Ruling in MR-GO Takings Lawsuit

Yesterday, on May 1, 2015, in Saint Bernard Parish Government v. United States, the U.S. Court of Federal Claims found the U.S. government liable in a major takings case arising from property damage in Louisiana caused by Hurricane Katrina and other hurricanes.  The lawsuits were brought by St Bernard Parish itself and by numerous property owners in the Lower Ninth Ward of New Orleans and in St Bernard Parish.  The takings claims are based on the theory that Army Corps of Engineer’s construction, expansion, operation and failure to maintain the Mississippi River – Gulf Outlet (“MR-GO”) resulted in temporary takings by causing increased flooding of the plaintiffs’ properties during Hurricane Katrina and several lesser hurricanes. Read the rest of this entry »


The Horne Case and the Public Trust in Wildlife

Who could have imagined that the takings case of Horne v Department of Agriculture argued in the Supreme Court this past Wednesday might portend revival of the doctrine of public trust ownership of wildlife?  But it might. Really. Read the rest of this entry »


Catching Up

Ever since the cert. grant in Horne v Department of Agriculture in January, plus teaching responsibilities, plus a bunch of other things, I have been delinquent in keeping this blog up to date.  With the Horne argument before the U.S. Supreme Court yesterday and my last class today, I feel liberated.  I’ll have some observations on the oral argument in Horne tomorrow.   But first, some accounting of what I have been up to:

I filed this amicus brief on behalf of the International Municipal Lawyers Association in the Supreme Court in Horne.

Thirteen briefs were filed in support of the Petitioners,  and the second brief in support of the Respondent was filed by Sun-Maid Growers of California.  So, at a minmum, the IMLA brief offers the Court a unique perspective.

Here is a new article on Koontz, “The Costs of Koontz,” which will be published in the Vermont Law Review, 39 Vt. L. Rev. 573 (2015).   The purpose of the article is to lay out as plainly as I can the costs of Koontz in terms of (1) increased incoherence of takings doctrine, (2) impairment of separation of powers, (3) undermining of federalism values, and (4) lost effectiveness and efficiency of land protection and management.

It is a follow up to “Koontz: The Very Worst Takings Decision Ever?” published in the NYU Environmental Law Review.

Finally, this piece was just published by the Harvard Law Review Forum as a Response to an Essay by Professor Tom Merrill  published in the Harvard Law Review, “Eschewing Anticipatory Remedies for Takings: A Response to Professor Merrill,” responding to “Anticipatory Remedies for Takings,” 128 Harv. L. Rev. 1630 (2015).

Comments welcome.

John Echeverria

 


Cert Grant in Horne v. Department of Agriculture

Today the U.S. Supreme Court granted a petition for certiorari in the takings case of Horne v. Department of Agriculture.    As followers of this blog may recall, the U.S. Supreme Court has already been around once in this case.

The issues as presented in the cert petition are as follows:   “(1) Whether the government’s “categorical duty” under the Fifth Amendment to pay just compensation when it “physically takes possession of an interest in property,” Arkansas Game & Fish Comm’n v. United States, applies only to real property and not to personal property; (2) whether the government may avoid the categorical duty to pay just compensation for a physical taking of property by reserving to the property owner a contingent interest in a portion of the value of the property, set at the government’s discretion; and (3) whether a governmental mandate to relinquish specific, identifiable property as a “condition” on permission to engage in commerce effects a per se taking.”

Stay tuned.  More to follow.

 


Penn Central Lives On

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 »


Alleged Takings of Private Contracts

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 »


WI Court of Appeals on the Parcel Rule and Just v. Marinette County

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 »


Fires and Takings in Alaska

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 »


Koontz and San Francisco Rent Control

The mischief threatened by the Supreme Court’s strikingly incoherent decision in Koontz v. St John’s Water Management District continues to reverberate in the lower courts.  The latest for instance is the October 21, 2014, decision by the federal District Court for the Northern District of California in Levin v. City & County of San Francisco. The Court (Breyer, Charles, J.) ruled that a recently enacted San Francisco ordinance requiring landlords who withdraw from the rent-controlled rental market to make a lump sum payment to displaced tenants constitutes a taking under the Nollan/Dolan/Koontz trifecta. Read the rest of this entry »


Trolling for Windfalls

On September 30, 2014, the federal District Court for the District of Columbia let the first shoe drop in the controversial takings litigation based on the federal government’s bailout of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). In Perry Capital, LLC v. Lee, the District Court (Judge Royce Lamberth) rejected stockholder claims that the decision by the Federal Housing Finance Agency (“FHFA”) to virtually wipe out the stockholders’ equity in these companies resulted in a compensable taking.  An appeal will surely follow.

In 2008, during the so-called Great Recession, after Fannie Mae and Freddie Mac had suffered serious financial losses as a result of widespread mortgage defaults, the FHFA placed the companies into a conservatorship.  The terms of the conservatorship evolved over time. In 2012, the companies and the FHFA entered into an agreement that required the companies, in consideration for the infusion of taxpayer dollars, to pay a quarterly dividend to the Treasury Department equal to the entire worth of the companies, minus only a small reserve that shrinks to zero over time.  Various shareholders, including some hedge funds that purchased shares in the companies at a deep discount, brought suit seeking just compensation for the taking of their stakes in the companies.  (The lawsuit might have proceeded in the District Court, rather than the U.S. Court of Federal Claims, because the plaintiffs framed their case as a class action suit under the Little Tucker Act.)

Judge Lamberth rejected the takings claim on the ground that the plaintiffs lacked a protected property based on their stock in the companies given that the shareholders were at all times exposed to the risk, based on pre-existing federal regulations, that they might lose their investments if and when the companies were placed in a conservatorship.  Relying on several Federal Circuit precedents involving similar cases, the District Court ruled that the “shareholders necessarily lack the right to exclude the government from their investment when FHFA places the [companies] under governmental control—e.g., into conservatorship.”  In addition, and in the alternative, the Court ruled, emphasizing the plaintiffs’ lack of reasonable investment-backed expectations, that the plaintiffs’ takings claims failed under the Penn Central analysis.

For a withering critique of this litigation – and the similar AIG lawsuit – see Stephen Ratner’s column in the NY Times.