Property Reserve case — Precondemnation Activities

On Wednesday the California Supreme Court agreed to hear an interesting case addressing the types of surveys and investigations of private property the government can undertake without triggering takings liability before deciding whether the property is suitable for a planned public infrastructure project and should be taken by eminent domain for that purpose.

The case arises from California’s proposal to construct a tunnel or canal to divert fresh water from northern California around the Sacramento–San Joaquin River Delta to central and southern California.  The project has enormous significance for meeting the water supply needs of many millions of Californians, and also raises a host of environmental concerns.  The tunnel or canal would cross tens of thousands of acres of land held by several hundred different owners.  To determine whether the project can be built as planned, the State proposes to do a series of geological explorations and environmental surveys of the proposed right on way.  The question is whether these precondemnation activities themselves amount to takings. Read on …

Property Rights in Water Are Different

Further confirmation that property rights in water really are different — and more limited — than property rights in other resources is provided by the June 16 decision of the California Court of Appeals in the case of Light v. State Water Resources Control Board.   The court rejected a challenge by property owners in the Russian River basin to a state water board regulation that will restrict surface water diversions to protect endangered salmon. The regulation was adopted in response to disastrous strandings of salmon that occurred in April 2008 when large volumes of water were drained from the river and sprayed on vineyards and orchards to prevent frost damage.   The board’s new regulation is designed to protect the salmon by controlling similar future diversions of water. Read on …

Oregon Supreme Court on Physical Takings Claims

In the case of Dunn v. City of Milwaukie, the Oregon Supreme Court recently issued a valuable decision addressing the standards for when government can be held liable for a taking due to physical invasion of private property (at least under the Oregon Takings Clause, though the decision relies in part on federal precedent).

The case arose (hold your nose) when the city’s use of high-pressure “hydrocleaning” to wash the public sewer system caused sewage to back up and spill into the plaintiff’s house through toilets and other bathroom fixtures.   A jury found for the plaintiff and awarded compensation, and the award was affirmed by the Oregon Court of Appeals.  The Oregon Supreme Court has now reversed. Read on …

The Ninth Circuit Rules in Horne: The Plot Thickens

The Supreme Court’s takings decisions last term in Horne and Koontz have each generated considerable debate and consternation.  Now, the Ninth Circuit has issued a new ruling in Horne on remand that relies heavily on the analysis in Koontz to resolve the Hornes’ claim. The Ninth Circuit handed the government a win, ruling that the Hornes failed to demonstrate a taking due to the Secretary of Agriculture’s assessment of penalties against them for declining to “reserve” a portion of their raisin crop in accordance with the Agricultural Marketing Agreement Act of 1937.  Unfortunately, the Ninth Circuit’s legal analysis is an impenetrable tangle, largely because the Supreme Court itself has been so confusing, and the long-term implications of the Ninth Circuit’s decision are both unpredictable and troubling. Read on …

Koontz: Could it Get Any Worse?

Just when you thought the Koontz litigation couldn’t get any worse (see my article, Koontz: the Very Worst Takings Decision Ever?),the Florida Court of Appeals has issued a decision in the Koontz case on remand.  The Court split 2 to 1.

To recap, the case arose from the St John’s Water Management District’s denial of a permit to fill wetlands after the plaintiff and the District failed to come to terms on a combination of easement restrictions and off-site mitigation measures that would have allowed the District to issue the requested permit.  The Florida Supreme Court, reversing a decision by the Florida Court of Appeals, ruled that the Nollan/Dolan “exactions” standards do not apply to a permit denial when the government has imposed no “exactions.”  The U.S. Supreme Court reversed, holding that Nollan/Dolan do apply to a permit denial following a landowner’s refusal to accede to a demand for an exaction.

In this latest ruling in the case, on remand from the U.S. Supreme Court, the Court of Appeals reasoned that, since the court’s 2009 decision was “entirely consistent” with the Supreme Court’s 2013 decision, and since the Supreme Court’s  opinion “does not set forth a new legal construct” for analyzing the issues in the case, it should “reaffirm” its prior decision upholding the finding of a taking and a compensation award without the benefit of further briefing.  Given that the Court of Appeals previously awarded “just compensation” for a “taking” of private property, and the Supreme Court subsequently declared that the claim in Koontz was NOT based on a “taking,” the majority’s logic is more than a little suspect. Read on …

David Lucas’s Two Coastal Lots


David Lucas’ Lots 1994


David Lucas’ Lots 2014 (Courtesy of Meg Caldwell and Eric Hartge)

Second Circuit Decision on Williamson County

The Second Circuit has added new support to the Williamson County waiver theory in the case of  Sherman v. City of Chester.  In a nutshell, the court ruled that when a local government removes a federal takings claim from state court to federal court, it waives the opportunity to raise the state-exhaustion prong of Williamson County as an objection to the federal court proceeding.    This Second Circuit ruling follows a ruling by the Fourth Circuit in Sansonatta v. Town of Nags Head, issued in 2013, adopting the same conclusion.   The ruling in Sherman apparently means that a local government faced with multiple federal claims filed in state court will need to make an initial choice between litigating all the claims in federal court or litigating all of the claims in state court.

Importantly, the  decision does not cast doubt on the general rule that when a litigant initially files a takings claim in federal court, the government defendant can raise Williamson County and insist that the takings claim be litigated in state court.

The Second Circuit also ruled that the plaintiff met the finality prong of Williamson County by demonstrating that it would be “futile” to proceed with further applications because the town used “unfair and repetitive” procedures to raise a host of changing regulatory obstacles over about a decade to bar the plaintiff’s development project.

In a final interesting twist, the court concluded that the plaintiff stated a viable takings claim, at least sufficient to survive a Rule 12 motion to dismiss, on the theory that the shifting regulatory requirements that made it futile for plaintiff to seek to ripen his claim themselves constituted a taking.  We’ll be curious to see how this case unfolds on remand.