“Run for the Hills! The Sky Is Falling!” Or Maybe Not.

The November/December 2015 issue of the ABA magazine Probate & Property (at p. 37), provides us with a short review of Prof. John Echeverria’s article The Costs of Koontz, 39 Vt. L. Rev. 537 (2015). In it, it would appear, the professor waxes wroth and regales his readers with the message that the U.S. Supreme Court’s decision in the Koontz case, disapproving of land-use regulators’ misuse of exactions as tools of extortion, whether the exactions are monetary or not, has apparently laid waste to all sorts of good law and now “disrupts separation of powers by deviating from normal doctrines of deference and instead empowers courts to substitute their judgment on land use decisions of elected officials and administrators technical expertise; why it makes a sharp turn away from local control over local matters with the concomitant attributes of political accountability, diversity, and experimentation that come from  local decision making over land use matters; how it degrades our protections for important values like environmental conditions, infrastructure quality and reliability, community character, and property values themselves, . . .” Etc., etc.

Oh dear.

We resist the temptation to deal with this hyperbolic rant point by point, for two reasons. First, if judges’ land-use decisions exemplified by Koontz are as bad as Prof. Echeverria would have it, how come the same judges engaging in review of similar land-use regulations in the context of environmental law are said to work wonders and indeed, do the Lord’s work.

Second, our attempt at a detailed reply would be superfluous because a full, proper response was provided by Justice Ruth Bader Ginsburg, when she wrote in Arkansas Game & Fish Comm’n. v. United States, 133 S.Ct. 511, 521 (2012):

Time and again in Takings Clause cases, the [U.S. Supreme] Court has heard the prophecy that recognizing a just compensation claim would unduly impede the government’s ability to act in the public interest . . . [But t]he sky did not fall . . .”

Being a Californian, we might also note in passing that back in the 1950s the California Supreme Court, speaking in the notorious People v. Symons case, voiced the concern that if land owners were to be fairly compensated for all demonstrable — and indeed, incontestable — losses, an “embargo” would have to be declared on construction of California public projects. But guess what? In 1976 the California legislature repealed the Symons rule, but construction of California public projects has kept going on apace.

Lowball Watch — California

The Marin Independent Journal reports that in a taking of land for a highway, a jury in Marin County (north of San Francisco) awarded the owner $3.2 million on the state’s evidence of $575,000.  Gary Klien, Marin Jury Awards Rancher $3.2 Million for Land Seized in Novato, Nov. 2, 2015.


The Battle of Jersey Shore

After Hurricane Sandy caused damage to beachfront property in New Jersey, the state decided to prevent a recurrence by having the US Corps of Engineers build new dunes along the beach, hoping that they would hold off the surging surf in case another hurricane came along. But some of the owners of beachfront homes oppose this solution because the new dunes would impair or destroy their ocean view. Which sounds reasonable — what’s the point of paying extra for an oceanfront home if you can’t see the ocean?

There is more to it than that. Some of the owners point to existing seawalls, and contend that they are as good as the proposed dunes, so there is no point in replacing them. Now, things get sticky. The Corps is willing to do the job and spend the millions required to do it, but it evidently wants the state to acquire the necessary land for those dunes. Further, the state — personified by Governor Chris Christie  — demands that the affected beachfront homeowners donate (as in gratis) the necessary land, to which the aforementioned owners have replied with a polite variant of “Hell, no!” After the last presidential “debate” we know (from Governor Chrstie himself) that you mustn’t be rude in New Jersey. Just kidding, folks; the guv was the soul of politeness, given the provocation to which he was subjected.

Beyond that, some of the objecting owners have hired a first-class eminent domain lawyer, Tony Della Pelle of McKirdy & Riskin, who has filed an action on their behalf, arguing that the state should retain the seawalls which they have recently reinforced, which they contend, would do the job, preserve their property rights, and coincidentally, save the state a bundle of money.

So the battle has been joined, and we await the results of litigational round one. We wish Tony (whom we happen know and of whom we think highly) the best of luck in this uphill fight. Why uphill? Because when it comes to choosing how to address the problem that is to be solved by the public project, judges just don’t like to listen, much less to rule against the government’s choice of solutions (See the post on Public Necessity which just happens to precede this one).

Anyway, stay tuned because this promises to be an interesting battle, with the last word to be delivered by the appellate courts. The U.S. Supreme Court aleady touched on it in the Renourish the Beach case which turned out to be inconclusive, so maybe their Lordships will want to take another shot at it.

For the whole story, read Patrick McGeehan, Residents Feud Over Building Dune Defenses At Jersey Shore, N.Y. Times, Oct. 31, 2015, at p.A18.


By the way, though the NY Times is silent on this specific point, there is possibly the question involved here whether the new dunes will also create a new stretch of beach, and whether the Corps, or the state would own it. If so, count on another battle as to who owns the new, artificially accreted beach.

Lowball Watch — North Carolina

Word reaches us that in a case in New Hanover County, North Carolina, involving the taking of the property of a building supply company, the state DOT presented evidence of $303,000 as just compensation (and later offered $700,000). The owners demanded $1,000,000 to settle. After trial, the jury verdict came to $2,995,000 — the amount of the owners’ evidence. After adding interest the total award came to $3,426,000. That’s over eleven times DOT’s original offer.

Necessity in Eminent Domain is Weird Stuff

It isn’t every day that an obituary sets one thinking about matters of eminent domain law. But it just happened in the case of the N.Y. Times obituary of judge Richard J. Cardamone of the U.S. Court of Appeals for the Second Circuit. Sam Roberts, Richard Cardamone, Judge Who Doomed Westway Project in Manhattan, Dies at 90, 10/25/15, at p. 23. Judge Cardamone opined in 1985 that the Corps of Engineers’ determination of compliance with environmental laws, and its issuance of a permit for the construction of the Westway highway project along the west side of Manhattan, was defective and would  accordingly have to be vacated and redone.  This was done even though, as the court conceded, “the voiding of the [Corps of Engineers’] permit may result in condemning the Westway project to oblivion.” Which it did.

So much for judicial protestations in eminent domain cases that when it comes to takings of land for public projects, they judges are pretty much limited to rubber-stamping condemnors’ determinations that the proposed taking is just hunky-dory public-use-wise – i.e., it’s “well-nigh conclusive.” And as for determinations of public necessity for the project, the US Supreme Court has told, once public use is established, necessity for the public project is not a legal requirement under federal law.

In short, public necessity in eminent domain is weird stuff. Originally, the US Supreme Court justified takings of private property for others’ private use (like, for example, irrigation ditches and mine aerial tramways) on the ground that such uses were a matter of great necessity. As the court put it in Clark v. Nash, 198 U.S. 361, 369-370 (1905), such uses are deemed public “where it is absolutely necessary to enable [the private condemnor] to make any use whatever of his land, . . . which will be valuable only if water can be obtained.” 198 U.S. at 369-370. But a scant dozen years later, came Bragg v. Weaver, 251 U.S. 57, 58 (1919), and there went judicial review of public necessity, with the condemnee not even entitled to a hearing thereon, thereby unwittingly undercutting the holding of Clark v. Nash, which was based on a high level of necessity.

But the idea of taking land (and paying for it) where doing so is unnecessary, is so offensive to civic values that states took ostensible care of that problem by enacting statutes requiring a finding of public necessity before private property could be taken for public use. See e.g., Cal. Code Civ. Proc. § 1245.220. But even so, courts – with the exception of Florida — take the position that the question of necessity may not be inquired into unless there is fraud or bad faith on the part of the condemnor. Before 1976, California went further than that and held in the notorious Chevalier case that necessity is altogether nonjusticiable, even where there is fraud, bad faith or abuse of discretion by the condemnor. But in 1976, the California legislature made necessity justiciable in cases of gross abuse of discretion and bribery.

The reason for the courts’ reluctance to inquire into public necessity is said to be judges’ lack of background in matters of engineering and such, and their policy of unwillingness to “second guess” determinations by the legislative branch of government. For a discussion of this justification, see City of Chicago v. St. John’s United Church, 935 N.E.2d 1158, 1171 (Ill.App. 2010).

So far, so bad. But it gets worse — it’s an altogether different story outside the law of eminent domain. There, as illustrated by Judge Cardamone’s decision in the Westway case, the same judges who proclaim themselves incapable of judging questions of necessity in eminent domain cases, have to problem “second guessing” the expert public project builders in environmental review cases. Why? If you know, perhaps you can share that knowledge with your faithful servant who continues to be puzzled by judges’ professed inability to do in eminent domain cases what they routinely do in environmental review cases.

It’s Only Been 30 Years Since this Redevelopment Project Was Begun. So What’s Your Rush?

We don’t quite know how to do justice to this news item, so we ask you to go to the link below and get the story from the horse’s mouth, as it were. It’s not very long. This is a monument to what’s wrong with redevelopment, so if you have an interest in this subject, have at it.

Note that the article fails to mention how much this caper cost the long-suffering taxpayers of Los Angeles, but hey man, who cares about them?


Proceeding on the theory that one picture is worth a thousand words, this is what the Marlton Square redevelopment project area looks like after 30 years:

Marlton Square



Charlie Brown and Lucy go To Washington on Your Nickel

We depart from  our usual topics of eminent domain and land use law to take a look at another subject that is worthy of your attention, namely, what has been happening, or more accurately, not happening to interest rates. For the umpteenth time, the Fed announced last week that it is leaving interest rates alone and leaving them at nearly 0 percent as far as the banks are concerned. What a deal if you are a banker! You get the Fed’s money at the rate of .001 percent and then you loan it to your prime borrowing customers at 3.25 percent. Do the math sometime and see what rate of interest you get. Our calculator says it’s over 3000 percent. Not a bad profit margin, if you are a banker, particularly when loaning other people’s money.

But what if you aren’t?

Then, if you put money in a bank, you have to pay income tax on the pittance your bank has the nerve to call “interest” (Our bank pays us the munificent rate of .02 percent on our account). Of course, inflation has been doing its thing relentlessly, and has been hovering around 2 percent per annum. So without dwelling on the depressing arithmetic, you lose over 2 percent by saving money and putting it in the bank. Does that sound right to you? Not to us. To us, since this situation prevails by government decree, it’s a form of institutionalized theft, mostly from the middle class.

So who benefits from that? (Or cui bono? as the Romans used to ask.) First and foremost, Uncle Sam. The feds are borrowing trillions but don’t have to pay anything remotely resembling reasonable interest on their borrowings. Any increase in prevailing interest rates would thus hit Uncle Sam harder than anyone else because no one else can run up a multi-trillion dollar debt. Second, the big banks, the ones that get their money from the Fed at an effective rate of zero percent, and get to loan them out at real interest rates. And when it comes to that double-digit interest they charge on credit card debt, don’t ask! Third, extremely low interest rates prop up the stock market that goes into a swoon whenever it perceives an imminent increase in interest rates.

But since there is no free lunch, who gets screwed? Primarily, savers, which is to say the middle class – the folks who are hard put to put some money aside, and who got burned in 2008. They have been driven out of the stock market because they are unable to risk its collapse that many believe to be imminent and that has been foreshadowed by the recent multi-hundred point up-and-down swings. Extremely low interest rates also inflate a housing bubble because, as we surely need not tell you, extremely low interest rates drive the housing market by encouraging people to buy homes at prices they cannot otherwise afford, because the prevailing low rates keep the monthly mortgage payments low. But just you wait until interest rates rise to more reasonable levels, the all-cash buyers realize that they can’t get their money back, and those poor suckers who took on large loans try to sell their high-priced houses when interest rates return to normal.

The Fed has been stalling, as they just did this week, for years. This process has now assumed the proportions of parody; sort of like the annual shtick of the “Peanuts” cartoon strip where every year Lucy faithfully promises Charlie Brown that this time, this time for sure, she will hold the football for him so he can kick it, but at the last moment snatches it away. So, year after year, poor ol’ Charlie Brown winds up on his little keester. Same with the Fed. Chair Janet Yellen keeps promising an increase in interest rates in a month or two, when the financial moon is in the recovery house, but when the time comes, she and her merry men keep things exactly as they have been for years, thus benefiting Uncle Sam, the big banks, and the stock market, and of course screwing the middle class savers.

Folks, this isn’t good. That sort of policy that tries to fool and stall the Great Unwashed may put money in big-time stock market players’ pockets, and make for an entertaining cartoon, but at bottom it is a bait and switch scheme.

Like him or not, Donald Trump’s abrasive but successful campaigning has demonstrated that if politicians keep lying to the people long enough, and feeding them their conventional-wisdom bullshit about how they will make things great if you only elect them — whereupon they do nothing or even do the opposite — there comes a point where the people lose not only their faith but their cool as well, and widespread anger replaces thinking and judgment. Which is a prescription for ultimate destruction of civic values and what is left of good governance. And, as we have seen in this year’s presidential politicking, one day  you look up and see the establishment types standing there babbling away as usual, with people increasingly not listening to them, while smart political outsiders make a virtue out of inexperience but make political hay nonetheless. Is that better? That remains to be seen.


Gideon Kanner is professor of law emeritus at the Loyola Law School. This article appeared in modified form in the Los Angeles Daily Journal on September 22, 2015.

Edited 9/22/15

“Kelo” Movie Back On

The Day, the New London, Connecticut, newspaper reports that the movie about Susette Kelo’s battle with the New London redevelopment machers over the taking of her home — now known as the “Little Pink House” — for the failed Fort Trumbull redevelopment project, is back on. It’s in production in Vancouver.

Catherine Keener has been cast as Susette Kelo. Keener was nominated for the Academy Award as supporting actress in “Being John Malkovich” (1999) and in “Capote” (2005).

We hope this time this effort will make it to the big screen, so stand by.


Eminent Domain Makes it Into Presidential Politics

What with Donald Trump running for President, it seemed to us to be only a question of time before someone would take out after him in the matter of his reliance on eminent domain. A while back, the Donald tried to get Atlantic City to take an old lady’s home for “public use” in the form of convenient extra parking for limos of the heavy rollers using his casino. The Institute for Justice represented her and persuaded the court to deny the right to take.

Now, that event has been brought up as a negative factor in Trump’s campaign for the Republican presidential nomination.

Click here: http://www.npr.org/sections/itsallpolitics/2015/09/16/440667796/conservatives-start-air-assault-against-donald-trump