Source: http://apps.americanbar.org/litigation/committees/condemnation/news.html
Timestamp: 2018-01-21 02:23:21
Document Index: 642074046

Matched Legal Cases: ['§ 38', '§ 38', '§ 38', '§38', '§ 38', 'art?\n1', '§ 1983']

News & Developments | Condemnation, Zoning & Land Use | ABA Section of Litigation
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SCOTUS Confirms Temporary Flooding Is Compensable Taking
In Arkansas Game and Fish Commission v. United States, the U.S. Supreme Court recognized that temporary flooding can give rise to a takings claim, finding that “government-induced flooding can constitute a taking of property, and because a taking need not be permanent to be compensable, our precedent indicates that government-induced flooding of limited duration may be compensable.”
The Arkansas Game and Fish Commission filed a lawsuit against the United States, claiming that the U.S. Army Corps of Engineers, who managed the Clearwater Dam, were damaging timber on the commission’s wildlife management area. The corps adopted a water control manual to determine rates at which the water could be released from the dam. The corps began approving deviations to the manual to provide a longer harvest time to area farmers. However, as a result of the deviations, the commission’s management area was subjected to extended periods of flooding during the management area’s tree-growing season. The commission had repeatedly objected to the deviations and alerted the corps to the detrimental effect the flooding was causing.
The Court of Federal Claims found that the corps’ deviations caused six consecutive years of substantially increased flooding, altering the character of the property and causing “catastrophic mortality.” More than 18 million board feet of timber were destroyed or degraded. The Court of Federal Claims awarded the commission $5.7 million. However, the Federal Circuit reversed finding that government-induced flooding can only give rise to a taking claim if the flooding is permanent or inevitably recurring, citing Sanguinetti v. United States and United States v. Cress.
Justice Ginsburg, delivering the unanimous opinion of the Court, began her analysis with the purpose of the Takings Clause and the history of the Court’s treatment of government-induced flooding. Justice Ginsburg noted that seasonal recurring flooding, though temporary, has been recognized as a taking. These temporary takings in duration can be compensable, as established in the World War II era, where several decisions were issued as a “practical response to the uncertainties of the Government’s needs in wartime.” In these World War II era cases, the takings could be maintained against the government when the government action occurring outside the property gave rise to a “direct and immediate interference with the enjoyment and use of the land.” Justice Ginsburg concluded that the World War II era cases were examples of instances when government-induced flooding could constitute a taking of property, and because the taking does not need to be permanent to be compensable, government-induced flooding of limited duration may be compensable.
The government relied primarily on Sanguinetti v. United States, a case involving the overflow of a government canal onto the claimant’s land. In that case, the Court held there was no taking based on the principles of foreseeability and causation, because the government did not intend to flood the land or have any reason to expect such a result from construction of the canal. In addition, the claimant in that case had failed to show a causal connection between the canal and increased flooding. In its argument, the government focused on the Court’s use of the word “permanent” in the Sanguinetti opinion that stated “in order to create an enforceable liability against the Government, it is, at least, necessary that the overflow be the direct result of the structure, and constitute an actual, permanent invasion of the land.” Justice Ginsburg was not swayed by the government’s argument and declined to focus on the word “permanent,” as it only “appears in a nondispositive sentence” within the opinion and was composed to summarize flooding cases that the Court had encountered up to that point. Since Sanguinetti, Justice Ginsburg notes, the Court has had the opportunity to distinguish between permanent and temporary flooding and found that temporary floodings may be compensable.
The government further argued that the Court placed emphasis on the word “permanent” in the Loretto v. Teleprompter Manhattan CATV Corp. opinion. However, Justice Ginsburg quickly jumps to the first rule of case law and statutory interpretation that all attorneys should remember: Read on. Justice Ginsburg states that later in the Loretto opinion, the Court clarifies that “temporary limitations are subject to a more complex balancing process to determine whether they are a taking” and does not require permanence.
The Court’s ruling in Arkansas Game and Fish Commission v. United States finds only that government-induced flooding temporary in duration gains no automatic exemption from the Takings Clause inspection. In this particular case, the Court factored the time, the degree to which the invasion was intended or the foreseeable result of authorized government action, the character of the land at issue, and the severity of the interference. The Court of Federal Claims had found that the flooding was foreseeable, as the commission had repeatedly complained to the corps about the destructive impact the flooding was having on the management area. However, the Court of Federal Claims failed to address findings related to the causation, foreseeability, sustainability, and amount of damages, and so those factors were remanded for further proceedings consistent with the Court’s opinion.
Justice Ginsburg’s opinion creates no exception or rule, other than finding that occurrences of temporary recurring flooding are not exempt from Takings Clause liability, and instead, may be heard and considered under a more complex balancing process to determine whether there was a taking under the Takings Clause.
— Elizabeth Story and Christian Torgrimson, Pursley Friese Torgrimson, Atlanta, GA
NJ Senate Considers Changing Redevelopment Powers and Procedures
Legislation that would rework some of the procedures used by local governments to their redevelopment powers cleared a state senate committee earlier this week. Senate bill, S-2447, codifies certain protections to property owners that were decided in court decisions in recent years, and also would provide a negotiation alternative to using eminent domain in local redevelopment projects.
The bill codifies Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344 (2007), in which the New Jersey Supreme Court held that a blight determination requires a finding of a “deterioration or stagnation that has a decadent effect on surrounding property,” which could not ordinarily be applied to a large tract of vacant land. The Gallenthin court scrutinized the then-common use of municipalities in New Jersey of a standard in the Local Redevelopment and Housing Law, N.J.SA. 40A:12A-5(e)—a “stagnant or not fully productive condition” to justify that an area was blighted, or “in need of redevelopment”.
It also codifies Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), in which an appeals court held that adequate written notice of condemnation for redevelopment needs to be provided during the redevelopment planning process.
The other significant provision in the bill, and its companion bill in the state assembly, A-3615, is that local governments will be given an option as to whether they will be empowered to use eminent domain to acquire properties in redevelopment areas.
Pre-Condemnation Damages and Consideration of Future Development in FMV
Gwinnett County condemned property for a public roadway project designed to improve the area around Georgia Gwinnett College. The county appealed a jury verdict, alleging that the trial court erred by admitting evidence of pre-taking damages, failing to give a requested charge that pre-taking damages are not recoverable, admitting evidence about the proposed future development of the property that is hypothetical and speculative, and refusing to strike a juror based upon his difficulty understanding English. The court of appeals found no error and affirmed the trial court.
Colorado Supreme Court: Pipeline Co. Lacks Authority to Condemn
Since 1963, Sinclair Transportation Co. and its predecessors owned easement rights across certain properties in Weld County, Colorado. In 2006, Sinclair sought to amend the easement to install a 10-inch petroleum pipeline adjacent to their six-inch petroleum pipeline. Sinclair sought the additional easement to expand its ability to distribute petroleum fuels from and through Colorado, Nebraska, Wyoming, New Mexico, and Utah.
After negotiations to acquire the easement failed, Sinclair sought to condemn the easement and requested immediate possession. At the immediate-possession hearing, the trial court found that Sinclair had the power to condemn under C.R.S. § 38-5-105, a statute that purported to give condemnation power to “pipeline” companies.
On appeal, the court of appeals, among other things, affirmed the trial court’s ruling regarding Sinclair’s condemnation power. The court of appeals determined that Sinclair qualified as a pipeline company within the meaning of section 38-5-105 and other related eminent-domain statutes. The Colorado Supreme Court accepted certiorari and reversed the court of appeals.
On May 21, 2012, the Colorado Supreme Court, in a 4–3 decision, found that Sinclair lacked the statutory authority to condemn. Specifically, the court held that “C.R.S. § 38-5-105 does not grant condemnation authority, either expressly or by clear implication, to companies for the construction of a petroleum pipeline.” Instead, the court found that Colorado’s general assembly intended to authorize condemnation for the construction of electric-power infrastructure.
The court began its analysis by citing well-established Colorado law that requires courts to construe narrowly statutes that confer condemnation power upon private entities. Turning to C.R.S. § 38-5-105, the court found that the statute did not expressly define a pipeline company as a company conveying petroleum and nothing in that statute clearly implied such a definition. The court also noted that the general assembly had granted limited condemnation authority under other statutes to pipeline companies for the construction and maintenance of pipelines conveying specific substances. The court noted that if it were to read the above statute to grant condemnation authority to any pipeline company for all pipelines conveying any substance, the other limited grants of authority would be superfluous. The Colorado Supreme Court subsequently denied Sinclair’s petition for rehearing.
A Colorado state senator has recently introduced a bill that seeks to reestablish a pipeline company’s ability to condemn under C.R.S. §38-5-105.
In the most recent state legislature's session, a Colorado State Senator introduced a bill that sought to reestablish a pipeline company's ability to condemn under C.R.S. § 38-5-105 but the bill was postponed indefinitely.
No Regulatory-Takings Liability under Alabama Constitution
The Alabama Supreme Court recently held that the Alabama Constitution does not protect property owners from regulatory takings by government agencies. The supreme court reversed a landowner’s successful, multi-million-dollar inverse-condemnation judgment and rendered a judgment in favor of the town because regulatory-takings liability does not exist in Alabama.
M&N Materials, Inc. acquired several hundred acres of property for use as a rock quarry in an unincorporated area of Madison County, Alabama. Neighboring property owners and a nearby municipality, the town of Gurley, were opposed to the rock-quarry operations. Because the quarry was not inside the town’s corporate limits, however, there was nothing the town could do to actually stop the quarry from operating. To give the town control over the quarry, the Alabama legislature passed a local-annexation bill that authorized Gurley to annex the quarry property contingent upon a vote of the residents of the town (not a vote of the residents or owners of the property sought to be annexed). The vote in favor of annexation was 191–23.
— Casey Pipes, Helmsing, Leach, Herlong, Newman & Rouse, P.C., Mobile, AL
Inverse Condemnation—No Physical Intrusion on Property
The Alabama Supreme Court recently held that the Birmingham Housing Authority could not be liable on an inverse-condemnation claim when it never physically intruded on the property even though its actions did cause damage to property. The court distinguished prior Alabama precedent that allowed for successful inverse-condemnation claims in the absence of a physical intrusion when access to the property was impaired. The court reversed prior Alabama precedent on other types of damage claims.
Logan Properties owned an apartment complex. In 2004 the Birmingham Housing Authority received a federal grant to acquire a portion of the apartment complex, tear down the apartment buildings, and construct new housing. Plans for the demolition of the apartment buildings were made public. The parties negotiated back and forth for the sale of the property, but were unsuccessful. Tenants of the apartment complex began to not renew their leases or to terminate their leases based on their understanding that the apartment complex would soon (or eventually) be condemned and demolished. As the current tenants vacated, and as no new tenants arrived, the property declined over the years. In September 2007 the Housing Authority finally filed a condemnation action. Contemporaneously with the filing of the complaint, the Housing Authority also filed a lis pendens in the real-property records. This condemnation action was eventually dismissed on a procedural ground in July 2008. Undaunted, the Housing Authority had a new appraisal performed and made a new offer to purchase in May 2009 and it continued to plan on acquiring the property. The 2009 offer was rejected, but the Housing Authority never filed its second condemnation action. In January 2010, Logan Properties filed an inverse-condemnation action alleging that the Housing Authority’s actions constituted a de facto taking of its property. At this point, the property had been vacant and had become unlivable.
Plaintiff Need Not Seek Legislative Amendment to Ripen Takings Claim
In Leone v. County of Maui, 284 P.3d 956 (Haw. App. June 22, 2012), the Hawaii Intermediate Court of Appeals held that a plaintiff alleging a regulatory taking is not required to seek an amendment to a community plan (CP) to ripen the claim. An amendment to a CP is a legislative act, and plaintiffs are not required by the “ripeness” doctrine of Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), to try to change the law before they allege a taking.
— Robert H. Thomas, Honolulu, HI
The committee desires to provide resources that appeal especially to young lawyers. In this section, watch for news and developments, announcement of articles, and book reviews that have been submitted by and for our young lawyers. Feel free to contribute by contacting the Young Lawyers Subcommittee chair, Jarrod P. Crouse.
Publications for Young Lawyers (of All Ages)
In an attempt to identify resources that may be helpful to young lawyers, we looked at several of the ABA’s available publications and identified the ones that stuck with us. We would also like to know if there are any that our members have found to be particularly helpful. If you run across something that you enjoyed and would be helpful for our group, please let us know. In the meantime, we hope you enjoy the following as much as we did.
The Curmudgeon’s Guide to Practicing Law, (2006). $34.95
A straightforward for the young lawyer on how to not destroy your career while just getting started.
Chapter 2 “How to Fail as a Lawyer”
Chapter 3 “What They Didn’t Tell You in Law School”
The Law of Eminent Domain, a 50 State Survey. (2012) $169.95
An experienced condemnation lawyer in each state and the District of Columbia outlines the law of law of eminent domain in their jurisdiction.
The Young Litigator, (2011). $69.95
Tips on rainmaking, writing, and trial practice.
The Real Estate Litigation Handbook, (2010). $89.95
Practical Pointers on litigating Real Estate Disputes from start to finish.
Trial Notebook, (2006). $64.95
Planning to win is the focus of this work, from picking the right fight to making the right final argument.
— Jarrod P. Crouse, Baylor, Evnen, Curtiss, Grimit & Witt, LLP, Lincoln, NE
Will Government Use Eminent Domain to Condemn Mortgages or Homes?
I posted an article on my law firm's real-estate blog in late August 2012 about the use of eminent domain to condemn underwater mortgages and homes. Since then, there have been several interesting developments. On September 10, 2012, California's lieutenant governor, Gavin Newsom, sent a letter to U.S. Attorney General Eric Holder, stating, among other things, "that investors in private label securitization (PLS) trusts may be colluding to restrain trade and to redline communities in California since they became broadly aware of the proposal to use eminent domain to purchase loans from PLS trusts." Lt. Governor Newsom's letter came after a number of trade organizations in the lending and securities industries announced opposition in late June 2012 to the plan to use eminent domain to acquire underwater mortgages. Following on the heels of Lt. Governor Newson's letter, Representative John Campbell (R-CA), on September 13, 2012, introduced a bill titled "The Defending American Taxpayers from Abusive Government Takings Act." According to Congressman Campbell's website, the proposed act "would prohibit the four major government sponsored mortgage providers from buying loans in any community who do what is proposed in Chicago, Berkeley and San Bernardino, California." The House of Representatives initially referred the bill to its Committee on Financial Services. Then, on October 1, 2012, the House Subcommittee on Capital Markets and Government Sponsored Enterprises began consideration of the bill.
Of all the developments, perhaps most interesting of all, the Homeownership Protection Program Joint Powers Authority—the entity created by San Bernardino County and the cities of Fontana, California, and Ontario, California, to study, develop, and carry out the underwater-mortgage-condemnation plan—cancelled its October 25, 2012, meeting because of an expected lack of quorum (three members of the five member board could not attend). The next meeting of the Joint Powers Authority is scheduled for January 24, 2013, though the Joint Powers Authority may convene a special meeting in November.
Although created to address the underwater mortgage crisis, the Joint Powers Authority is a limited-purpose entity. As presently empowered, the Joint Powers Authority lacks the authority to condemn underwater homes. At least one commentator, however, advocates local government use of eminent domain to condemn underwater homes, believing it to be a better tool for fixing the problems caused by underwater mortgages (which is why my original post addressed both underwater mortgages and underwater homes).
In any event, it would seem that, after all the dust has settled, no further steps toward using eminent domain to condemn underwater mortgages or homes have been taken.
That's good because forcing lenders to accept a "fair market" value for underwater mortgages or homes taken through eminent domain would create a new element of market risk. Lenders likely would spread the risk by increasing the cost of borrowing. Lenders might also further reduce the availability of borrowing funds already greatly restricted by new lending standards. Such measures could negatively impact home-sales volume and prices. In addition, to make up for losses caused by the use of eminent domain to acquire underwater mortgages or homes, lenders might reduce their costs, perhaps by laying off employees, thereby hindering the shaky economic recovery.
Apart from these considerations, it's important to remember that litigation is not usually a speedy process. Using eminent domain to acquire underwater mortgages or homes might not be the quick fix its proponents believe it would be. Also, it's important to remember that the beneficiaries of this plan are people who are meeting their loan obligations. As a result, it's unclear how the inventory of lender-owned properties would suddenly drop simply by reducing the amount owed by people who are not in default of existing loan obligations.
Local governments using eminent domain to acquire underwater mortgages or homes will incur costs that may become significant: filing fees and the costs of hiring appraisers and other expert witnesses, for starters. While the non-governmental financing entity providing the funds for acquiring the underwater mortgages would also provide for all of the costs of suit, there may be indirect costs left to local government to handle. For example, unless local governments are willing to put their other legal work on hold, they may need to hire additional in-house lawyers or even outside eminent-domain attorneys. If that were to happen, local governments would create additional strain on already burdened budgets.
Here is a final thought to consider: Using eminent domain to acquire underwater mortgages or homes could lower property values by creating a disincentive to maintain a home's exterior. For example, a homeowner could decide to let the lawn go and skip periodic necessities such as exterior painting or cleaning, all in an effort to put the home under water, or further under water, to try to get a county or municipality to acquire the mortgage or home. Property values in that neighborhood would suffer as the result of a few bad apples. In the end, using eminent domain to acquire underwater mortgages or homes could actually frustrate the public purposes (economic development, prevention of urban blight, and elimination of housing-market disruptions) proffered in support of the plan.
Keywords: litigation, condemnation, zoning, land use, eminent domain, underwater mortgage, foreclosure crisis, Florida Constitution
— Carlos A. Kelly is a shareholder with Henderson, Franklin, Starnes & Holt, P.A. in Fort Myers, Florida.
A New Environmental Hurdle for TransCanada in the Sandhills
The American burying beetle resides in the Nebraska Sandhills. The inch-and-a-half-long black-and-orange insect is also an endangered species. This results in the latest challenge to the proposed TransCanada XL pipeline. Several environmental groups filed suit last year claiming issuance of a federal permit to remove the beetle from the pipeline was unlawful because it was issued prior to a presidential permit. The suit was dismissed when the presidential permit was denied. The same groups are now complaining about the procedure for issuing a permit to remove the beetles.
TransCanada brushes aside the claims, noting that the beetle issue is only an effort to set back efforts to start construction, which was expected to be in 2013. The environmental groups counter that they care about the beetle. In the meantime, researchers are busy logging the whereabouts of the beetles along the proposed route.
— William G. Blake, Baylor, Evnen, Curtiss, Grimit & Witt, LLP, Lincoln, NE
Publication of the Eminent Domain Compendium
After eight years of effort by the committee and its authors, the compendium will be printed and published by the ABA in June. Watch for The Law of Eminent Domain: Fifty State Survey, 2011/2012. The publisher’s print date is June 4, 2012. At least 50 committee members shared in this arduous effort. It has been a committee project from its inception. We do not know exactly how the website publication will change, but it is expected that the compendium will soon be removed from the website and replaced with state-by-state updates as appropriate.
TransCanada Applies for New XL Pipeline Route Through Nebraska
In April 2012, TransCanada submitted its preferred new route through Nebraska, making a 173-mile arc around the sandhillls. The Nebraska Department of Environmental Quality (NDEQ) held meetings in communities along the proposed new route as part of the evaluation process mandated by new state legislation. The opinions of those who attended the meetings ran the gamut from opposition to any pipeline to almost eager anticipation of receiving payment for the corridor easement. Some opponents claim the new route doesn’t truly bypass the sandhills and that it still goes through the Ogallala Aquifer.
Proponents continue to cite jobs, tax revenues, and the need for oil.
The next step will be NDEQ evaluation of the data and public comments, and then a draft report to the governor. This will be followed by more public comment, a final report to the governor, and the governor’s decision as to whether to approve the new route. NDEQ remains cautious about the timeline for this review process and the likelihood of a favorable report.
The Committee at the 2012 Section Annual Conference
The Condemnation, Zoning and Land Use Committee took an active part in the following events at the Section of Litigation Annual Conference in Washington, D.C. in April.
Committee Meeting. Members discussed the status of the print publication of the committee’s eminent-domain compendium, as well as future efforts at encouraging committee membership and upcoming events.
Practice area Luncheon. U.S. Federal Court of Claims Chief Judge Emily C. Hewitt discussed the court’s procedures and case load, and provided practice pointers in various areas of the court’s jurisdiction, including federal eminent-domain matters.
Committee Expo. During the expo, the various Section committees follow a theme and have fun making it relevant to each committee’s practice area. This year’s theme was TV game shows, and our committee was assigned the show “Cash Cab”. We attempted to crate the semblance of a taxicab, and offered rewards to contestants who could correctly answer a series of trivia questions. With a bit of help from committee members and bystanders, most of the contestants were winners.
CLE Program. The committee co-sponsored “Trying a Complex Case in a Sound Bite World.” The session was presented by a panel of experts, focusing on a demonstration, in the context of a case involving damages to real estate, of the effective use of technology to create visual aids that can highlight testimony and give jurors and judges a streamlined understanding of the key facts.
Taking of Easement Requires Just Compensation
In a case pitting a gas utility against a county government’s efforts to widen a road, the Missouri Supreme Court held that the utility could not be forced to pay to relocate its natural-gas lines without just compensation, reaffirming a long-standing principle that an easement, like other forms of private property, can be taken only upon payment of just compensation.
— David Weder, Lewis, Rice & Fingersh, L.C., St. Louis, MO
Anti-Kelo Legislation Passed by House of Representatives
The U.S. House of Representatives passed the Private Property Rights Protection Act on February 28, 2012. If approved by the Senate, the legislation will withhold for two years all federal development funding to states and locales that take property for economic development, and will bar the federal government from using eminent domain to take property for economic-development purposes.
Reporters were quick to note that the Keystone XL Pipeline, arguably an economic-development project, is exempted.
The legislation, HR 1443, is part of the continuing response to the Supreme Court’s 5–4 ruling in City of New London v. Kelo. California Congresswoman Maxine Waters, one of the sponsors of the bill, stated that part of the idea is that poor people and minorities stand the most to lose from eminent domain for economic development. She said that economic-development projects have “all too often been used by powerful interest groups to acquire land at the expense of the poor and politically weak.” There was little opposition in the House. Similar legislation was passed by the House in 2005, but was not approved by the Senate. We will see how it does in the Senate this time.
California Redevelopment Agencies Dissolved
As part of California Governor Jerry Brown’s attempt to address a massive budget shortfall, legislation was adopted to dissolve the state’s redevelopment agencies. In December 2011, the California Supreme Court upheld the legislation. Redevelopment agencies believe that future redevelopment is going to be difficult without the ability to coordinate such projects through the power of eminent domain for the assemblage of parcels and coordination of infrastructure. Development-agency critics claim there was eminent-domain abuse, tax abuse, and insufficient oversight of spending.
Transcanada Ready to Try Again on the XL Pipeline
Transcanada Keystone has announced it will soon file again with the U.S. Department of State for a permit to build the XL crude oil pipeline. The project was delayed when President Obama announced in January, 2011, that the department would not issue a permit, due to concerns regarding the proposed route through the fragile Nebraska sandhills region. Transcanada has been working with the Nebraska Department of Environmental Quality to find an acceptable route around the most vulnerable areas.
Meanwhile, the Nebraska legislature is considering a bill that would make it a crime for an agent of a condemning authority to threaten a condemnation proceeding knowing that the project has not received the necessary approvals. This is in direct response to letters sent by Transcanada to numerous Nebraska property owners in 2011 stating that condemnation proceedings would be filed if the owners did not sign right-of-way easements within 30 days.
Obama Says No to TransCanada Keystone XL Pipeline—For Now
In early January, TransCanada announced it had mapped and studied a new route through Nebraska for the XL pipeline, avoiding the troublesome parts of the Nebraska Sandhills. TransCanada indicated it was working on a fast track with the Nebraska Department of Environmental Quality for approval of the new routing. However, it will not be so fast after all.
Facing a February 21, 2012, deadline imposed by Congress, Secretary of State Hillary Clinton announced on January 17 that she was recommending denial of the permit to build the pipeline, and President Obama then announced that the permit would be denied. The reasoning was that it would not serve the public interest to approve a permit for a pipeline while environmental and routing issues remain unresolved. The decision leaves the door open to renew the permitting process with the State Department after the rerouting has been completed, and TransCanada is already talking about a timeline for doing so. Chances are good it will not happen before the November election.
The president’s supporters are already applauding his commitment to saving the environment, while opponents are already complaining that the president has stopped a project that would create 20 thousand American jobs and strengthen our oil supply. Property owners along the original route who have signed easements and have been paid for those easements are already calling attorneys for assurance that they get to keep the money.
Miss. Voters Approve Limits on Transfers of Condemned Property
After several failed attempts to pass eminent-domain reform through the Mississippi legislature, proponents of reform successfully passed ballot Initiative 31, amending the Mississippi constitution to limit the state’s ability to transfer property acquired through eminent domain to private parties. Specifically, the measure prohibits the state from transferring to any private party any interest in property acquired through eminent domain for a period of 10 years after acquisition. The measure does carve out express exceptions, however, for virtually all current uses of eminent domain, including condemnation of roads, utility rights of way, airports, blighted properties, etc.
The largest immediate impact of the initiative is that it invalidates the use of eminent domain under Mississippi’s Major Economic Impact Act. This legislation allowed for the use of eminent domain to acquire property for high-economic-impact projects, i.e., projects involving a capital investment of $300 million or projects involving a capital investment of $150 million plus the creation of 1,000 jobs.
Like other reforms passed in other states, this measure grew from dissatisfaction with the U.S. Supreme Court’s ruling in Kelo v. City of New London. Earlier efforts at reform had either failed in the legislature or had been vetoed by the governor. Further, because the Mississippi constitution vested the power to determine public use solely in the courts, any legislative reform would likely have been invalidated.
— Alan Windham, Balch & Bingham LLP, Jackson, MS
The TransCanada XL Pipeline Is Routed Around the Sandhills
In a surprise announcement in the Nebraska legislature’s chamber on November 14, 2011, TransCanada announced that the controversial XL crude-oil pipeline will not be built through the Nebraska Sandhills.
Instead, it will be routed to the east, around the sandhills and away from the Ogallala aquifer. The aquifer supplies drinking and irrigation water to much of the Great Plains region, and the potential environmental damage resulting from an oil spill above the aquifer have sharply divided the region.
Pressure continued to mount on both sides, as union workers and business owners lined up on one side of the street to picket in favor of the pipeline, and environmentalists and ranchers lined up on the other side to protest against the pipeline.
The governor called the legislature into special session to adopt legislation for state regulation of pipeline routing. The president announced that he would make the final decision on whether the pipeline could be built, and the State Department then ordered TransCanada to explore a route that will not go through the Sandhills. Radio and television advertisements about the pipeline were running every few minutes. Finally, the State Department confirmed that the state has sitting authority and that the state could participate in an expedited new environmental-impact study if the route is moved. After all this, the announcement was made on the floor of the legislature by the speaker, that “I have visited with TransCanada and they have agreed to voluntarily move the route out of the Nebraska Sandhills.”
The new route is not yet determined, but may not involve more than a 30 to 40 mile curve around the vulnerable area. The new environmental-impact study is expected to take at least six months, with identification property acquisitions and negotiations extending the delay. In the meantime, TransCanada remains without a permit from the State Department.
In South Carolina, an Attorney's Time Is Property
Mr. Howard was charged with numerous serious felonies, and Mr. Brown was appointed by a South Carolina judge to defend Howard. South Carolina law limits attorney fees for such appointments to $3,500, subject to the judge’s discretion. Brown found himself spending “substantial amounts of time” defending Howard, and asked to withdraw. The judge refused, and Brown asked again. The judge refused again, calling Brown “belligerent.” Brown then refused, but he backed down when the judge threatened him with contempt.
After trial, Brown asked the judge to exercise the court’s discretion and award fees in excess of the statutory $3,500. The judge declined, noting Brown’s lack of cooperation and lack of respect for the court. Brown appealed.
The South Carolina Bar appeared as amicus; arguing that conscripting an attorney’s services for the public good implicates the takings clause. The court agreed, but declined to set any bright-line rules and left it to the trial courts for case-by-case determination of “what constitutes a fair attorney’s fee.”
As for Brown, the court found that the trial judge had not abused his discretion, given the egregious level of inexcusable conduct by Brown.
EDITOR’S NOTE: Where do we start?
1. This is fun reading, and provides two good reminders to every trial attorney: 1) The judge is the judge, and you are not; 2) You probably will not be rewarded for childish behavior.
2. If time is property, where does any constitution say your property can be taken without just compensation as a result of bad behavior?
3. Why is the case styled Brown v. Howard?
4. Why was an amicus allowed to raise issues not raised by a party?
Virginia Allows Compensation for Movable Fixtures and Equipment
In a ruling that will affect compensation arguments in numerous condemnation cases, the Virginia Supreme Court has allowed a jury to decide whether a condemner should compensate the owner for business fixtures and equipment. When a Taco Bell restaurant was condemned for road improvement, the Commonwealth Transportation Commissioner took the standard approach of saying that they could just be moved. Taco Bell argued for compensation for numerous items used in a restaurant, such as ovens, refrigerators, cash registers, and even aluminum pans and frying baskets.
Virginia judges have, in the past, decided what items the jury should take into consideration when awarding compensation. As a result it was common practice for condemning authorities to refuse to pay for anything that could be moved.
Taco Bell argued, successfully, that pulling the items out and trying to sell them results in pennies on the dollar, and that the items were intended to remain on the property for the life of the business. The court found the evidence sufficient to allow a jury to decide whether the items were fixtures or personalty for purposes of condemnation.
The Disconnect Between Eminent Domain and Due Process Doctrines
The author of this law journal note examines the evolution of state laws to guarantee that landowners receive notice and an opportunity for a pre-taking judicial determination of the legality of a taking. The note discusses that courts have failed to rein in the eminent domain power with procedural protections and explores the development of judicial perceptions of eminent domain. It discusses what process is due, and the effect of recognizing due process in eminent domain.
Summary Judgment for Defendants in Florida Blight Case
On May 12, 2011, an Orange County, Florida, trial court granted the defendants’ motion for summary judgment having found that the plaintiffs’ inverse-condemnation claims based on the county’s and local water district’s alleged oppressive pre-condemnation activities were unripe and that the plaintiffs failed to exhaust their administrative remedies.
End of the Line for Opponents of Condemnation to Expand Columbia University?
Following the U.S. Supreme Court’s Kelo ruling, 43 state legislatures have amended their eminent-domain statutes to protect property owners, to some degree, from government use of eminent domain to acquire private property to aid private development. New York is not among them.
In 2000, Columbia University began acquiring properties for expansion of Columbia’s West Harlem campus. In 2001, Columbia, a private institution, began working with the Empire State Development Corporation, a public agency with eminent-domain power, seeking the corporation’s help with the expansion.
One of the landowners in the planned expansion area is a self-storage business called Tuck-It-Away, Inc., owned by Nick Sprayregen. Tuck-It-Away owns four self-storage facilities in the expansion footprint. When the Development Corporation threatened condemnation, Sprayregen challenged the authority to do so, claiming eminent domain must not be allowed to be used for assisting private enterprise to further its profit-making purposes under the guise of removing urban blight.
In a rather surprising decision in December 2009, issued nine days after New York’s highest court refused to second guess the public agency’s determination of blight in the case of Goldstein v. New York State Urban Development Corp., 13 N.Y.3d 511, 921 N.E.2d 164 (2009), a state court issued a ruling that the public agency and Columbia University had improperly acted together to use a finding of blight as a pretext to benefit private development.
In June 2010, the New York Court of Appeals disagreed, relying upon its decision in Goldstein, again declining to second guess the government agency’s blight determination.
Sprayregen filed a petition for writ of certiorari with the U.S. Supreme Court, arguing that Kelo requires safeguards to prevent the process from being dominated by pretext and favoritism without a legitimate public purpose. The petition was heard December 10, 2010, by the high court, and certiorari was denied.
Of course, private-property champions lament that the Court’s refusal to hear the case means that the courts have abandoned their vital role and merely nearly rubber-stamp the decisions of other government agencies, while supporters applaud the decision as a positive step toward rebuilding for the future. As to Sprayregen, it would appear to be the end of the line for his resistance, but the latest word is that Sprayregen and his legal team are exploring their options.
Transcanada Keystone and the XL Pipeline Project
In 2007, TransCanada Keystone Pipeline Company began a public-relations campaign across the Great Plains as a prelude to constructing a crude-oil pipeline from the oil sands of Alberta, Canada, through the central United States, to refineries in Illinois and Oklahoma. TransCanada is a Canadian company, building the pipeline in partnership with Conoco Phillips. Between them, they control almost $200 billion in assets, with $6.5 billion in net income in 2009.
TransCanada sent technical and public-relations teams to town-hall meetings along the route of the pipeline to convince owners of the safety of the pipeline and the integrity of the company, touting the economic benefits to state and local taxing authorities. There was considerable noise from opponents, but the project right-of-way was acquired and the construction completed through Nebraska and the Dakotas in 2010.
The Second Phase, the Keystone XL
During the discussions regarding the original Keystone line, TransCanada revealed plans to build a second line out of Canada, a 36-inch pipeline that would carry crude oil to the Gulf of Mexico. This second line, known as the Keystone XL, would complete a 12.2 billion dollar project, delivering 1.1 million barrels of crude oil per day. The oil would be heated at numerous stations along the route, to approximately 160 degrees Fahrenheit, and pumped at approximately 1,400 pounds of pressure.
The public-relations campaign for the XL Project commenced while work to construct the first line was still underway. However, the going got a little tougher the second time around.
The XL Pipeline will enter the United States several hundred miles west of the entry point of the original line, and will travel southeasterly until it meets with the first Keystone line in Nebraska near the Kansas state line. This route will take it through the Nebraska Sand Hills, a vast and unique, but fragile, area of grasses and wide-open spaces. Once disturbed, the grass cover can take many years to reestablish itself. Wind and water erosion can be severe before reestablishment occurs. Perhaps more important, the Sand Hills sit on top of the Ogallala aquifer, which supplies ground water to much of the Great Plains. The Ogallala aquifer is under virtually all of Nebraska and parts of seven other Great Plains states from South Dakota to Texas.
The farmers and ranchers of Nebraska were not so quick to accept their fate the second time, and TransCanada was not so quick to obtain the needed right-of-way agreements. Landowner groups made demands for more owner-friendly easements. It did not help the process when TransCanada decided to offer fewer dollars to landowners along the XL route than had been paid the first time.
TransCanada became frustrated with the negotiations and threatened to file condemnation before it had obtained approval from the Environmental Protection Agency., which is a necessary step to obtaining a permit from the State Department for construction. That premature threat merely increased the opposition’s resolve, and the battle escalated. TransCanada purchased radio and television spots, declaring the benefits of cooperating with our good neighbor to the north and the ability to offer our children a better education with the extra tax dollars to be paid by TransCanada. The phrase “Good for America, Good for Nebraska” was seen and heard often. These media spots competed, sometimes back-to-back, with ads decrying the spoliation of one of America’s cherished ecosystems and the potential contamination of a vital and far-reaching groundwater system.
U.S. Senators, congressmen, and governors made statements asking Secretary Clinton to deny the permit and move it away from the Sand Hills, while petroleum-company supporters accused them of merely supporting a “not in my backyard” campaign.
At this writing, the battle is not over, but it has quieted down. One of the largest opponent groups made peace with TransCanada, but TransCanada negotiators have let phrases like “if this project gets built” slip into their discussions, while still claiming that TransCanada plans to get started digging a trench through the Sand Hills in 2011.
Eminent-Domain Reform Fails Again in the New Jersey Legislature
Since the U.S. Supreme Court’s Kelo decision, 43 state legislatures have passed reform legislation, limiting to some extent the conditions under which private property can be condemned to promote economic gain. New Jersey is not among those states. SB1451 has been pulled by its sponsor, due to lack of adequate support among New Jersey senators. The bill would have redefined “blight” in line with recent New Jersey court decisions. While New Jersey remains one of the few states in which significant eminent-domain-reform legislation has not been adopted in the wake of Kelo, the New Jersey courts have shown willingness to scrutinize the taking of private property under blight determinations.
Read more: Gallenthin Realty Development, Inc. v. Paulsboro, 924 A.2d 447, 191 N.J. 344 (2007).
Mobile-Home Park Rent-Control Ordinance Upheld in California
The court of appeals reasoned that "whatever unfairness to the mobile home park owner might have been imposed by rent control, it was imposed long ago, on someone earlier in the Guggenheims' chain of title."
Condemnees Liable for City's Cost of Acquiring Their Land via Eminent Domain
The Oregon Court of Appeals held that, in the context of a public-improvement project, a city may impose an assessment requiring condemnees to pay for the cost of acquiring a portion of their land without running afoul of the Fifth Amendment's just-compensation requirements.
Disparate Settlements in Condemnation Equal-Protection Violation?
Experienced condemnation practitioners are well familiar with widely different treatment of seemingly similarly situated properties. One property owner will receive what looks like a lowball offer while another owner receives what seems to be a very generous offer. Yet, little attention is paid to the settlement process. The usual just-compensation and good-faith-negotiations challenges often do not provide a useful remedy for the owner on the lowball end of the equation.
In an informative, well-reasoned article, Benjamin L. Schuster builds on two fairly recent Supreme Court decisions to argue that the “class of one” equal-protection doctrine should be considered as an effective way to protect property owners from arbitrary and irrational treatment in condemnation settlements. The author includes interesting statistics from studies, anecdotal stories of perceived egregious disparities, as well as insight from a different angle on one of the effects of the Supreme Court’s Kelo decision.
See Benjamin L. Schuster, Fighting Disparate Treatment: Using the “Class of One” Equal Protection Doctrine in Eminent Domain Settlement Negotiations, 45 Real Prop., Trust and Est. L.J., 369 (2010); Village of Willow Brook v. Olech, 528 U.S. 562 (2000); Engquist v. Oregon Department of Agriculture, 128 S. Ct. 2146 (2008).
The Pipeline Media Battle-TransCanada XL and the Great Plains
In 2009, TransCanada Keystone Pipeline Company constructed a crude-oil pipeline from the Canadian tar sands to Illinois, crossing through eastern Nebraska. The company now is planning a second crude-oil pipeline from Canada through the Great Plains. If constructed, it will carry up to 500,000 barrels per day of heated crude oil at high pressure. This planned second line, called the “XL”, would cross Nebraska from South Dakota to Kansas, running through the Nebraska sand hills. The sand hills are exactly what the name implies—mostly loose sand with a rich but fragile grass cover. They are a prehistoric geologic formation and sit on top of one of the world’s greatest groundwater supplies, the Ogallala aquifer, which runs under the Great Plains from Nebraska to Texas.
Not all of the owners of property to be crossed by the underground pipeline are excited to receive compensation from TransCanada in exchange for signing an easement. Disputes between the company and owner groups have resulted in battling media advertisements in newspapers and on radio stations. One side refers to the need for America to be free of Middle Eastern oil, touting the safest and best monitored pipeline ever built, the great opportunity to partner with our good friends to the north, and the economic benefits of new jobs and more tax dollars. The flip-side ads talk about a giant foreign company, risks to the Ogallala aquifer and endangerment to the state’s drinking water, the irreplaceable sand hills, and the unfairness of threats of condemnation issued by TransCanada before the company has even received the needed EPA approval. Local newspaper editors are taking sides, and politicians are checking the direction of the winds of public opinion.
This media/political battle is heating up, overshadowing the comparatively dull arguments over just compensation. Neither side shows any sign of backing down soon.
Book about Use of Eminent Domain Results in Everyone Getting Sued
In 2007, Carla Main authored Bulldozed: Kelo, Eminent Domain and the American Lust for Land, a book about a family’s struggle against what was perceived by the author as modern abuse of eminent domain by taking private property for economic development. The book provides details of the involvement of a developer in the acquisition of the family’s property by the City of Freeport, Texas for a new marina. But that is not the most interesting part of the story.
The developer apparently did not care for the book, as he sued everyone connected with it for defamation, including the author, the publisher, a prominent law professor who wrote praise notes for the back cover, and two newspapers. The author and the publisher remain as defendants. The defendants claim the book merely gives a factual account of the real-estate development and its effect on the lives of real people, and claim the suit is merely an attempt to suppress free speech. Their motion to have the suit dismissed was heard September 28, 2010, by a Texas state court.
You will find entertaining and sometimes enlightening reading here.
Sewage Overflow: How Much is Too Much? Can It Be a Physical Taking?
The property owner filed suit for a writ of mandamus to compel the city to commence an eminent-domain proceeding after the 79th sewage overflow in 10 years.
Committee Member Discusses the Unit Rule on Fox News
New Jersey eminent-domain attorney Anthony Della Pelle was asked to discuss the recent Wisconsin VFW eminent-domain case and Wisconsin’s controversial application of the unit rule to deny a tenant of compensation for loss of leasehold rights to contaminated property.
Supreme Court Affirms Stop the Beach Renourishment
On June 17, 2010, the U.S. Supreme Court unanimously affirmed that Florida’s Beach and Shore Preservation Act is not an unconstitutional taking in Stop the Beach Renourishment v. Florida Department of Environmental Protection. This decision was highly anticipated, as it was the first takings case for Chief Justice Roberts and Justices Alito and Sotomayor. The Court split on the nuances of the judicial taking question, with Justice Scalia, Chief Justice Roberts, Justice Thomas, and Justice Alito finding that while this was not a judicial taking, such a taking is possible.The remaining justices declined to determine whether a judicial decision can violate the takings clause. Justices Kennedy and Sotomayor concurred that this case did not require that analysis and, if it did, the due process clause would properly limit judicial power.Justices Breyer and Ginsberg, exercising judicial restraint, said that this difficult constitutional question did not need to be answered to adjudicate this case. Justice Stevens did not participate in the decision because he is retiring.
—Jill Gelineau, Committee Chair, Portland, OR
Who Wins When Eminent Domain Conflicts with State Farmland Preservation Programs?
Can a local utility authority use eminent domain to create a public drinking-water well upon privately owned farmland property, without the permission of state or county agricultural officials that regulate the groundwater resources and protect farmland resources in the area? Follow the link below to watch the recent interview on Fox & Friends of New Jersey farmer, Robert Smith, and his attorney, Condemnation, Zoning & Land Use Committee member Anthony Della Pelle, regarding Mr. Smith’s efforts to stop the local authority from taking the well on his family farm. Mr. Smith contends that creating a well will thwart his efforts to permanently preserve the farm, which has been in his family since the eighteenth century. New Jersey state and Morris County agricultural committees requested that the farm be placed into their farmland preservation program, but have both determined that the efforts of the local authority to create a well may negate the ability of the farm to be permanently preserved because the well area itself and a large buffer that would be required around it will interfere with farming operations on the property. This case, which is scheduled for argument before a New Jersey Superior Court judge in early October, tests the limits of a local government’s eminent-domain powers and presents the issue of how a local government may try to buck the authority of its superior governments. Stay tuned for more.
Does the Takings Clause Provide a Remedy for a Bad-Faith Taking?
“No,” argued the town of Brandord, Connecticut. “Yes,” said the Supreme Court of Connecticut.
The landowner submitted an application to develop property for low-cost housing, a legally permitted use, but the town responded by taking the land. The owner countered with suit for damages, claiming in state court that the taking was in bad faith, violating the takings clause and thereby violating 42 USC § 1983. The town raised the standard plethora of defenses to such claims plus the interesting argument that the public-use portion of the takings clause prohibits only a taking of private property for a use that is not a public use, and the takings clause does not provide a remedy for a taking that is undertaken in bad faith or one that is an abuse of power. The court agreed with the trial court’s finding that the town’s actions were in bad faith and affirmed the award of damages to the owner. It was remanded for determination of attorney fees .
See: New England Estates, LLC v. Town of Branford, 988 A.2d 229 (Conn. 2010).
Fun Quote-Who Says Condemnation Law Can't Be Fun?
Greek mythology makes for a good lesson regarding the difficult choices faced by plaintiffs in federal takings cases, as they sail their ships clear of ripeness problems only to face ruin by limitations.
Scylla and Charybdis were the treacherous sea monsters of Greek mythology, who lurked on the opposing sides of the Straits of Messina between Sicily and Calabria. According to lore, these nightmarish creatures were strategically placed so as to pose an inescapable threat to passing ships – sail too close to the peninsula and Scylla would seize and devour your crew with her six serpentine heads; compensate, by navigating closer to the island of Sicily an face the loss of your entire ship in the maelstroms belched from Charybdis’ gaping mouth. . . . Some might say that , in Federal takings law these fictional leviathans have been replaced by the doctrines of ripeness and limitation. . . . In some situations, litigants may find themselves between a rock and a hard place. Allegra, J. U.S. Court of Claims. Petro-Hunt LLC v. United States 90 Fed.Cl. 51 (2009).
For more fun, read about the trials and tribulations of Odysseus as he avoided total ruin in the whirlpool of Charybdis by choosing to battle Scylla and thereby only losing six men, in Homer’s Odyssey, or Ovid’s Metamorphoses. Odysseus needed a takings clause.
Atlantic Yards Decision: New York High Court Upholds Eminent Domain for Economic Development
On November 24, 2009, the New York Court of Appeals, the state’s highest court, announced its decision to uphold the use of eminent domain to acquire private property for the massive “Atlantic Yards” development project. The court stopped short of embracing the U.S. Supreme Court’s controversial decision in Kelo v. City of New London, which held that a government may be empowered under the U.S. Constitution to acquire property for economic development alone.
The New York court found the takings were for a public use because the area had been declared blighted by the local redevelopment authority. The blight study supporting the project, paid for by the developer and conducted years after the project was announced, included the finding that the neighborhood was underutilized. The court recognized that such studies and findings paid for by developers could serve as a predicate for the invasion of property rights, but took the view that it is the job of the legislature to fix any problems.
A dissenting opinion criticized the majority for “abandoning its duty to critically examine” the findings of the redevelopment authority.
Since Kelo, 43 states have passed eminent-domain reform to restrict condemnation for economic purposes. New York is not one of them.
» Read the Opinion |
The End of Kelo-Pfizer Abandons the New London Project
In the late 1990s, the city of New London, Connecticut, looked to Pfizer to build a new research and development facility, as the key to a massive urban renewal and an economic boost to the city’s aging Fort Trumball area.
That’s where Suzette Kelo’s little pink house stood. Her desire to not sell her home resulted in the controversial decision by the U.S. Supreme Court allowing a state to define public use so as to include such economic rejuvenation projects, and resulted in Suzette’s home, along with many others, being acquired and removed. See Kelo v. City of New London. Ms. Kelo’s home was eventually acquired by the city, and sold to Pfizer as part of a 24-acre parcel, all for $10.
Now, after merging with Wyeth, Pfizer has announced it will close its facility in New London, shutter the building, and take 1,400 jobs elsewhere. The Fort Trumbull area where the pink house stood? There is very little to show for all the effort other than weeds and scattered demolition rubble.
It is reported by the Institute for Justice that 43 states have now reformed their eminent domain law to limit its use for economic gain.
Village Apologizes for Violating Property Owner's Constitutional Rights
The village of Port Chester, New York, has issued a formal apology to a local businessman, after engaging in a nine-year eminent domain battle in which the owner had claimed the village took his property to make way for a private development project. As part of a settlement, the village announced that it “sincerely apologizes . . . and regrets the hardship it has caused.”
Dear Members of the Condemnation Zoning and Land Use and Real Estate Committees - As we begin a new ABA bar year, we have some exciting news to bring to your attention. The Condemnation Zoning and Land Use Committee has merged into the Real Estate Committee. This merger will better target the relevant audience for Condemnation and Land Use issues and expand the subject matter expertise of the Real Estate Committee. The co-chairs of the combined committee have been working hard to fully integrate the committee and we look forward to working with you to complete the process this year.
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