Archive | Regulatory Takings

How a “Free” Program Could Cost Over $500 Million

The National Law Journal has an interesting report on the rising costs of the federal “Rails-to-Trails” program.  What seemed like a neat way to create hiking and biking trails has spawned substantial amounts of litigation by landowners who assert the federal government cannot convert abandoned railroad easements to other uses without paying compensation.  According to the story, the Congressional Budget Office predicted the program would not cost anything.  Yet as NLJ reports, the federal government has shelled out $49 million to compensate aggrieved landowners in the past year alone, and some predict total liabilities will top $500 million. [...]

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Rick Hills on Koontz, Property Rights, and Federalism

NYU law professor Rick Hills isn’t nearly as pleased with the Supreme Court’s important property rights decision in Koontz as I am. He objects to the result primarily on federalism grounds. In Rick’s view, federal courts should not enforce significant Takings Clause constraints on state land use policies because they can’t effectively with the diversity and complexity of local land use decisions:

The idea that the Court will enlist federal courts to duplicate the work of state courts in policing conditions on literally hundreds of thousands of land-use permits, as suggested by Justice Alito, seems laughable, because the feds lack the manpower and electoral legitimacy to pull off such an act of imperialism….

[W]hy do I say that serious enforcement of Nollan-Dolan against a broad range of conditions on land-use development would lead to a quagmire? The Court declared that a demand on a developer to improve some off-site culverts is covered by the Nollan/Dolan line of cases, thereby embarking on what looks to be a futile effort to police the literally hundreds of thousands of conditional permissions for land development from roughly 35,000 general purpose local governments. Justice Alito tried to cheer us up by asserting that “teasing out the difference between taxes and takings is more difficult in theory than in practice” (Slip Op. at 19). But the very form of this encouragement suggests that SCOTUS either does not know what it is getting into or is being disingenuous about the burden that it is assuming: The problem is not merely distinguishing taxes from takings but also distinguishing all other routine conditions on land-use permits (e.g., obligations to build affordable housing, finance public plazas, bank wetlands, hire local folks for construction jobs, improve subway stops, etc.) that are the routine currency of conditional map amendments, conditional use

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Thoughts on the Koontz Takings Clause Case

Here are some early reflections on Koontz v. St. John’s River Water Management District, the important Takings Clause case the Supreme Court decided today. As discussed more fully here, the case involved a situation where Coy Koontz, a Florida property owner, was refused a permit to develop his land by a government agency, unless he agreed to, among other things, perform off-site repair and maintenance work on other properties he did not own, which were miles away from his land.

In Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994), the Supreme Court ruled that, under the Takings Clause, there must be an “essential nexus” and “rough proportionality” between the purpose behind a government-imposed physical invasion of property and the objectives of any permit scheme where development permits are conditioned on allowing the physical invasion. If there is no such connection, then a taking has occurred, and the Takings Clause requires that the property owner get “just compensation.” Otherwise, the government could essentially wipe out property owners’ rights to control their property simply by refusing them the right to develop their land in any way unless they do whatever the state demands.

Koontz addresses two major issues that previous Supreme Court cases had not covered: Whether the requirements of Nollan and Dolan apply when the government denies a permit, as opposed to issuing it with attached conditions, and whether those requirements apply to cases where the burden imposed by the government is an obligation to finance off-site “mitigation” as opposed to requiring the property owner to allow a physical invasion of his land. The Supreme Court majority answered “yes” to both questions. I think they got both of them right.

I. Issued Permits vs. Permit Denials

The distinction between issued and denied permits is [...]

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Property Owner Wins Important Takings Case

In a major Supreme Court victory for property rights, the Supreme Court ruled against the government in Koontz v. St. John’s River Water Management District, an important Takings Clause case that I described here here. Justice Alito wrote the majority opinion for a 5-4 Court split along ideological lines. This was an unexpected outcome because the oral argument went well for the government. Justice Scalia, who seemed supportive of the government’s position at argument, apparently changed his mind. As I speculated in this recent post, the fact that Alito ended up with the opinion was a positive sign for the property owner.

I will have more to say about this case once I have had a chance to study the opinion.

UPDATE: I should note that the case was remanded to the Florida Supreme Court for further proceedings. So technically the property owner did not win a complete victory; we don’t yet know what kind of compensation he will get. However, he did prevail on the big issue before the Supreme Court.

UPDATE #2: I have change “regulatory takings” to “takings” in the title of this post, because the Supreme Court majority ruled that the case was not technically a regulatory takings claim, but a per se taking. [...]

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Landowners Win in Koontz

The Supreme Court decided in Koontz v. St. John’s River Water Management District that mitigation requirements imposed on land-use permits are subject to the nexus and proportionality requirements of Nollan and Dolan. The decision was 5-4, and probably represents the most significant property rights decision in several years. Justice Alito wrote the majority opinion. Justice Kagan dissented.

NOTE: Comments are closed on this post, but you can comment on Ilya’s above. [...]

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Still Waiting for the Koontz Decision

Among the many important decisions not issued by the Supreme Court this week, it’s easy to forget about Koontz v. St. John’s River Water Management District, which I described here. As co-blogger Jonathan Adler wrote in January, “this could be a very important case — easily the most important property rights case heard by the Roberts Court to date.”

Most observers believed that the oral argument went badly for the property owner (see, e.g., here and here), and therefore expected a major win for the government. Such an outcome is still very possible. However, cases that are held until the very end of a term are usually closely divided and controversial. That suggests we might be in for a close 5-4 or 6-3 decision. Tim Mulvaney’s prediction that the case could be a close call, with a “highly fractured” Court, may turn out to be prescient. The property owner could even eke out an unexpected victory, though that is still less likely, in my view, than a close win for the government. In order for the property owners to prevail, Justice Scalia would likely have to step back from the position he seemed to take during the oral argument.

UPDATE: Josh Blackman argues that the distribution of previously issued opinions suggests that Justice Samuel Alito will be writing the Court’s opinion in Koontz. If this is true, it’s good news for the property owner. Alito is one of the two most pro-property rights justices, along with Clarence Thomas. Obviously, we can’t know for sure that Alito will be writing the opinion. Maybe he just ended up with a smaller-than-usual number of opinions from that sitting for idiosyncratic reasons. And even if he is, it could just indicate that the government won a lopsided 8-1 or [...]

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A Modest But Potentially Significant Supreme Court Victory for Property Rights

To the disappointment of court-watchers, the Supreme Court did not announce any high-profile decisions today. But it did issue a unanimous opinion in Horne v. Department of Agriculture, a notable Takings Clause property rights case. The Hornes are California raisin farmers seeking to challenge the constitutionality of a provision of the Agricultural Marketing Agreement Act of 1937 that requires them to turn over a portion of their raisin crop to the federal government in order to create an artificial scarcity in the market and prop up the price of raisins. They claim that this requirement violates the Takings Clause of the Fifth Amendment, which requires the government to pay “just compensation” whenever private property is “taken for public use” (the Hornes and other growers are not compensated for the expropriated raisins). The Supreme Court today did not rule on the issue of whether the Takings Clause was violated here. But it did unanimously overrule the Ninth Circuit’s decision that federal courts lacked jurisdiction to hear the Takings Clause case in the first place, because the Hornes were required to first pay the massive $483,000 fine imposed by the Agriculture Department, and then pursue various administrative remedies before getting their day in court. As Justice Thomas explains in his opinion for the Court, there were no meaningful alternative remedies available to the Hornes, because all such were closed off by federal statutes. In addition, “when a party raises a constitutional defense to an assessed fine, it would make little sense to require the party to pay the fine in one proceeding and then turn around and sue for recovery of that same money in another proceeding.” He might have added that imposing such a requirement would be a heavy burden on property owners who cannot afford to wait for years [...]

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Regulatory Takings and “Lochnerism”: An Observation

It is often argued that regulatory takings doctrine is a form of “Lochnerism” and a revival of “substantive due process” constraints on economic regulation.  So, for instance, in his Dolan v. Tigard dissent, Justice Stevens traces the history of the doctrine to the Lochner period and finds the roots of regulatory takings doctrine in late-19th century substantive due process.

The so called “regulatory takings” doctrine . . . has an obvious kinship with the line of substantive due process cases that Lochner exemplified. Besides having similar ancestry, both doctrines are potentially open ended sources of judicial power to invalidate state economic regulations that Members of this Court view as unwise or unfair.

As a historical matter, Justice Stevens was correct that the first decisions obligating states to compensate  landowners for the taking private property for public use  (Chicago, Burlington & Quincy Railroad v. Chicago) and holding that the regulation of land use could require compensation if it “goes too far” (Pennsylvania Coal v. Mahon) date from the so-called “Lochner era.”  Curiously enough, the authors of these two opinions are, respectively, Justice John Marshall Harlan and Justice Oliver Wendell Holmes.  Why is this curious?  Because Justices Harlan and Holmes wrote the two dissenting opinions in Lochner.  So while contemporary commentators and critics may see regulatory takings doctrine as Lochnerism reborn.  Those who challenged Lochner at the time apparently saw things differently. [...]

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Koontz Oral Argument

SCOTUSBlog’s Lyle Denniston reports that oral argument did not appear to go very well for the landowners in Koontz v. St. Johns River Management Authority.

Something really big, and potentially decisive, happened to a major new property rights case between the time the Supreme Court took it on, and Tuesday’s argument by lawyers before the Court. The very idea that an unconstitutional “taking” had occurred to an owner of a small plot of ground in Florida seemed near to vanishing, propelled toward oblivion by a spreading fear on the bench that maybe the entire regulatory apparatus of government might be at risk. Credit lawyers for a state agency and the federal government for deepening this anxiety. . . .

The owner’s claim that there had been a “taking” had been strenuously assailed by Justice Antonin Scalia, whose vote the landowner almost certainly had to have. That was probably the most menacing development for Koontz. But the worry that seemed to spread across the bench, that a victory for Koontz might well pull the government’s public works projects into constant constitutional court battles, spelled trouble, too.

Denniston is almost certainly correct that if the landowners have lost Justice Scalia, they won’t win the case. Here’s another report from Lawrence Hurley of Greenwire.

For more on the Koontz case, see here. [...]

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Koontz v. St. Johns River Water Management District

Tomorrow the Supreme Court will hear oral argument in a potentially important takings case, Koontz v. St. Johns River Water Management District. In this case, a landowner is challenging the state’s refusal to grant a permit to develop wetlands unless the landowner agreed to various conditions, including the performance of off-site mitigation. When the landowner refused, the agency refused to grant the permit and the landowner sued, claiming that the conditions the government sought to impose violated the rough proportionality requirement of Nollan and Dolan. Although he prevailed in the lower courts, the Florida Supreme Court reversed, concluding that (among other things) that the rough proportionality requirement did not apply to off-site mitigation requirements or to situations where a permit is never issued. Given the issues involved, Koontz could have a major effect on environmental mitigation requirements and land-use regulation at all levels of government.

Ilya previewed Koontz and Greenwire covered the case when the Court granted cert. For more on the case, here are comments by Richard Epstein and — from a quite different perspective — Richard Frank. One thing all would agree on, however, is that this could be a very important case — easily the most important property rights case heard by the Roberts Court to date.

UPDATE: The Pacific Legal Foundation represents the landowner in this case, and there are quiet a few posts on Koontz on the PLF blog. (PLF also represented the Sacketts in Sackett v. EPA from last term.)

On the other side of the case, Doug Kendall of the Constitutional Accountability Center comments here. CAC was formerly know as Community rights Counsel, an organization that reliably opposed regulatory takings claims in federal courts. [...]

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Supreme Court Rules That Temporary Government-Induced Flooding of Private Property Can Qualify as a Taking

Today, the Supreme Court issued a unanimous decision in Arkansas Game and Fish Commission v. United States. The case involved a claim by the Arkansas Game and Fish Commission that the federal government’s repeated deliberate flooding of its property between 1993 and 2000 constituted a taking requiring compensation under the Fifth Amendment, which mandates that the government pay “just compensation” for takings. The flooding caused extensive damage to forest land owned by the Commission.

Today’s opinion by Justice Ruth Bader Ginsburg rules that temporary flooding can qualify as a taking at least sometimes, but tells us very little about how to determine whether a given case of flooding qualifies as a taking or not:

We rule today, simply and only, that government-induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection. When regulation or temporary physical invasion by government interferes with private property, our decisions recognize, time is indeed a factor in determining the existence… of a compensable taking….

Also relevant to the takings inquiry is the degree to which the invasion is intended or is the foreseeable result of authorized government action…. So, too, are the character of the land at issue and the owner’s “reasonable investment-backed expectations” regarding the land’s use…. Severity of the interference figures in the calculus as well.

So far as it goes, I think the Court’s decision is clearly correct. For reasons I discussed here, there is no good reason to hold that temporary flooding can never count as a taking. This is especially true if the flooding was deliberate and inflicted permanent damage on the property owner’s land. Temporary physical invasions qualify as takings in many other contexts (e.g. – overflights by aircraft), and there is nothing special about flooding that should lead the Court to create [...]

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Local Government Forces Homeowners to Cut Down Trees so that Retired Baseball Star John Olerud Would Have a Better View of the Seattle Skyline from his House

Retired baseball All Star John Olerud has persuaded the Clyde Hill, Washington Board of Adjustment to force his neighbors to chop down two valuable trees on their property so that he will have a better view of the Seattle skyline:

Nine years after he won his third Gold Glove as a Seattle Mariners first baseman, John Olerud has won a victory in a different venue.

The Clyde Hill Board of Adjustment ruled Wednesday night that Olerud’s neighbor to the west must remove two trees because they unreasonably obstruct Olerud’s view of Lake Washington and the Seattle skyline.

The board’s 3-2 order is the first time the city has told a resident to cut down a tree under a 1991 “view obstruction and tree removal” ordinance…

An appraiser hired by John and Kelly Olerud said their $4 million home would be worth $255,000 more if the rare Chinese pine and the Colorado spruce across the street were cut down and replaced with smaller plants. The Chinese pine’s value is estimated at more than $18,000.

Removing the trees would widen the west-facing view from his family room by 65 percent, Olerud told the Board of Adjustment, giving his house the same amazing view of Seattle’s skyline that’s visible from nearby Northeast 20th Street….

“We love the trees, they are valuable and we don’t want to remove any of them,” Baker said. He said the Oleruds “have a fabulous property and, no matter how valuable it is, the ordinance doesn’t promise them an unobstructed view. It doesn’t entitle them to more than they paid for [when they bought their house, at which time the Bakers’ trees were already there]….”

Removing the trees wouldn’t unreasonably decrease the Bakers’ enjoyment of their property, the board said. The view ordinance says an owner’s enjoyment of

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Supreme Court Decides to Hear Important Regulatory Takings Case

The Supreme Court has just decided to hear an important regulatory takings case, St. Johns River Waste Management District v. Koontz. Paul Beard of the Pacific Legal Foundation, which is representing the property owner, has a helpful summary of the case:

Coy A. Koontz wants to develop commercial land, most of which lies within a riparian habitat protection zone in Orange County, Florida. He applied for a dredge and fill permit with the St. Johns Water Management District. St. Johns agreed to grant the permit, but only on the condition that he place a conservation easement over his land, and perform mitigation off-site by replacing culverts and plugging certain drainage canals on other properties not owned by Koontz and miles away from the property. When Koontz refused to perform the off-site mitigation, St. Johns denied the permit.

Koontz filed an inverse condemnation suit in circuit court. Koontz argued that the off-site mitigation requirement violated Nollan v. California Coastal Commission and Dolan v. Tigard. The circuit court applied Nollan and Dolan, holding that the requirement bore no connection to the project’s alleged impacts on the riparian habitat protection zone. The court awarded Koontz compensation for a temporary taking.

The court of appeals affirmed, but the Florida Supreme Court reversed. The Supreme Court held that no taking under Nollan and Dolan had occurred, because (1) Nollan and Dolan apply only to forced dedications of interests in real property (not to mitigation work); and (2) Nollan and Dolan apply only when government approves and issues a permit with conditions (not when it denies a permit, and therefore nothing has been demanded of or taken from the landowner).

Nollan and Dolan held that there must be an “essential nexus” and “rough proportionality” between the purpose behind a government-imposed physical invasion of property [...]

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Today’s Oral Argument in Arkansas Game and Fish Commission v. United States

The transcript of today’s oral argument in the important Supreme Court takings case of Arkansas Game and Fish Commission v. United States is now available here. I discussed the issues in the case in this post.

Legal reporter Lawrence Hurley of Greenwire interprets the oral argument as going badly for the federal government:

A majority of Supreme Court justices appeared sympathetic today to the Arkansas Game and Fish Commission’s argument that it is owed compensation by the Army Corps of Engineers for timber damage caused by flooding.

The commission claims it deserves compensation under the takings clause of the Fifth Amendment for a loss of revenue in timber sales in the Black River Wildlife Management Area in the northeast part of the state.

The damage to the timber was caused by the Army Corps’ management of the Clearwater Dam upriver, the state maintains. Between 1993 and 2000, the Army Corps tinkered with the water flow from the dam, which the commission said led to flooding that eventually killed many mature oak trees at the Black River site….

The Supreme Court justices appeared hostile to the federal government’s position — espoused by Deputy Solicitor General Edwin Kneedler — that no landowners downstream of a government-operated dam can seek compensation in part because they should be aware of the inherent risks of owning land on a floodplain. The federal government would not “have got into the flood control business” if it was going to face litigation over its management of projects, Kneedler said….

Some of the justices appeared particularly concerned with Kneedler’s contention that landowners downstream could never make a claim even though a property owner with land next to a dam reservoir could potentially seek compensation if the water regularly floods his property.

“Your position seems to be

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Tomorrow’s Important Takings Case Before the Supreme Court

Although it may be lost in the shuffle of more highly publicized cases, tomorrow the Supreme Court will be hearing oral arguments in Arkansas Game and Fish Commission v. United States, the most important regulatory takings case in a long time. In this case, the US Army Corps of Engineers inflicted extensive damage on a 23,000 acre Wildlife Management Area owned by the Arkansas Game and Fish Commission through a series of recurring floods caused by Corps dam operations. The trial court ruled that this was a “taking” of property requiring “just compensation” under the Fifth Amendment and awarded over $5 million in damages to the Game and Fish Commission. But the Federal Circuit Court of Appeals reversed, concluding it was not a taking because the flooding was only temporary and the Corps did not intend to inflict permanent flooding or damage.

The case raises two important issues: whether permanent destruction caused by “temporary” recurring flooding can qualify as a taking under the Fifth Amendment, and whether a taking can occur even if the government did not intend to cause the resulting destruction (the federal government argues that there was no taking because the Corps of Engineers did not intend to permanently flood or damage the wildlife area). To my mind, the property owner should prevail on both issues. If the government destroys private property to advance some public policy goal, it does not matter whether it does so by permanent flooding or by a temporary flood. What matters is the destruction of the owner’s rights, not the means by which it was done. In both cases, the government took away the owners’ rights, and in both cases the destruction is permanent, even if the means by which it was achieved was not. As the Court explained in [...]

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