Source: https://www.inversecondemnation.com/inversecondemnation/2019/02/index.html
Timestamp: 2019-04-22 12:52:32+00:00

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Later today (starting at 1pm ET), our colleague Edward Thomas is chairing an ABA-produced webinar on "Low Income Populations: Underrepresented Socially, Overrepresented as Victims of Natural Disasters: Using the Law to Solve a Serious Problem."
As in other areas of life, when natural disasters strike, it is often the owners of modest means who are the hardest hit. Floods, wildfires, sea level rise, you name it. And Ed has been there: he's a former FEMA guy, and currently the President of the Natural Hazard Mitigation Association who understands that property rights have to be respected in these situations.
Find out more information about the program and register here.
GREEN, C.J. A land owner brought this action in the Superior Court, claiming that local land use regulation effected a taking of her property, requiring just compensation under the Fifth Amendment to the United States Constitution and art. 10 of the Massachusetts Declaration of Rights. This appeal presents a question of first impression in Massachusetts: whether the land owner is entitled to have her regulatory taking claim decided by a jury. We conclude that the jury right does not attach to such a claim, and that the judge erred in denying the defendants' motion to submit only the question of damages to a jury. We further conclude that the evidence presented at the trial did not, as matter of law, support a claim of regulatory taking. We accordingly reverse the judgment in the plaintiff's favor and direct that judgment enter for the defendants.
Slip op. at 2 (footnote omitted).
The facts leading to the regulatory takings claim are pretty straightforward: the plaintiff owned a vacant lot in a residential subdivision, and from 1975 to 2005, the plaintiff and her predecessor owners (she inherited it from her parents) did not take steps to develop it. But then she did, undertaking several of the things you usually do in order to get a property ready to develop: she hired land planning consultants, architects, and planners to craft plans and applications. She also informed the town conservation commission that she intended to build a home on the property, because "[a]s submitted, the plaintiff's plans required several variances from the wetlands protection bylaw, as they did not comply with its requirements covering coastal banks, salt marshes, or land subject to coastal storm flowage." Slip op. at 4.
When the commission denied the variance, she sued in a Massachusetts court for a regulatory taking, seeking compensation. She asked that a jury determine both liability and damages. The jury concluded that the application of the wetlands law was a taking, and awarded her $640,000.
The Appeals Court concluded that the property owner did not have a right to a jury trial under the Massachusetts Declaration of Rights because regulatory takings and inverse condemnation claims did not exist at the time the Massachusetts Constitution was adopted (1780), and regulatory takings claims cannot be analogized to tort claims.
Regulatory takings and inverse claims didn't exist in 1780.
Only in 1922, when the U.S. Supreme Court ruled in Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922) that if a regulation went "too far" was the cause of action recognized.
Thus, the issue is whether a takings claim can be analogized to any common law claim that was around back in the day.
"We are not persuaded that an ordinary claim of a regulatory taking sufficiently resembles an action in tort to warrant a conclusion that the claim is analogous to such a claim for purposes of recognizing the right to a jury trial." Slip op. at 7.
This isn't a physical invasion taking, so it is not like common law trespass.
This is a Penn Central-type claim, and "[t]he claim itself, and the balancing test employed to evaluate it, find no apt comparison in actions recognized at common law in 1780; it is instead a 'wholly new' cause of action." Slip op. at 9 (footnote omitted).
Citing the dissent in City of Monterey v. Del Monte Dunes at Monterey, Inc., 526 U.S. 687 (1999), the court concluded that takings, unlike tort, are not about whether the defendant did a wrongful act. Takings liability only attaches to lawful government conduct.
without just compensation, and both ultimately result in the same remedy -- just compensation -- a claim of regulatory taking involves a preliminary (albeit significant and complex) question whether a taking has occurred at all. It is that determination of liability, based on the multifactored Penn Central test we have discussed, that is entirely different in kind from any question undertaken in a traditional direct condemnation action. See, e.g., Del Monte Dunes, 526 U.S. at 712-713." Slip op. at 10.
And what of the majority opinion in Del Monte Dunes, which, last we remember, came down on the side of a right to jury trial? The court concluded that the result there was driven by it being a 42 U.S.C. § 1983 claim, and as the Court noted there, the decision did "not address the jury's role in an ordinary inverse condemnation suit."
2. Investment-backed expectations. The owner inherited the property. That alone "does not by itself defeat a claim," slip op. at 15, but here, the owner didn't invest much in the property except pay property taxes, and spend a few hundred on some soil testing. Any compensation "would constitute a windfall."
3. Character of the government action. No physical invasion. Generally-applicable environmental regulations that are sourced in harm mitigation. And you know what that means.
** One more thing, about the photo of the John Adams courthouse in Boston. One of the only places I know where an intermediate appeals court is actually HIGHER than the Supreme Court. Here, the SJC is located on the second floor, the Appeals Court on the top.
If you can make sense of the Montana Supreme Court's analysis in Letica Land Co. v. Anaconda-Deer Lodge County, No. DA 18-0249 (Feb. 5, 2019), we are all ears, because we sure cannot.
The court concluded that the county's actions in furtherance of its claim to own a road located on Letica's property -- including removing a dirt berm and encouraging the public to use the road -- could not be a taking, only a tort.
The county's defense to the takings claim was "that a temporary physical invasion was done under claim of right and therefore did not amount to a taking of Letica's private property." Slip op. at 4-5.
The court agreed, relying on Langford v. United States, 101 U.S. 341 (1880) for the proposition that "if the government mistakenly asserts the right to use its own property, and the property in fact belongs to another, the true property owner's remedy is in tort and the mistake does not amount to an unconstitutional taking." Slip op. at 5.
It is to be regretted that Congress has made no provision by any general law for ascertaining and paying this just compensation. And we are not called on to decide that when the government, acting by the forms which are sufficient to bind it, recognizes that fact that it is taking private property for public use, the compensation may not be recovered in the Court of Claims. On this point we decide nothing.
Langford, 101 U.S. at 343-44. A few years later, of course, Congress would grant the Claims Court jurisdiction over significant takings claims in the Tucker Act.
Here, the County acted under a claim of right when it removed the dirt berm. Specifically, the County relied on county records, maps, surveys, and other evidence related to historical use of the road before reaffirming the upper branch. Although the County erroneously relied on the initial petition and this Court subsequently concluded that the public prescriptive easement was extinguished by reverse adverse possession, the County’s actions were reasonable. The County’s conduct was reinforced by the District Court order denying Letica’s request for a preliminary injunction, in which the District Court concluded that the County was likely to succeed on the petition regarding the upper branch.
¶14 Pursuant to Langford, the County’s good faith reliance on the petition, and other evidence supporting its petition, preclude Letica’s claim that a taking occurred.
Sorry, we just don't get this. An allegation of a physical invasion pursuant to an erroneous claim that the government, not a private party, is the owner of the land. Why doesn't that state a claim for a compensable taking, if proven true?
The South Carolina Constitution, like the Fifth Amendment and just about every other state constitution, prohibits takings of "private property" without just compensation. See S.C. Const. art. I, § 13(A).
In Georgetown County v. Davis & Floyd, Inc., No. 5627 (Feb. 13, 2019), the South Carolina Court of Appeals answered no. There, the County asserted an inverse condemnation claim against the City of Georgetown and SCDOT, alleging that "while engaged in a joint water drainage project, [they] altered the water table, causing sinkholes to form and damaging public buildings and real property owned by the County." Slip op. at 2. The defendants sought dismissal for failure to state a claim.
The County, the opinion noted, "urges us to interpret 'private property' as used in the Takings Clause to mean any property not owned by the condemnor, here the State." Slip op. at 2-3.
The court rejected that assertion because the "ordinary and popular" meaning of the term "private" (as shown by a dictionary, among other sources), means that the property is restricted to a particular person, group, or class.
We therefore hold the term private property as used in the Takings Clause of the South Carolina Constitution applies only to property owned by a private citizen, private corporation, or non-public entity. It does not encompass property owned by the State, its agencies, political subdivisions (including counties and municipal corporations), or other public entities.
Some states agree. See slip op. at 4 (citing Bd. of Water Works Trs. of City of Des Moines v. SAC Cty. Bd. of Supervisors, 890 N.W.2d 50, 71 (Iowa 2017); Metro. St. Louis Sewer Dist. v. City of Bellefontaine Neighbors, 476 S.W.3d 913, 916–17, 923 (Mo. 2016) (en banc)). Federal law is a bit different, and the "United States Supreme Court has held the federal Takings Clause applies when the federal government takes public land owned by a state or its political subdivisions." Slip op. at 4. But hey, that's federal law, and the court noted it was interpreting South Carolina's definition of private property.
Next, (and this one is for you municipal-law types), the court concluded that as a "creature of the state," counties do not possess "a separate sovereignty." Slip op. at 5. "Accordingly, we hold the County may not bring an inverse condemnation claim against its 'creator' the state." And just because the County has home rule power doesn't change that.
Finally, the court concluded that the definition of "person" in South Carolina's eminent domain statutes does not change the result.
Here's the latest in a case we've been following, involving what Colorado calls "bad faith" condemnations.
In this order, the Colorado Supreme Court has declined to review the Court of Appeals' conclusion that a taking ostensibly to preserve open space and a buffer zone between two municipalities, was an invalid exercise of the eminent domain power because the true reason for the taking was to prevent the condemnee-municipality from luring a big-box retailer, King Sooper, to its territory and away from the condemnor's.
So even though the case has ended with a whimper and not a bang, this does mean that the Court of Appeals' hard look at the actual motives of the condemnor -- and not merely its stated purpose -- is the way to do things. The court examined the factual record, and not just the stated reasons for the taking, and tested whether the condemnor's claim that it needed a buffer zone could not be satisfied by means other than taking the property from Erie. And finally, that even some public benefit will not save a taking if the condemnor's motive is bad.
Be sure to save the date on your calendar for the 16th Annual Brigham-Kanner Property Rights Conference, at the William and Mary Law School in Williamsburg, Virginia.
Michael M. Berger, an attorney at Manatt, Phelps & Phillips and the 2014 Brigham-Kanner Prize recipient, considers Eagle one of the finest property scholars of his generation.
Andrew Brigham, an attorney from Brigham Property Rights Law Firm, PLLC, in Jacksonville, Fla., and a member of the Brigham-Kanner Conference Coordination Committee, says that Eagle’s scholarship has long been a “beacon of light” that allows practitioners like himself to navigate the deep waters of regulatory takings.
Read the entirety here. And then hold the dates on your schedule.
This is the best bar-academy-bench conference, and is specifically designed so that those who study the theory of property law and property rights understand what we in the practicing bar and bench are doing.
Professor Eagle joins a list of luminaries in our field, and many of the past BK Prize winners attend.
SF Chronicle: "California's strict wildfire liability rule hangs over bankrupt PG&E"
JD Morris has the story at the San Francisco Chronicle, "California's strict wildfire liability rule hangs over bankrupt PG&E."
The story is about inverse condemnation of course, and how California law applies that doctrine in cases involving what look like natural disasters, most notably the state's recent experiences with major wildfires.
The wildfire fund alternative Paulo identified could be evaluated by a new committee focused on wildfires and utilities that was authorized by Dodd’s bill, SB901. Gov. Gavin Newsom appointed his three members to the committee just last month, and Dodd said it “absolutely” makes sense for them to study the issue.
Such a fund could accomplish the same goal as inverse condemnation by providing a source of funds for a utility to draw on to make victims whole when power lines cause fires through no negligence on the company’s part.
In a 2-1 decision, the appeals court in San Francisco held that Stockton could treat a certain inverse condemnation claim just like any other unsecured claim in its bankruptcy case, putting it toward the back of the line and allowing the city to jettison the debt. Thomas said the case, which involved a land dispute, has some parallels to PG&E’s situation.
But Douglas Baird, a law professor at the University of Chicago, said he doesn’t think the case will prove decisive on how wildfire victims are treated in the PG&E bankruptcy.
“The effect of the Ninth Circuit’s majority opinion is they’re just saying these are ordinary, unsecured claims in bankruptcy that can be discharged,” Baird said after reviewing the opinion. “But they’re not saying that somehow they’re unusually low” priority.
Check out the entire piece here.
At its most basic, pooling is the joining together or combination of small tracts or portions of tracts to create sufficient acreage to receive a drilling permit under applicable state spacing rules and regulations, and for the purpose of sharing the production from the pooled unit among the pooled interest owners.
Often, pooling is done voluntarily. That is, interest owners agree to the benefits of the combined acreage. Most oil and gas leases contain provisions allowing the lessee to pool the acreage covered by the lease; sometimes this right is virtually unlimited.
At times, however, there are unleased mineral interests which makes voluntary pooling impossible. In such a case, many states (but not all) provide for “statutory” or “forced” pooling whereby unleased mineral interests are combined, even without the consent of the mineral interest owner. The policy behind forced pooling is that a mineral interest owner who refuses to enter into a lease should not be permitted to forestall development and production of the oil and gas resources.
In short, those property owners who don't want to participate in oil and gas exploration (including fracking) on their land are forced to do so, on the theory that they can't stand in the way of their neighbors exploitation of their properties.
We've been following that issue and its takings aspects because one of our students in last fall's William and Mary property rights class wrote about forced pooling for his final paper (which was really good, and I'm hoping that he pursues publishing it as an article).
In Kerns, property owners who were forced into forced pooling under Ohio's statute sued in federal court alleging a § 1983 violation, claiming a taking (both lack of public use, and a denial of compensation), and violation of their due process rights. The District Court rejected their claim, and the Sixth Circuit panel affirmed.
The opinion acknowledged that under Ohio law, property owners generally have rights in the minerals below the surface.
But Ohio law also recognizes "correlative" rights, the right of an owner to exploit oil and gas without needless waste. Slip op. at 10.
The court pointed to other states, which have universally concluded that forced pooling is not a taking of a property owner's mineral rights. Slip op. at 11.
Next, the court concluded that Ohio's regulation of oil and gas rights is a proper exercise of the state's police power. Slip op. at 12 ("That power is exercised in the service of protecting property rights by requiring a just, orderly, and efficient process for neighbors to extract common resources. Each landowner’s property interest in the minerals remains intact; it is simply regulated.").
Thus, no taking of the subsurface minerals.
As for their separate argument that forced pooling takes their property by physically occupying their subsurface land by horizontal drilling and leaving fracking waste behind, the court concluded that the "mere presence of waste" wasn't enough. Slip op. at 13 ("But alleging a party's mere presence below the ground is not enough to make out a takings claim," because "Ohio's actual-interference requirement means that the landowners' property interest in the space beneath their land springs to life only if Chesapeake's drilling 'actually interfere[s]' with their 'reasonable and foreseeable use of the subsurface.'").
We thought physical invasion was enough, and that damages -- are not an element of a property owner's federal physical takings claim, no matter how state law defines the property. Did we miss something from Kaiser Aetna and Loretto? The wrong in physical invasion cases are the loss of the right to exclude, one of those fundamental property rights which cannot be defined away without compensation, right?
The opinion sort of blew by the private takings argument in the property owners' claim. If the statute is designed to benefit those neighbors who want to exploit their own subsurface oil and gas -- but are prevented from doing so by the holdout owners -- does the statute make the correct findings as required by Midkiff to show a rational basis public use? The court did not address that question.
Thus, we think the focus of the analysis should have been more on the compensation question: if the purpose of the physical invasion is public, is the compensation which the property owners receive under the forced pooling statute sufficient?
Will there be more? As we noted above, the questions these type of cases present have not really been analyzed well. So yeah, maybe more coming.
We suppose we should not be too surprised by the U.S. Court of Appeals for the Fourth Circuit's panel opinion in Mountain Valley Pipeline, LLC v. 6-56 Acres, No. 18-1159 (Feb. 5, 2019), which concluded, like the Third, Sixth, and Eleventh Circuits did recently, that a private condemnor may obtain immediate possession of property that it may condemn, even though Congress did not delegate the quick take power to those private condemnors in the Natural Gas Act.
After oral argument, we had a faint hope that the panel might see things differently. See "4th Cir Judge In Pipeline Arguments: "Condemnation is one of those monarchy things" - Is Immediate Possession Unconstitutional When Congress Has Not Delegated That Power To A Pipeline?"
But alas no, it was not to be. All three judges concluded that this case is "on all fours" with the Fourth Circuit's earlier decision in East Tennessee Nat. Gas Co. v. Sage, 361 F.3d 808 (4th Cir. 2004), which held that even though Congress did not delegate the quick take power in the NGA, a preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure could achieve the same result, and thus there was no running room. Like the other courts which have analyzed the issue (incorrectly, in our view), the Fourth Circuit panel concluded that the pipeline company's summary judgment on the three predicates under the statute, means that the pipeline has what the courts call the "substantive" right to condemn.
The panel’s rationale not only violates the well-worn rule of statutory interpretation of eminent domain statutes (they must be liberally read in favor of the property owner, and strictly construed against the condemnor), but also reflects a fundamental misunderstanding of the eminent domain power, and process. Federal statutory takings become inevitable only when title transfers. And only then can the condemnor get possession. Here, by contrast, the panel acknowledged that title would not transfer until the end of the case, but nonetheless allowed possession.
In short, the "substantive" right here isn't the power to institute a condemnation action. That is the only thing which a private NGA condemnor meeting the statute's three-part test gets. No, the substantive right is the actual taking of the property, which can only occur in these cases when title transfers. And that only can happen upon the condemnor's exercise of its option to buy (after the court establishes the price), the actual payment, and the transfer of title.
The property owners in the Fourth Circuit were under no illusions that they are fighting an uphill battle, given Sage.
Now that the latest panel has ruled, will we see more, such as an en banc petition to revisit Sage, or even a cert petition if that gets nowhere?
A short update from the west coast: the California Supreme Court late last week denied discretionary review in the case in which a California utility was arguing that it cannot be liable under that state's version of inverse condemnation because the utility, unlike a governmental entity, cannot automatically spread the cost of any judgment to all members of its constituency.
We posted the utility's petition here ("Electric Company: We Can't Be Liable For Inverse Condemnation For Cal Wildfires Unless We Can 'Unilaterally Recoup Costs From The Benefited Public Through Taxation Or Rate Increases'").
There are other cases raising the same issue coming up the pipeline, so stay tuned for more.
A heads up for our Hawaii appellate colleagues: on two separate occasions -- in two different cases -- the JEFS system has failed to notify us of events in the cases in which we are counsel.
The first case ended up being automatically "closed" by the system after an opinion by the Supreme Court, even though a post-opinion motion in that court was still pending. We were not provided notice the case had been closed, when we tried to find the case (by searching by case number), we received a "null search/case does not exist" response. Talk about one of those "moments." Only a call to the Clerk's office revealed that (1) the case was closed automatically even though the Court had not disposed of the pending motion; and (2) the motion was still under consideration by the Court. We are still unaware of whether, when the court eventually rules on our motion, whether we will receive notification given that the case is, according to the system, "closed." Apparently, a case is automatically closed after a certain period of time, even if there are pending post-opinion motions pending.
The second case was one in which we are amicus in the Intermediate Court of Appeals. While poking around the system in another case recently, we discovered that the ICA issued an opinion 5 months ago. Again, we did not receive e-notice despite being listed as counsel on the notification list. In the intervening months, a party sought and was denied reconsideration by the ICA (again, no notice to us), and successfully applied for cert. All without us having any idea these events occurred because we relied on the e-notification system. We have no idea why we did not receive e-notification. As in the other case, when we try to view the docket by searching for the case number, we get a "case does not exist" notice.
So here's the bottom line: until we can determine why and how the above occurred, use both belt and suspenders. Do not rely solely on the system to notify you, assuming that because you did not receive notification of events in your appellate cases, that something didn't happen. Apparently, the system has its own quirks, and isn't a 100% foolproof method of keeping up on our cases.

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