Monthly Archives: October 2011

California, Here I Go — More Slowly

Interesting dispatch on population migration trends from the Census Bureau. California’s population outflow has diminished. Whereas in 2005 some 201,000 people have migrated from California, by 2005, that figure was down to 71,000. Why the drop? People who own houses and would like to cash out and head out, can’t sell them, at least not at prices they insist on, so that a family home in la-la land has become, not just a family’s shelter and its major asset, but in terms of mobility, a ball and chain. See Jennifer Medina and Sabrina Tavernise, Economy Alters How Americans Are Moving, N.Y. Times, October 28, 2011, at A12.

Note that these figures refer only to California residents who head out. They do not include immigrants from other countries. So this appears to be a gringo phenomenon, with many small towns in the Central Valley becoming increasingly Hispanic, with official business transacted in Spanish, rather than English. But remember, houses are still considerably more expensive in California than most anywhere else, so the motivation to move out of state may have gone dormant (pending sale of the ol’ homestead) but it’s there and likely to revive once the housing market in California improves. People have come to realize that California is being grossly misgoverned and is well on its way to insolvency. So why not cash out your quarter-million-plus home equity while you can, and move to another place where that money can buy you another home free and clear, with six figures left over tax free?

Eminent Domain in China (Cont’d.)

More news from China. This batch has an informative twist. Our recent dispatches from China have dealt with peasants rioting because they were being displaced by the authorities from their farms, in order to turn their land over to favored developers. Click on But now, the current problems demonstrate the old verity that where a society disrespects the rights of some, sooner or later it will also do the same to the rights of others — including others who deem themselves to be immune to government lawlesness.

Today’s New York Times brings a dispatch from the exurbs of Beijing, informing us that questionable land seizures by the authorities have now come to the upscale Chinese, not just the peasants. (Andrew Jacobs, Harassment and Evictions Bedevil Even China’s Well-Off, N.Y. Times, October 28, 2011, at p. A4 — click here.) Inhabitants of World Famous Gardens, an upscale community populated by doctors, financiers, and retired government bureaucrats who thought themselves to be immune to government capriciousness, are being kicked out unceremoniously from their homes on three weeks’ notice. Compensation has been fixed uniformly at 1.6 million renmimbi (which comes to $252,000 per house). The problem, according to the homeowners, is that this figure is being uniformly offered to all houses, even though some of them are considerably more expensive.

But that is not the whole story. The owners complain that the real purpose behind this caper is to take land adjoining the proposed right-of-way in order to — you guessed it! — turn it over to the aforementioned developers. In other words, though they don’t use our terminology they say it’s a pretextual taking, as discussed by Justice Kennedy in the Kelo case, and they point to the fact that the government refuses to provide copies of the expanded right-of-way and any information on how it arrived at that rigid compensation figure, so you can’t tell to what actual use their taken land will catually be put.

So here is a lesson to be pondered. When these things happen, they don’t just happen to “them.” Once they become established practices, they can happen to you — yes, you. You don’t think so? Then ponder the case of Rosenthal & Rosenthal, 605 F.Supp. 612 (S.D. N.Y. 1985), where the condemnees sued in federal court and pleaded that their property was added to the Times Square redevelopment project in Manhattan in order to reconvey it to the Mayor’s influential friends. So what? said the court. Even if the taking was so motivated the question was whether the subject property was being taken for urban redevelopment. The improprieties charged by the owners may have been illegal under other state laws, but not under eminent domain laws — whatever the taker’s motivation, the use was the elimeination of blight which in New York can mean anything.

What we find interesting is that whereas the New York Times now sheds tears over the plight over those Chinese folks, it did nothing of the sort when similar improprieties were taking place right under its nose in Times Square.

Your Client, the Killer Whale

When people have it too good for too long, they start saying silly things in the belief that they are being profoundly serious. Given that premise, it was bound to happen sooner or later. PETA (that’s People for the Ethical Treatment of Animals), has filed a lawsuit in the federal District Court in San Diego, demanding that Orcas, aka killer whales, be declared to have the same rights as humans and therefore under the 13th Amendment to the U.S. Constitution should be freed from slavery in which they are kept by SeaWorld in San Diego. They should then be released to the custody of a legal guardian who would find a “suitable habitat” for them. You could call it a grown-up version (if that doesn’t do violence to the English language) of “Free Willy.”

Now, some poor federal judge in San Diego will have to cope with this meshuggas and come up with some way of tossing it out of court without incurring the wrath of the U.S. Court of Appeals for the 9th Circuit whose fiefdom includes San Diego, and which may just . . . No. Actually we don’t want to go there, or even think about is. But then again, hey man, it’s the Ninth Circuit. So who knows?

This bit of wackiness brings to mind how all this meshuggas got started. Back in 1972, U.S.C. Professor Stone wrote a law review piece entitled Do Trees Have Standing? — Toward Legal Rights for Natural Objects, 45 So. Cal. L. Rev. 450, in which he proposed what the title suggested. It was promptly picked up by Justice William O. Douglas who duly enshrined a citation to it in a Supreme Court opinion, thus putting Professor Stone on the map big time.

We always had trouble with substantive and procedural consequences of that proposition because if you are going to litigate on behalf of a tree as your client (which is why you would want it to have standing), how do you ascertain your client’s intent? Maybe, for all we know, a redwood tree is pining to become a backyard picnic table, as a wit once put it. Which would be bad enough since trees don’t say much. As a songwriter once put it, ” I talk to the trees but they don’t listen to me. . .” So if they don’t talk and don’t listen, it’s kinda hard to commuicate with them and get them to assist counsel in providing them with proper representation.

Then, before you knew it, environmentalits started filing these lawsuits captioned “Arizona Grey Squirrel v. United States,” or somesuch. Alas, no federal judge that I know of had the stones to order the plaintiff’s lawyers to produce the named plaintiff in court and ascertain whether he indeed authorized the filing of that lawsuit in his name. But judges, alas, are not noted for their sense of humor (except, of course, for Judge Alex Kozinski of the Ninth Circuit), so it never came to pass.

On the other hand, his Lordship who gets this case, may want to revive a medieval custom of ordering that the offending lawyer’s hand be chopped off and nailed to the courthouse door pour encouragement les autres. It might work. Then again it might not. Why would I say this? Because no less a personage than Professor Larry Tribe of Harvard has come down on the side of the plaintiffs, arguing that the 13th Amendment was written broadly, to address unforeseen circumstances, and could legitimately be applied to animals.  Gee, we can’t wait to see what professor Tribe will have to say about the involuntary servitude to which cattle, sheep, chickens, et al. are routinely subjected on a large scale. And what about Lassie, and all those laboratory monkeys and  K-9 police dogs? Surely under the Equal Protection Clause of the 14th Amendment they would be entitled to emancipation, and treatment no worse than killer whales. Anything less would be intolerable specieism.

For a copy of the Associated Press article bringing us this dispatch, see David Crary and Julie Watson, SeaWorld Accused of Enslaving Orcas, L.A. Daily Journal, October 26, 2011. Enjoy!

Afterthought. What if this case winds up in the Ninth Circuit, with Judge Kozinski assigned to write the opinion? Wow! That thought opens up possibilties for enriching the decisional law that are mind-boggling. So stay tuned, folks.


Utah Court Pulls Up Its Socks

We are pleased to bring some good news. The Utah Supreme Court has just backed down from an earlier bizarre rule of law it had laid down in Ivers v. Utah D.O.T., 154 P.3d 802, in which it held that severance damages caused by a loss of visibility effected by a partial taking, are payable only when the subject property is essential to the public project. Which was not a very bright rule because the diminution in value of the remainder is what it is regardless of the degree of necessisty of its taking. Which is to say that a taking that may not be essential to the project causes just as much harm as one that is when it blocks visibility. It is the blockage of visibility, not the degree of necessity for the taking that causes the economic harm.

Now, the court has retreated from the deficient Ivers ruling in Utah D.O.T. v. Admiral Beverage Corp., 2011 UT 62, opinion filed October 18, 2011, and has concluded:

Ivers contravenes our constitutional requirement to provide just compensation to those citizens whose property is taken by the state. We therefore conclude that Ivers was wrongly decided. . .”


Redevelopment Agency Giving Money Away in Los Angeles

Just when you think you have heard all the absurdities emanating from redevelopment agencies, another one comes along. Today’s Los Angeles Times reports that the city redevelopment agency is giving money away. Check out Steve Lopez, Hollywood Businessman Criticizes Redevelopment Grants, L.A. Times, October 26, 2011, at p. A2 — click here.

Here is how it works. The L.A. Community Redeveloppment Agency (CRA) has announced that if you are a Hollywood businessman you can get a $200,000 “loan” for maintenance of your building. Why the quotation marks? Because the loan isn’t a loan — it’s a gift of public funds. The gimmick is that if you take the “loan” and keep up your property for 10 years (which we thought sensible business people do anyway) you don’t have to pay the “loan” back. You can just keep it. This was mind blowing to hear. The rest of us have to use companies like Fresh Loan to help us out, but with these types of loans you do have to pay the money back overtime.

What brought this news item to a head is the statement of a civic-minded businessman in Hollywood who refuses to take this money because he sensibly believes that to do so would be wasteful, particularly when the City of Los Angeles is so strapped that it has had to lay off teachers and underutilize cops and fire fighters. Sounds reasonable to us.

So, as we are fond of concluding these dispatches: your tax money at work.

But wait. We almost forgot. After Steve Lopez, the L.A. Times reporter who wrote this story, got in touch with the CRA and inquired, he was told that the availability of these funds is conditioned on creating new jobs. Really? It turned out that the CRA paperwork said nothin’ about no jobs, and neither did two other CRA functionaries who spoke on the subject.

Now comes the best part. As Mr. Lopez was strolling down Hollywood Boulevard, it dawned on him that “[s]o many businesses look so shabby, that [the CRA’s] $1.5 million [budgeted for this program] would barely make a visible difference along a several-block stretch. So he asks a sensible question: why reward neglectful owners’ resistance to proper maintenance with a handout even if it would create a few jobs? Why indeed?

Epstein on Chinese and American Property Rights — A Good Read!

The Hoover Institution Journal carries an article by Professor Richard Epstein, giving us his impressions of the Brigham-Kanner property rights conference held last week in Beijing, and his reflections on the Chinese and American property systems, with emphasis on eminent domain as practiced in both countries. He notes the irony implicit in the fact that communist China is moving toward strengthening the institution of private property, while the United States is eroding it. Our favorite quote:

“When it comes to identifying the many sources of American decline, one item that deserves a high place on that list is the gratuitous destruction of private property rights, a process that has been aided and abetted by the Supreme Court for too long. It is indeed ironic that as China tries to codify a system of private property rights, the United States seems all too willing to move in the wrong direction.”

Still, this is only a trend, not reality. At least not yet. Epstein aptly describes eminent domain in China as “Kelo on steroids.” That it is.

The article is Richard Epstein, Going Red on Property Rights, Hoover Institution Journal, October 25, 2011 – click here. Don’t miss it.

Folow up. For another take on Epstein in Beijing, take a look at today’s post on Robert Thomas’ blog Satisfaction guaranteed.

Eminent Domain in India

We just came across an interesting article from The Hindustan Business Line – Sudanshu Ranjan, New Legal Regime Gets Under Way, October 23, 2011 — click here. It provides a concise summary of how Indian right-to-take law evolved, and the sad story is not all that much different  from the gradual judicial erosion of property owner rights over here.

“The definition of ‘public purpose’ should have been narrowed down to the minimum, little scope for discretionary interpretation. The Land Acquisition Act, 1894 did not define the term ‘public purpose’, and so, it was left to the courts to interpret it.”Even in 1971, when the right to property was a fundamental right, the Supreme Court, in Jage Ram v. State of Haryana (1971), rather surprisingly, took a very wide view of the term and left it to the state governments to define the terms. Prior to this, the courts had protected the right to property, which led to several Constitutional amendments.

“The logic behind ‘public purpose’ is that the state would always act in the larger public interest.

“However, recent experiences have belied this assumption. Land acquisition in Greater Noida was set aside because the land use was changed without any justification to benefit builders. The state acted like a property dealer.

“For over two decades, the state has been using its power to acquire land for use by private industries whose aim is to earn profit above all else.”

A familiar story, isn’t it? With a track record like that it’s small wonder that digruntled Indian farmers (who don’t have much to begin with) are turning to violent Maoist rebels for help. But at least Indian courts draw the line at the state acting as a “property dealer” for private, profit-making enterprises.

For our earlier dispatch about Indian eminent domain law, click here.


California High-Speed Rail (Cont’d.) — Is the Planners’ Doo-Doo About to Hit the Fan?

Things have been quiet on the California high-speed-rail front for awhile, but now, the Los Angeles Times has ended the cease-fire with a bang — the bang taking the form of a front-page article addressing the impact of the proposed new railroad right-of-way on California communities in its path. Ralph Vartabedian, Bullet Train Plan Would Leave Path of Destruction, Los Angeles Times, October 23, 2011, at p. A1.

The focus of this story is the rail builders’ plan to have the high-speed “bullet trains” zoom on a viaduct over a high school in Bakersfield.

“Even though freight trains already lumber not far from from the campus, these elevated trains could rocket by on a viaduct at up to 220 mph every five minutes, eye level with the school library and deafening the stately outdoor commons where students congregate between classes.”

And that isn’t all.

“Across the length of [California’s] Central Valley, the bullet train as drawn would destroy churches, schools, private homes, shelters for low income people, animal processing plants, warehouses, banks, medical offices, auto parts stores, factories, farms, fields, mobile home parks, apartment buildings and much else as it cuts through the richest agricultural belt in the nation and through some of the most depressed cities in California.”

This is a good article because for a change it presents the problem from the point of view of the impacted communities, rather than the would-be railroad builders who in the old days used to dismiss the justified complaints about how they went about their task, by invoking the flippant response that “That’s the price of progress.” Of course, they never did explain why they and their clients should get the “progress” while the innocent folks in the path of their latest route should be the ones to pay the price.

We tend to take the position that if there is a price to be paid for progress — and there always is — it should be paid by its beneficiaries, not its victims. That’s not only good economics and good morality, but also good law.   California Civil Code  Section 3521  says, “He who takes the benefit must bear the burden,” or as we like to put it, there’s no such thing as a free lunch. The burdens — economic, social and personal — must fall somewhere, and we see no reason why they should not fall on those who are benefitted — i.e., by the community in whose name the project is being undertaken. As Justice Oliver Wendell Holmes put it in Euclid v. Ambler, the community is only entitled to get what it pays for.

So while it remains to be seen to what extent the state railroad builders will try to run roughshod over the folks in the path of that railroad, and to what extent California courts will lend a hand in facilitating the government’s kleptocratic endeavors, we suggest that you not hold your breath waitng for justice.

Oh, we almost forgeot. Do you believe that those 220 mph bullet trains will run between Southern California and San Francisco every five minutes? If you do, get in touch — we’ll give you a good deal on the Brooklyn Bridge.

A Word of Caution on that Stimulus Program

For an interesting view of the federal stimulus program, that challenges the government’s conventional wisdom, check out an interesting op-ed piece in the Washington Post. Chris Edwards, Infrastructure Projects to Fix the Economy? Don’t Bank on It, Washington Post, October 21, 2011.

Edwards’ point is that major federally-built or financed projects, notably but not exclusively dams, have been known to produce more harm than good, and on occasion have caused major catastrophes. No arguing with that. But since the effects of these projects can go either way, their construction should be preceded by careful weighning of their honestly projected cost and and equally honestly assessed benefits. But typically, they are presented as panaceas, particularly in bad economic times, so that their benefits are touted without sufficient consideration  given to the question of whether they are net benefits, and even if so, whether they will exact a high price — economic and human — that an informed society may find intolrable.

We recall how way back in 1966, a California Highway Commissioner confessed that the actual highway costs consistently exceeded the estimates by 32%, “most of the increment coming from additional right-of-way costs.” Joseph C. Houghteling, Confessions of a Highway Commissioner, Cry California, Spring 1966, 29, 30. There is reason to believe that things have not changed much since then, as suggested from the frequency of the “Lowball Watch” feature of this blog.

Call the cost-benefit debate the way you prefer, but this is still a good, thought-stimulating read — click here.