Trump Does Not Understand Eminent Domain Law

The other day we had a comment on the Trump-Cruz contretemps over eminent domain, and you can read it here:  http://gideonstrumpet.info/2016/01/whats-this-cruz-…ent-domain-about/ Tonight, at the Republican ABC debate they had at it again and this time Trump made it painfully clear that he does not understand the law of eminent domain or indeed what the controversy that is roiling the country is all about.

Trump argues that eminent domain is a wonderful, necessary thing; that without it we would not have roads, public buildings etc. What he fails to understand is that the controversy over eminent domain that has the country in an uproar deals with something entirely different. The problem is the misuse of the sovereign power of eminent domain, not for public uses as specified in the constitution, but rather for purely private endeavors — like the Poletown caper in Detroit where the city blew some $200 million to take an unoffending middle-class neighborhood in order to raze it to the ground and give the land to General Motors at a fraction of its value, so GM could build a new Cadillac plant there instead of in Ohio. So did it work out? No. The new GM plant never achieved anywhere the employment level it promised. And of course in the long run GM went bankrupt. And so did Chrysler in spite of receiving a similar deal in Detroit v. Vavro.

Trump also appears to be under the impression that condemnees get  several times the value of the taken land. If it only were so! When landowners take a condemnor to the cleaners that happens because the condemnors — as is their wont — tend to underestimate values and make lowball offers to prospective condemnees, hoping that the latter will accept the lowball offer, which they do often enough to justify the practice.

Anyway, we find it astounding that the subject of eminent domain has been raised to such prominence. There we were for the past half-century, in our little “dark corner of the law,” minding our business and handling some eminent domain cases, when — Shazam! — along came the wretched 2005 Kelo opinion and with it the uproar that has been with us ever since, and that now has been raised to a hotly debated issue in presidential politics. Don’t that beat all?

 

Shed a Tear for an Unsung Hero Who Tried But Was Prevented From Saving Astronauts’ Lives

Here is another departure from our usual topics to take note of an event that shook America 30 years ago, and the tale of an unsung hero who did his best to prevent it.


 

We were reminded yesterday that yesterday was the 30th anniversary of the destructive failure of Space Shuttle Challenger which exploded on takeoff, and killed all seven Astronauts aboard. The cause was the failure of an O-ring seal in one of the large solid propellant boosters. It permitted hot gases from the combustion chamber to ignite the “grain” – the large solid propellant cylinder inside the booster – and to initiate its uncontrolled burning that spiked the pressure and caused an explosion.

What many people do not realize is that this tragedy, which killed all seven astronauts aboard, was not only unnecessary, but also the result of stubbornness on the part of NASA and Morton Thiokol (the boosters’ manufacturer). The design parameters were clear: the O-rings were designed to operate in Florida’s mild climate and the rocket was not to be launched if the temperature fell below 55 degrees. Roger Boisjoly, the engineer in charge of the O-ring design, warned management and argued that the launch should be scrubbed until the ambient temperature was within specifications. But for reasons that are not clear – though they sound like management hubris and a stubborn desire to meet the planned schedule – Boisjoly’s urgent warnings were disregarded, and the launch proceeded with tragic results.

The seven astronauts who thus lost their lives are being remembered and memorialized on this anniversary of that tragedy. But few people remember Roger Boisjoly’s principled and courageous stand against this act of human folly.

 R.I.P., Roger.

 

California Choo-Choo (Cont’d.)

We haven’t had much to say lately about the California “bullet train” that is planned to run between Los Angeles, and San Francisco in the sweet bye and bye because there hasn’t been much news. Now there is. Today’s Los Angeles Times has an item that is worth noting. Ralph Vartabedian, Bullet Train May Miss Deadline, Jan.28, 2016, p. B 1. Not much for us to say, except to quote the first paragraph of the LA Times story:

“California bullet train could take longer than to build than previously estimated and its ultimate cost is difficult to predict, the head of the high-speed rail authority told state legislators Wednesday.”

Surprise, surprise!

 

Another Glorious Redevelopment Project Down the Tubes

Today’s New York Times reports that after teetering on the edge of bankruptcy for a while, Atlantic City has thrown in the towel and has agreed to “yield control of the city’s finances to the New Jersey state government. . .” hoping to stave off bankruptcy. Patrick McGeehan and Marc Santora, Deal to Give State Control Over Atlantic City’s Finances, N.Y. Times, Jan. 27, 2016, at p. A20.

Remember how our betters assured us that redevelopment would restore Atlantic City to . . . Actually, we don’t really know what that restoration was supposed to be to. Even then Atlantic City was pretty shabby, uless you were a salt-water taffy freak. Your tax money at work.

Sic transit gloria . . .

PS – For some reason we can’t find this item in the on-line edition of today’s NY Times. But we have a hard copy and are looking at it even as we write this.

 

What’s This Cruz-Trump Uproar Over Eminent Domain All About?

Unless you have been out of it lately, you must know that recently, two of the leading Republican presidential candidates — Trump  and Cruz — have been going at each other over, of all things, eminent domain. But it seems to us that the quarrel between those two gents is not exactly a quarrel. Why? Because they are talking about two different things.

Cruz argues that Trump in in favor of a type of crony capitalism whereby the government uses eminent domain to wrest property from unoffending private parties in order to turn it over to other, more favored, private parties, which is not only immoral but also contrary to the “public use” limitation on takings contained in the Fifth Amendment. He points  to an attempt by Trump to obtain the Atlantic City home of a widow named Vera Coking for some extra parking  at one of his hotels, to make limousine parking for heavy rollers at that hotel more convenient. Of course, Trump failed when the stalwart pro bono folks at the Institute for Justice represented Ms. Coking and got the court to disapprove the taking.

Trump responds that eminent domain is great, and that without it we wouldn’t be able to build roads, public buildings, defense installations, etc. True enough. But Trump fails to deal with Cruz’s specific charge that a lot of today’s takings are not for genuine public uses, but for private gain — of which urban redevelopment is a good example. This process takes properties from one class of private owners and turns them over, as it tried to do in the notorious Kelo v. New London case, to favored redevelopers for the latter’s gain on the theory that by a trickle down process the community will gain.

Thus, it seems to us that these two candidates are talking past each other, about two different things. Nobody we know of argues that eminent domain should be abolished — sometimes its use is a matter of public necessity. But taking land for whatever reason from citizen A in order to give it to citizen B for the latter’s profit, is an altogether different story.  See Dean Starkman, Take and Give: Condemnation Is Used to Hand One Business Property of Another, Wall St. Jour., Dec.1, 1998, at p. A1.

Follow up.  For the Washington Post take on this issue, see Katie Zazina, Jan.25, 2016, How an Obscure Legal Issue Has Found Its Way Into the GOP Race. 

https://www.washingtonpost.com/politics/how-an-obscure-legal-issue-has-found-its-way-into-the-gop-race/2016/01/25/db192fb2-c301-11e5-8965-0607e0e265ce_story.html

http://gideonstrumpet.info/wp-admin/post.php?post=9091&action=edit

 

 

 

 

And Now, For a Musical Version of Kelo

No, folks, we are not making this up. The New Haven Independent brings the dispatch that somebody performing under the name “Swamp Yankee” has set the Kelo story to music and is performing his composition on a guitar. It is also available on tape. See Lucy Gelman, Swamp Yankee vs. Eminent Domain, New Haven Independent, Jan. 22, 2016.  http://www.newhavenindependent.org/index.php/archives/entry/swamp_yankee_goes_deep/

We hope you will forgive us if for all our distaste for the Supreme Court’s wretched performance in that case, we’ll skip that musical comp0sition, even though it illustrates the depth of the popular revulsion over the holding in that case.

So have at it folks.

Certiorari Granted in Taking Case

The case is Murr v. Wisconsin, Docket No. 15-214, and the question presented is whether two legally distinct but commonly owned parcels of land (that were acquired at different times) must be treated as one for purposes of analyzing whether a regulatory taking has occurred when one of them is subject to confiscatory regulation. In other words, may the owner sue in inverse condemnation for the taking of the regulated parcel, or is he — as stated in the Penn Central case — out of court because he still has one parcel that he can build on?

This is interesting because if you look at the Penn Central opinion, you will notice that it cites neither doctrine nor authority for its assertion which is (a) contrary to the court’s earlier decision in United States v. Grizzard (1911) holding that in partial inverse takings the owner is entitled to compensation for the diminution in value of his remaining land, not just the part taken, and (b) most of inverse condemnation cases decided by the U.S. Supreme Court involved partial taking –easements being the frequent example.

We have had a lot to say about the Penn Central case, concluding that it’s an intellectual and doctrinal mess, and if you want to check out what we had to say, read Gideon Kanner, Making Laws and Sausages: A Quarter-Century Retrospective on Penn Central Transportation Co. v. City of New York, 13 William & Mary Bill of Rights Jour. 653 (2005). It’s on the long side but it covers both the case and its context, analyzes the views of the Supreme Court clerks who worked on it, and it deals with background facts and lower court opinions, that law reviews don’t often deal with.

The Supreme Court will probably decide it next year, but there should be lots of action involving the parties’ and their friends’ briefing, and we expect the usual suspects to scream bloody murder over the fact that the Court is even considering this issue on the merits.

 

Our Misinformed Pontificators

A professor named Jedediah Purdy has taken to the internet — Democracy Journal.org — to tell us how wrong the critics of the Kelo case are. See http://democracyjournal.org/magazine/39/this-land-is-our-land-2/

While professor Purdy is free with the term “our land” he has not to the best of our knowledge offered to contribute to the cost of its maintenance — his use of the word “our” is thus a figure of speech. The trouble is that he (a) evidently has not read the facts of the case nor those surrounding the Kelo v. New London caper, and  (b) he has no clue as to what actually happened in New London. And that is how it goes among the professoriate these days. Quoth Professor Purdy:

“New London is a depressed, post-industrial town on Connecticut’s Long Island Sound coast. The good jobs left the region decades ago. The poverty rate, at 25 percent, is two and a half times that of the state. In 2000, New London used the power of eminent domain to claim several blocks of houses, making room for a comprehensive redevelopment plan that centered on a promised Pfizer pharmaceutical facility. After the town paid the owners, it transferred the land to the developers. This sort of publicly subsidized private development is standard these days, with states and local governments bidding for factories, offices, and stadiums with promises of tax breaks, subsidies, and other giveaways. The New London homeowners, some elderly, some of whom had spent their lives in the houses, declined to sell and resisted the condemnation in court. “

The problem with this depiction of the Kelo controversy is that none of it happened. The subject property was not blighted and the town did not claim otherwise. What caused its immediate problems was the closure of a nearby Navy submarine base. But its bonds continued to be rated AA- because its tax revenue flow was good.

Taking things in order:

First, the taking was not of “several blocks,” but of 92 acres of waterfront land.

Second, The land was not transferred to a developer. That was the town’s intended sweetheart deal (for a dollar per year for 99 years) but the redevelopment project — in spite of the piffle the town sold to the Supreme Court’s majority — was so badly thought out that in the real world no one would touch it; the chosen developer could not even get financing, so it defaulted on the agreement with the city, and never got possession.

Third, the Pfizer pharmaceutical facility (a $300 million research center) was not what was built on the site; that facility had already been built on nearby land before the Kelo case came along  (it was another sweetheart deal). The director of the redevelopment entity was married to a Pfizer executive – you take it from there. The purpose of the Kelo taking was  ostensibly to put up fancy commercial facilities and condos, a marina and a five-star hotel, to serve the highly paid high-tech employees of Pfizer with upscale facilities, and to generate more tax revenue.

In other words, for all the lawyer talk that New London deployed in its cause, and the Supreme Court’s majority swallowed whole, this was clearly not any “public use,” as required by the constitution,  but a private sweetheart deal designed to benefit Pfizer, using — or more accurately misusing — the power of government in the process. And we don’t care what the Connecticut courts had to say about that — the facts speak for themselves.

So what happened? Professor Purdy does not deign to take note of reality, but the great majority of Americans on both sides of the ideological spectrum, saw at once that this was no “public use” required by the Fifth Amendment, but rather an inept  private deal designed to line Pfizer’s pockets at public expense and increase the town’s tax revenues. And speaking of expense, Purdy fails to mention — musta slipped his mind — that the public was taken to the cleaners to the tune of some $100 million and got nothing — absolutely nothing — in return. The subject land is still a vacant, weed-overgrown wasteland that produces no taxes and serves no purpose. The town destroyed an unoffending lower middle class neighborhood to no purpose. Indeed, after the deal came a cropper, Pfizer hung around just long enough to collect the benefit of that tax abatement deal and then sold its research facility building and moved out of town taking some 1400 well paying jobs with it. A decade after the Supreme Court’s disastrous opinion, the land in question remains unused and the taxpayers are still out that $100 million. Some “public use.”

So much for the facts. We hope to deal with Professor Purdy’s legal analysis in a subsequent post. Stay tuned. For now we suggest that if you are interested in the Kelo caper, you read our law review article, Gideon Kanner, The Public Use Clause: Constitutional Mandate or “Hortatory Fluff”? 33 Pepperdine Law Review 635 (2006). Take a look at it. It’s a good read, even if we do say so ourselves, and it was recently selected by a bunch of land-use professors as one of the past decade’s best.  Have at it. And stay tuned.

By the way, here is what that “well thought out” Kelo redevelopment project looks like today.

Dispatches From the Environmental Front

ITEM ONE — YOU WIN SOME AND YOU LOSE SOME, EVEN IF YOU ARE ENVIRONMENT -FRIENDLY.  Reducing the dreaded carbon footprint is good because it retards global warming, or climate change, if you prefer. So, burning biomass –biodegradable stuff like wood chips, almond shells and such, instead of fossil fuels like coal — is a good thing. But solar power is good too because it is sustainable — the sun rises every morning and illuminates all those photoelectric arrays, which is good stuff too — it can reduce the utility power bill to a buck a month if you live in a single family home located in a sunny place, as we do in California. Then there is wind power . . .

Ah, but there is a snake in paradise. If you produce sustainable power on a large, commercial scale from biomass, you necessarily compete with solar power. And where there is competition, there are winners and losers. Long story short, we learn from today’s Los Angeles Times — front page, above the fold — that in the competition between biomass-based energy and solar power, the latter is a clear winner. Geoffrey Mohan, Rise of Solar Puts Farms in Bind, L.A. Times,  Jan. 1, 2016, at p. A1. What that means is that that “The state’s biomass energy plants are folding in rapid succession, unable to compete with heavily subsidized solar farms, many of which have sprouted up amidst the fields and orchards of the San Joaquin Valley.” http://www.latimes.com/business/la-fi-biomass-closing-20160101-story.html

So much for good intentions

ITEM TWO — WELCOME TO CALIFORNIA. This one is typical California stuff so expect some unintended humor, and you won’t be disappointed. The same issue of the L.A. Times also informs us that down near San Diego, a Superior Court judge has ruled that the city may not proceed with the construction of a lifeguard station on Mission Bay because its permit has expired. In California construction under such a permit  (issued by the Development Services Department) must start within three years of issuance, and here the permit was issued in 2006. The city could have sought an extension, but it didn’t because, it argued, time was consumed by seeking permission to build from the California Coastal Commission, so it wasn’t just sitting on its okoli (that’s Hawaiian for you-know-what). Not good enough, ruled the judge — the city was bound by its own regulations which required construction start within three years, and that was that. Ricky Young, Time’s Up for Lifeguard Station, l.A. Times, Jan. 1, 2016, at p. B3.

Who sued and why? We’re glad you asked. The neighbors — who else? —  complained that the 900 sq. ft. structure proposed by the city would obstruct their views.*

Much could be said at this point, but we won’t try. We only observe that it took a mere four years to fight and win World War II, but so far nine years has not been enough to start construction on a dinky, 900 sq. ft. life guard station. Self-parody, that’s what it is.

http://www.pressreader.com/usa/los-angeles-times/20160101/281818577806692/TextView

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* We hope you’ll forgive us, gentle readers, for being thoroughly confused. Why? Because early in our career we learned the hard way that in California there is no right to view, so owners of land adjacent to yours may build on it even if their construction obstructs your view. See Katcher v. American Saving & Loan, 245 Cal.App.2d 426 (1966). So what were those neighbors complaining about?