run on one route, so if you build it in the form of a dedicated high-speed rail corridor in the Central Valley, you won’t be able to build it elsewhere . Right? Wrong. If you think so, it only goes to show that you don’t understand how the government mind works.

According to a recent issue of the Los Angeles Times (Dan Weikel and Ralph Vartabedian, Bullet Train Focus Shifts to Local Rails, February 20, 2012, p. AA1), various local government bees are buzzing around that $9 billion pot of money. Instead of starting the proposed high speed rail in the middle of the proposed Central Valley route and building out to its termini, these folks are plumping for the “book ends” approach, which we frankly don’t understand because it does not mean, as you might suppose, that they want to build the termini and then lay the high speed tracks inward to meet in the middle.

No, what these folks want is a piece of the action in order to “upgrade local rail corridors that could become part of the proposed high speed network.” (Emphasis added). This proposal would require spending $4 billion now, “which would leave just a few billion in the state’s voter-approved finance package.” As the proponents of this new proposal would have it (quoting from the L.A. Times):

“Giving local rail improvements a higher priority . . .represents a retrenchment from the original vision  that the bullet train would be a state-of-the-art system, running on dedicated track its entire length. The new proposal would blend the bullet train into existing rail corridors and make it share track with commuter trains and even freight railroads.”

We don’t know about you, but it will take ten strong men to get us, kicking and screaming,  aboard a 200-mph train that shares its tracks with lumbering freight trains. But what do we know?

More importantly, our feelings aside, this is not what the poor, dumb, screwed California voters voted for when they approved the issuance of $9 billion in bonds for a state of the art, high speed, 240 mph ”bullet” train. But hey man, what’s a little bait-and-switch between friends?

And that’s the way it goes. Stay tuned.

Some Observations About Eminent Domain

Tuesday, February 21st, 2012

A couple of days ago we posted a comment on eminent domain on the Volokh Conspiracy blog, and on reflection it occurs to us that it might not be a bad idea to share it with the readers of this blog as well. So here goes:

“What got Kelo the attention it received was the brazenness, the chutzpa of New London  which argued in the famouns (or is it infamous?) oral argument exchange between the city’s lawyer and Justice O’Connor, that the city could take any unoffending property (e.g. a Motel 6) and give its site to some fat cat for a fancy structure (e.g. a Ritz-Carlton Hotel), and still meet the Fifth Amendment’s “public use” limitation [on takings]. That went beyond the pale, and the country was rightly shocked when SCOTUS bought into such nonsense.

But as far as the breadth of government anti-property action is concerned, the NIMBY phenomenon… is far more harmful because it is…more widespread; it presents itself (and is often bought by the people) as a virtue [rather than as an abuse of government power]. Parties aggrieved by it have been officially declared by the federal courts to be [constitutional pariahs], nonpersons who are not entitled to relief, and that’s that.

“As the late Dick Babcock observed in his book THE ZONING GAME, the very captains of industry who run full-page ads in the Wall Street Journal denouncing government regulations, go back home to their leafy suburbs at the end of the day, where they insist that everything have the living daylights regulated out of it, down to harrassment of little kids selling lemonade to passersby.

“Those of us who have been at it for a while understand that there is no ‘law’ here. On the whole, the situation was correctly assessed by the late Bert Burgoyne, a great Detroit eminent domain lawyer, who observed that ‘The problem with this field of law is that liberal judges don’t believe in private property rights, and conservative judges don’t want to make the government pay.’ Thus, when it comes to takings, liberals who claim to be for strict enforcement of the Bill of Rights, abruptly embrace  “federalism” and don’t want the tail end — and only the tail end — of the Fifth Amendment enforced, leaving it to the parochial tender mercies of the locals. None of these folks acknowledge that the selective incorporation doctrine (which started with eminent domain) may either exist or have something to do with it, or that in the Boerne case SCOTUS was clear that the local legislature may not define constitutional terms. Except in eminent domain where its determination of the meaning of ‘public use’ is ‘well nigh conclusive.’

“But all this nonsense provides a lot of lucrative employment to specialized lawyers, and a lot of fodder for academics…whose efforts to make sense out of nonsense are [occasionally] interesting and sometimes entertaining.”

High Speed Rail – Back to the Future

Monday, February 20th, 2012

The Chicago Sun Times reports that, with a considerable whoop-te-do Amtrak has launched a high-speed rail link outside the Northeast corridor. Where? Between Chicago and Kalamazoo. See Mark Brown, Speeding to Kalamazoo Aboard Amtrak’s High-Speed Train, suntimes.com, February 16, 2012 — click here.  We rise above temptation to wonder out loud who would want to go to Kalamazoo in such a hurry — if that is what it is (keep reading) — and why, but the point of this story is something else.

The highest speed reached by this train on its run between Chicago and Kalamazoo was 110 mph. Wow! Sounds fast. But it turns out that the previous average train speed on that route was 95 mph, so that going 110 mph, according to Amtrak officials, shaved off only 10 minutes from the trip.

Now comes the best part.  It turns out that back in 1934 the Pioneer Zephyr train (also known as the Silver Streak) made the same run, hitting a top speed of 112.5 mph. So with all the foofaraw about high-tech, high-speed rail, and all the associated high-tech hoopla, we didn’t quite make the top speed of the train that ran on this route in 1934 — some three quarters of a century ago.

Rent Control – Once More With Feeling

Monday, February 20th, 2012

Don’t miss the article on rent control in San Francisco, in The Bay Citizen. Scott James, How Rent Control Subsidizes San Francisco’s Super Rich, February 20, 2012. Click here.  The title says it all, and the gist of the story is nicely captured by this quote:

“Voters approved rent control in 1979 to help preserve communities by limiting rent increases, a threat to working class and lower-income tenants. However, a new city analysis shows that for the first time upper-income households (annual incomes over $107,000) outnumber the poor (incomes under $35,000), 29 percent to 27 percent. And rents for vacancies average $2,600 a month, a record high.” Source: The Bay Citizen (http://s.tt/15Jar)

A Word on the Feds’ Strange Behavior From one Who Knows

Friday, February 17th, 2012

A while back, last November to be exact, we had occasion to comment on the Feds’ strange behavior.  Click here.

Although both the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit have plainly held in the Preseault case that the so-called Rails-to-Trails Act that converts privately owned rights of way of railroads that have discontinued operations into public hiking and biking rails, amounts to a taking of the servient owners’ interest in the land underlying those rights of way, the Feds keep on resisting plainly meritorious claims by these folks who want to get paid for those servient interests taken from them. So in violation of the Uniform Relocation Assistance Act, instead filing eminent domain actions like they are supposed to, to acquire those servient interests, the feds ignore claims of their owners and thus force them to sue in the U.S. Court of Federal Claims. Why are they dong this? Beats us, because they have been losing these cases every time.

Anyway, Thor Hearne, a colleague who does a lot of this work on behalf of property owners has chimed in, and with his permission, we quote here the pertinent part of his e-mail.

[T]he Justice Department has persisted with an irrational strategy of repeatedly
making the same losing argument in its effort to frustrate landowner’s right to
be paid for that property which the federal government has taken under the
National Trails System Act. Judge Smith’s latest decision rejecting the Justice
Department’s argument is just the most recent rejection of the government’s
argument. This is the 16th Trails Act case the Justice Department
has lost in just the past year. The Justice Department has an unbroken
string of losses in these Trails Act cases. In all of these cases the
government argued that, essentially, a public recreational trail is the same
thing as a railroad and, therefore, converting an abandoned railroad easement into
an easement for public recreation and so-called ‘railbanking’ is not a taking.
Or, in a variation of this argument, the Justice Department contends the value
of the property taken must be determined by using a “before and after
appraisal” in which the property is assumed to be perpetually encumbered by an
active railroad right-of-way in the “before” condition.

 

It is not at all surprising that, since Preseault I 494 U.S. 1 (1990) and Preseault
II
100 F.3d 1525 (Fed. Cir. en banc, 1996), no court has accepted
this argument. The only remarkable point is that the Justice Department
persists in making this argument. It is a truly bizarre litigation strategy.
Again, as several noted during the ALI-ABA conference in San Diego, the
government must not only pay the owners for the property it has taken, it must
also pay interest on this amount and reimburse the owners for their litigation
expenses. The Trails Act – and especially the Justice Department’s litigation
strategy responding to these landowners’ claims – is extravagantly expensive to
taxpayers. (Emphasis in the original).

 


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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