As furious negotiations continue to try to complete a Trans-Pacific Partnership (TPP) trade agreement, for which Congress granted the Obama administration fast track authority a few months ago, a dispute has arisen over whether tobacco companies should be allowed to invoke the takings and other “investor protections” in the TPP to beat back efforts by developing countries to adopt regulations to protect their populations from the ravages of tobacco. The Coalition for Tobacco Free Kids has a done a nice job of documenting how tobacco companies have used international investor-state claims under international trade agreements to attack tobacco regulation. The Obama administration, under pressure from numerous public health groups, has proposed a provision in the TPP to protect member countries from “abusive” tobacco company investor-state claims
A major argument against this approach by the tobacco companies and their allies in Congress has been: “First they come for the tobacco companies . . . “ In other words, maybe tobacco will be denied the opportunity to exploit the investor-state process today, but who knows what other kinds of “abusive’ takings claims will be targeted next? Which is not a bad point. If tobacco companies should be denied the opportunity to exploit trade agreements to challenge tobacco regulations, why shouldn’t this good thinking be applied to protect all manner of lawful domestic environmental and social welfare legislation from abusive investor-state litigation?
Meanwhile, the Bloomberg and Bill and Melinda Gates foundations have set up a mufti-million dollar fund to provide advice to countries targeted by tobacco companies with investor-state litigation. Which is all well and good, but one would hope the foundations would also pay some attention to the root causes of this international litigation explosion in the out-of-control property rights ideology currently being promoted not only on the international scene but in our own domestic court system, including the U.S. Supreme Court.
During oral argument in the Koontz case Chief Justice John Roberts asked rhetorically of counsel for the government: “Do you know of any case where the government has lost a Penn Central case?” In response, counsel cited several Supreme Court cases in which Penn Central claims prevailed. He also might have cited an assortment of successful Penn Central claims in the lower courts. It is certainly true that most Penn Central claims fail, which is only natural given, for example, the bedrock understanding that the Takings Clause is reserved for “extreme circumstances” (Riverside Bayview Homes v. United States) and Justice Antonin Scalia’s affirmation that a “property owner necessarily expects the uses of his property to be restricted, from time to time, by various measures newly enacted by the State in legitimate exercise of its police powers.” (Lucas v. South Carolina Coastal Council). But a claim under Penn Central certainly can be successful.
A sort of oddball case on point is the recent decision of the New York Appellate Division in In the Matter of New Creek Bluebelt, Phase 4. The case was actually a straight condemnation case involving a half-acre parcel on Staten Island. Normally the compensation award in a condemnation case takes into account the regulatory restrictions in place that limit the market value of the property. But the claimants contended that wetlands regulations limiting the development of their property were so onerous that they constituted a taking, and that the condemnation award therefore should be increased to reflect the probability that the regulations were a taking. Read the rest of this entry »
In Pennington v. Gwinnett County, the Georgia Court of Appeals has obliquely revisited the endlessly interesting question of whether the government can “take” private contract rights. This case was a laydown for the government, but it still provides a useful opportunity to highlight how difficult it is to prevail against the government in this type of takings case. Read the rest of this entry »
In Murr v. State of Wisconsin, the Wisconsin Court of Appeals has offered an instructive decision on how the parcel-as-a-whole rule applies to two contiguous, legally subdivided lots. Applying the traditional parcel-as-whole-rule in this context, the Wisconsin Court of Appeals affirmed a circuit court decision rejecting the owners’ claim that they suffered a taking as a result of a restriction on their ability to develop the (combined) lots. The decision also represents an interesting application of the Wisconsin Supreme Court’s landmark decision in Just v. Marinette County, 201 N.W.2d 761 (1972). Read the rest of this entry »
The Alaska Supreme Court issued a troubling decision on November 28, 2014, in Brewer v State, reversing a trial court ruling absolving the State of liability under the Alaska Takings Clause for property damage caused by State firefighters in a successful effort to protect the plaintiffs’ properties from being consumed by wildfire. In the summer of 2009, a major fire engulfed hundreds of thousands of acres of forestland south of Fairbanks. In order to protect the plaintiffs’ structures from the approaching fire, firefighters lit a “backfire” on plaintiffs’ land in order to burn away combustible vegetation and deprive the oncoming fire of fuel. The tactic worked, because the fire passed through the plaintiffs’ subdivision without destroying the plaintiffs’ buildings. Read the rest of this entry »
On Friday, September 19, 2014, the 17th Annual Conference on Litigating Takings Challenges to Land Use and Environmental Regulations will be held at UC Davis School of Law in Davis, California. The event is sponsored by Vermont Law School, UC Davis School of Law, Georgetown University Law Center and many others. The speakers include numerous experts from academia as well attorneys from the U.S. Department of Justice, the U.S. Army Corps of Engineers, the Congressional Research Service, the California Attorney General’s Office, the New York State Governor’s Office of Storm Recovery, the California Coastal Commission, the American Securitization Forum, as well as private and public interest practice.
The conference will feature a keynote “Appreciation of Joe Sax,” presented by Holly Doremus, who has the honor of sitting in Joe’s former seat, the James H. House and Hiram H. Hurd Professor of Environmental Regulation at UC Berkeley. Conference panels will address the long-term doctrinal and practical implications of Koontz, the latest permutations on the parcel as a whole issue, the controversial idea of “taking” underwater mortgages, Brandt and the rails to trails program, takings and water management, and the takings implications of adapting to sea level rise caused by climate change. Details are available here
Space is still available at the conference (go here to register). In addition, copies of the conference papers and audio recordings will be available after the conference. Articles based on conference papers will be published in an upcoming edition of the Vermont Law Review
One might assume that “takings” would be a remote issue when it comes to the federal bailout of the automobile and financial services industries during the economic crisis of a few years ago. After all, if the government spent billions of taxpayer dollars to protect particular companies, and the economy as a whole, from going over a cliff, how could the government be accused of taking anything? But if one made this assumption, one would turn out to be wrong. Two ongoing cases illustrate the point. Read on …
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.