California Choo-Choo (Cont’d.)

A recent headline tells the tale; U.S. House Votes to Stop Funding California High-Speed Rail, by Allen Young, Silicone Valley Business Journal, June 11, 2014. To get the story click on http://www.bizjournals.com/sanjose/news/2014/06/11/u-s-house-votes-to-stop-funding-california-high.html?ana=rss_sjo_tabo&page=all

The take-away paragraph is:

“The Republican-controlled U.S. House of Representatives passed legislation Tuesday to stop federal funding for high-speed rail in California.

“The action is largely ceremonial, however, as the California High-Speed Rail Authority has not requested additional federal funding this year above the stimulus grants the agency is already spending.”

 

Lowball Watch — New Hampshire

The Salem Observer reports a jury award of $13.5 million on the state’s offer of $3.97 million for the taking of 30 acres for a highway. Plus, the state will be paying $1.2 million in interest.

The details as to the legal issue that divided the parties are unclear, but they evidently involved the parties’ disagreement as to the proper extent of the necessary taking. See Gary Rayno, Salem Observer, Former Wyndham Landowner Awarded 13.5m  in Eminent Domain Case, June 4, 2014. Click on  http://www.unionleader.com/article/20140603/NEWHAMPSHIRE1411/140609674 for the story.

The Ripeness Rule in Taking Cases is Based on SCOTUS’ Misreading of Tennessee Law.

Recent high-class law blogs have been taking Justice Antonin Scalia to task for his assertedly “cringeworthy” attribution of a legal argument to the EPA, whereas it had been made by a party in an earlier case. Oh, dear. See Jacob Gershman, Supreme Court Corrects Scalia’s “Cringeworthy” Error in Pollution Case, Wall Street Journal Law Blog, April 4, 2014, This error had no effect on the substantive law in issue, and was promptly corrected, but not before inspiring snarky commentary aimed at Scalia charging him with not knowing what was in his earlier opinion.

Also, Justice Kagan got it from the bloggers for misstating the original location of the Jewish-American community. Oy. Adam Liptak, Final Word on U.S. Law Isn’t: Supreme Court Keeps Editing, N.Y. Times, May 25, 2014. To say nothing of Justice Alito also getting it for his asserted statistical methodology shortcomings.

But what has not received any attention among the legal mavens scrutinizing Supreme Court opinions, is that in an earlier important opinion in which the Court (speaking through Justice Harry Blackmun), committed a far worse, doctrinal blunder that misinterpreted Tennessee takings law, and thereby distorted federal law of ripeness, thus de facto barring American property owners from receiving consideration of their federal constitutional claims in taking cases.

It isn’t every day that a state supreme court lays it on the line and makes clear that the U. S. Supreme Court has misunderstood a state law rule, but it happens and it has happened again in the takings field. You may recall that in Williamson County etc. Commission v. Hamilton Bank, 473 U.S. 172, 194-195 (1985),the Supreme Court refused to provide relief to the aggrieved property owner seeking compensation for a regulatory taking of its land by confiscatory land-use regulations because it found the case unripe. Why? Because, among other things, the owner who claimed compensation for a regulatory taking of its property had not first sought just compensation in the state courts. Why would such a detour through state courts be necessary? No other species of plaintiffs suing under 42 U.S.C. § 1943 is required to do so. Indeed, in Patsy v. Board of Regents, the Justices made it clear that no exhaustion of state remedies is required before suing in federal court under 42 U.S.C. § 1983 for a violation of constitutional rights. True enough, Justice Blackmun characterized this procedural wrinkle as a search for ripeness, not as exhaustion of state remedies. But in practice this thin distinction has been largely ignored by lower federal courts which demand that plaintiffs claiming uncompensated regulatory takings, first exhaust all their available state remedies.

Thus, in Williamson County, the court asserted that a taking of private property is unconstitutional only when accomplished without just compensation, so the property owners’ claim of taking is unripe until after they seek but are denied the lacking compensation by state courts. But the same is true of all rights – including life and liberty – that are protected by the Due Process Clause of the 14th Amendment. They may not be impaired without due process, but are substantively fair game if due process is provided. But only the plaintiffs in taking cases are required to “ripen” their federal causes of action by first suing for relief in state court.

What makes this procedure really bad is that when the taking plaintiffs duly comply with Williamson County, and take their detour through state courts, they discover that the state court decision is deemed by the federal courts to be res judicata, and they thus can never obtain an adjudication of their federal constitutional claims.

The Court’s ripeness holding in Williamson County was explicit and unmistakable: “If the [state] government has provided an adequate process for obtaining compensation, and if resort to that process ‘[yields] just compensation,’ then the property owner ‘has no claim against the government for a taking,’” and therefore it follows that “the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation.” “The Tennessee state courts have interpreted § 29-16-123 to allow recovery through inverse condemnation where the ‘taking’ is effected by restrictive zoning laws or development regulations.” Emphasis added. Thus, said the court, since the Williamson County plaintiffs failed to sue first in state court, their taking claim was unripe and its filing in federal court was premature. That would have been bad enough, but we have learned since then Tennessee law said no such thing. Rather, Tennessee law in question is limited to providing relief in cases of physical takings, not regulatory takings. Don’t take my word for it; you can easily check it out for yourself. Just keep on reading.

Since what was in issue was the interpretation of Tennessee state law of remedies, it would seem only prudent to see what the Tennessee courts have had to say about all this. After all, the U.S. Supreme Court is a federal court that deals with federal issues and does not provide authoritative interpretation of state law. It is the state courts that have the last word on that. So did the Tennessee law in 1985 (when Williamson County came down) provide a compensation remedy for regulatory takings? No, it did not. And it still doesn’t.

We know this because the Tennessee Supreme Court told us. Explicitly. Check out B & B Enterprises of Wilson County v. City of Lebanon, 318 S.W.3d 839 (Tenn. 2010), and there it is in black-on-white: “[T]his court has not yet held that a regulatory takings claim can be asserted under Article I, Section 21 of the Tennessee Constitution. Currently, we have recognized only two types of takings claims – physical occupation taking claims and nuisance-type takings claims. Regulatory takings do not fall into either of these categories.” 318 S.W.3d at 845, (citations omitted, emphasis added).

The Tennessee Supreme Court went on to note that the B & B case before it was “not a proper vehicle for deciding the existence or scope of a regulatory taking under Article I, Section 21,” of the state constitution, because it dealt with limitations – i.e., “when is such an action timely, assuming for the sake of argument that it exists, rather than when it becomes ripe for litigation.” Which brings us to the point of this article.

The bottom line is that the U.S. Supreme Court was simply wrong in the Williamson County case when it asserted that Tennessee law provided a compensatory remedy for regulatory (as opposed to physical) takings. Williamson County thus misread Tennessee law. We can’t expect the Justices to be mavens of Tennessee law. But it is now clear that the Williamson County ripeness holding is based on nonexistent Tennessee law and is thus unsound. Would the Williamson County case been differently decided had the Supreme Court Justices understood that the plaintiff had no Tennessee state law remedy? One would hope so.

So in addition to Williamson County’s many other faults that unleashed a torrent of scholarly invective directed at its merits, and inspired four concurring Supreme Court Justices to suggest in the San Remo Hotel case that Williamson County should be reconsidered, we now have a definitive interpretation of Tennessee law by the Tennessee Supreme Court which tells us authoritatively that Williamson County was erroneously decided as supposedly allowing regulatory taking actions in Tennessee state courts, when in fact it did no such thing. From which follows the ineluctable conclusion that the doctrinally deficient, and intellectually rickety “ripeness doctrine” foisted on this long suffering field of law by the Williamson County case and its progeny, stands on feet of clay.

And as for the would-be mavens who have been so eager to rag on the Supreme Court Justices for trifling and easily correctable, non-dispositive misstatements in their opinions, their efforts would be better employed in spotlighting Justice Blackmun’s Williamson County blunder that has now been exposed by the Tennessee Supreme Court as incapable of supporting the wretched Williamson County ripeness rule.

            Which brings us back to the beginning and all those classy bloggers who profess to be upset by minor judicial gaffes in recent opinions. They would be better advised to call on the court to acknowledge its mistaken perception of state law that led it to create what has become known as the Williamson County “ripeness mess” and to rectify it at the earliest opportunity.

 

 

An Attempt to revive Redevelopment in California

Steve Greenhut is a Southern California reporter with much experience in the field of eminent domain, so we welcome his article on an ongoing effort in California to revive redevelopment under a slightly different name. You may recall that redevelopment was abolished in California a short time ago when Governor Jerry Brown persuaded the legislature to do so, not because of his respect for private property rights, but in order to get his mitts on the millions that until then were being diverted from municipal tax revenues, and went into the pockets of redevelopers and municipal bond holders in order to create private, profit-making development projects, usually, but not always, shopping centers, car malls, etc. Brown wanted to divert that money to the State in order to plug some holes in the state budget.

Greenhut has now written an admirably concise article on this subject, relating the sneaky political efforts to revive redevelopment in California. In appears in the City Journal as Redevelopment Resurrection, City Journal (California), May 22, 2014. You can read it by clicking on http://www.city-journal.org/2014/cjc0523sg.html Do it. It’s a good read and reading it will be worth your while.

 

Follow up. Another article that strikes the same note and reminds us that the bad guys never sleep, see Dana Berliner, Eminent Domain Abuses Are Making a Comeback, Wall St. Jour., May 16, 2014. Dana Berliner, of the Institute for Justice and the author of this piece, was a lawyer for the property owners  in the case of Kelo v. City of London (2005), so she knows whereof she speaks.

 

Lowball Watch — Wisconsin

The Beloit Daily News reports the results of a taking of a 4.08-acre parcel by eminent domain for a Beloit school, as follows:

The Commissioners awarded $203,000, but on an appeal to a trial court, a jury awarded $382,000 after a three-day trial. The report provides no information as to what was the legal or factual issue that divided the parties.

Hillary Gavan, Jury in Eminent Domain Trial Nearly Doubles the Bill, Beloit Daily News, May 22, 2014. For the full story, click on http://www.beloitdailynews.com/news/jury-in-eminent-domain-trial-nearly-doubles-the-bill/article_bac00204-e1c1-11e3-a0cd-001a4bcf887a.html

New Law Review Article on Decline of American Cities and the Role of Eminent Domain in that Fiasco

Any day now a new law review article should be published. It’s entitled Detroit and the Decline of Urban America, 2013 Mich. St. L. Rev. 1547, and it was authored by your faithful servant. It deals with the causes of decline of older American cities; what caused their populations to leave en masse and move to the suburbs, leaving behind empty swaths of urban desolation (If you want to see how desolate, go to Google, type in “ruins of Detroit” and hit “enter.’ Here are some samples). You’ll get the picture — literally and figuratively. And Detroit isn’t the only one like that, even if it presents us with the worst case scenario come alive. There are others, just as bad, except that they haven’t [yet] filed for bankruptcy — Gary, Camden, Cleveland, Pittsburgh, Newark, Youngstown, Trenton, et al.

Ballroom, Lee Plaza Hotel

So what happened? The people who used to live in these cities did not just up and move out on a whim, did they?

In that article, we identify and take note of six factors that were instrumental in bringing about the mass abandonment of cities:

“First, there was the creation (under the GI Bill) of a large, new, college-educated middle class with all its middle-class aspirations and appetites, including a desire and the means for acquisition of middle-class suburban housing.” The post-World-War II availability of low-cost homes in the suburbs (like Levittown) was the starting gun that sent middle class urban populations to move outward.

“Second, middle-class city dwellers were motivated to leave cities to escape riots that swept cities beginning in the 1960s, and the increasingly catastrophic decline in the safety and quality of public schools—to say noth-ing of forced bussing of middle class-children to decrepit and unsafe inner city schools.

“Third, they were escaping rising urban prevalence of drugs and a rise in urban crime, notably in the 1970s.

“Fourth, they were responding rationally to the physical devastation brought about in cities by construction of federally financed highways and by urban redevelopment, which, at its peak, displaced hundreds of thousands of urban dwellers annually.” 

“Fifth, they were taking advantage of generous government tax and housing policies as well as federally guaranteed mortgage loans that enabled them to buy desirable suburban homes on an unprecedented scale, thus granting them access to an agreeable lifestyle that until then was the prerogative of the well off. Feminism brought better paying jobs to women who could now pool their resources with those of their husbands, and thereby afford homes in the suburbs, that were far better than what was available in declining cities.

“Sixth, the suburban family home turned out to be a hugely successful, tax advantaged investment that provided middle class families not only with shelter, but also with unprecedented nest eggs for their old age. Even after the housing crash of 2008, the ownership of a family home continues to be viewed as a highly desirable asset as shown by the current rapid rise in the prices of family homes. To borrow Willie Sutton’s memorable phrase, “That’s where the money is.” And that is also where the middle class is, and that is where it means to stay.” 2013 Mich. St. L. Rev. at 1563-1564. And remember. most homes are not underwater; their owners, especially those who bought their homes 20-30 years ago, are still enjoying large equities that provide them, even today, with undreamed-of nest eggs for their old age. Bottom line: Those little two-bedroom, $10,000 homes of the 1950s are now selling for around $400,000. Not bad!

But not in Detroit whose population has shrunk by half since the 1950s, and where you can buy a house for $15,000 to $30,000.

You may also find interesting the 1944 statement of then Detroit Mayor Edward J. Jeffries to a congressional committee (at p. 1550), accurately predicting that laying out of freeways through cities would cause city populations to take advantage of them in order to move for the suburbs, using those freeways to commute to city jobs, but leaving cities in a state of devastation and eventually causing them to file for bankruptcy.

And finally, don’t miss the picture at p. 1560, depicting the 1950s mass move-in into new suburban homes out of cities. Thus, you could say that Uncle Sam bribed your Mom and Dad to leave cities and move to the suburbs by providing all sorts of funds and federal tax advantages, so that leaving increasingly shabby and dangerous cities and moving to the suburbs, became a no-brainer.

It’s all there, and more. So give it a shot. The article is coming out (from the printer) right now and should be in circulation presently.

 Sic transit gloria mundi.

Be Still, My Heart! Second Circuit Rules for a Property Owner In a Stinging Inverse Condemnation Opinion

Folks, If you have any interest in inverse condemnation, particularly regulatory takings, you have to take a break from whatever you are doing and read the opinion of the U.S. Court of Appeals for the 2nd Circuit, reversing the dismissal of a taking claim by a lower court. Sherman v. Town of Chester, 2d Cir., No. 13-1503-cv, filed May 16, 2014. It’s must reading for several reasons. First, for its treatment of the municipal smartasses who removed a property owner’s taking case from state court to federal court and then had the chutzpah to argue that the case must be dismissed because it should have been litigated in state court. No, we are not making this up. And second, for the court’s detailed dissection of the town’s abusive treatment of the property owner. You just gotta read it — this case goes Catch-22 one better and the court says so in plain words and in painful detail.

What is amazing is how many federal judges swallow such intellectual and moral crap whole in other cases and dismiss them, thereby denying the aggrieved property owner access to adjudication of both his state and federal constitutional claims on the merits in any court (as noted by four U.S. Supreme Court Justices in  the San Remo Hotel case) .

Anyway, the opinion presents a routine scenario in which the owner who wanted to build some homes on land zoned for them was subjected to repetitive and openly abusive treatment whereby whenever he complied with what the city wanted, it asked for more or for something different. The poor guy died while this litigation was pending, so the victor in this case is his widow. You just gotta read it for yourself.

Postscript. We wanted to give you some more detail on what the court had to say in its opinion, but our colleague, Robert Thomas beat us to the punch in his blog www.inversecondemnation.com so you may as well go there for that additional information, and spare us the duplicative task of repeating it. But do go there and read Robert’s stuff and commentary. You won’t regret it.

 

 

Eminent Domain Mystery Novel

While surfing on the net we came across an outfit that is selling books and its current pitch pushes a mystery novel entitled “Eminent Domain.” We have no idea if it’s good or not, but we plan to read it if only to get an insight into how the lay folks see eminent domain. Here it is:

Eminent Domain: A Mitzy Neuhaus Mystery, Book 2 | [Traci Tyne Hilton]

Actually, it’s an audio book, so we’ll have to listen rather than read. Be warned, however. It takes over eight hours to play it. Still, if you are contemplating a long car trip, it might be just the thing.

Lowball Watch — New York

We are reliably informed that a New York trial court (what those folks call the Supreme Court) has entered judgment in favor of the condemnee-owner as follows. Condemnor’s appraiser opined to $2,075,000, but the court rejected that opinion because of condemnor’s erroneous use of highest and best use. It argued that such use was for a gas station (current use). The court found that there was a probability of zone change that would allow the valuation of the subject property to be valued for high-rise commercial uses, so it awarded $9,186,000 (rounded).

The case is 730 Equity Corp. v. N.Y. State Urban Dev. Corp., Index No. 1689/2012, judgment entered May 7, 204. The taking was evidently a part of the Atlantic Yards project.

To read the fact-intensive opinion go to https://mail.google.com/mail/u/0/?pli=1#inbox/145fbad7ce4cbc7c?projector=1