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DECEMBER 2004
Update on Kelo
v. City of New London (U.S. No. 04-108)
On December 3, the Petitioners in Kelo filed their
opening brief on the merits, arguing that New London's condemnation
of land for an economic redevelopment project is not a "public
use" and thus violates the Just Compensation Clause of
the Fifth Amendment. The Petitioners ask the Supreme Court
to rule that economic development alone is never a public
use, or alternatively that governments condemning land for
economic development must show to a "reasonable certainty"
that the land will be used for development and the project
will succeed.
The Petitioners are supported by more than twenty amicus
briefs, a testament to the sympathetic facts of their case.
CRC is weighing in on the side of New London, though, because
of the importance of eminent domain for communities' ability
to create jobs for their citizens and much-needed revenue
for police departments, school districts, and other local
services. CRC is preparing an amicus brief for a broad coalition
of state and local officials.
New London's opening brief on the merits is due January 21,
2005. Oral argument is scheduled for February 22, the same
day as the argument in another takings case, Lingle v.
Chevron.
NOVEMBER 2004
Oregon's Measure 37
Oregon has long been recognized for its progressive land
use regulations, which restrain urban sprawl, protect the
environment, and preserve farmland. But things changed on
November 2nd.
On Election Day, Oregon voters passed Measure 37, a ballot
measure requiring state and local governments to compensate
property owners when their land loses value due to regulations
enacted after their purchase of the property.
Fortunately, Measure 37 is narrower than its predecessor,
Measure 7, an amendment to the state constitution that the
Oregon Supreme Court ultimately invalidated on procedural
grounds. Measure 37 contains key exceptions to its compensation
mandate, including a nuisance exception and a provision that
limits compensation to those who purchased their land before
enactment of the challenged regulation. For successful claims,
government will have the choice of either paying compensation
or waiving application of the challenged regulation to the
claimant. And unlike Measure 7, Measure 37 is statutory, not
constitutional.
It remains to be seen exactly how Measure 37 plays out in
court. It has been estimated, however, that the costs to local
governments could be substantial.
Property owners can start filing claims December 2nd, and
all claims must be answered within 180 days. Property owners
have until late 2006 to file claims based on existing regulations,
but if a new land use regulation is enacted, the affected
property owners have two years from the enactment date to
file a claim.
It will be interesting, if not nerve-wracking, to see what
Measure 37 brings in the months ahead. Because the Measure
requires compensation only for those who owned affected land
before the challenged regulation was enacted, it remains unclear
just how much land is covered. At a minimum, state and local
officials might well be gun-shy about enacting new community
protections for fear of triggering compensation claims.
OCTOBER 2004
Nevada High Court Ruling Will Assist Future Airport Expansions
Because many major airports were designed decades ago and
did not adequately anticipate future growth, they must expand
to keep up with increased demand. A recent Nevada ruling will
assist local officials who face regulatory takings challenges
to these expansion efforts.
In County of Clark v. Tien Fu Hsu, No. 38853 (Nev.
Sept. 30, 2004), the Nevada Supreme Court overturned a $22
million takings judgment in a challenge to height restrictions
around McCarran International Airport, rejecting the claimants'
per se, physical invasion theory of liability and ruling that
their regulatory takings claim under Penn Central is
unripe.
The height restrictions at issue covered the "transition
zone," a federally mandated buffer zone along the approach
path that provides an extra margin of safety. These restrictions
did not authorize any physical invasion of the transition
zone, but rather prohibited structures above a certain height
in case a plane accidentally left the approach path. A group
of landowners challenged the restrictions, alleging that the
rules worked a physical taking. The trial court agreed.
On appeal, the Nevada Supreme Court held that "a rule
supporting the notion that airport height-restriction ordinances,
of necessity, effect per se physical takings, is overbroad
in its reach" and embraced what it called "the modern
trend" that such ordinances "as a valid exercise
of police power, are not the definitional equivalent of a
per se physical taking." The court noted that the property
could still be further developed and that the landowners had
not availed themselves of variance procedures that might yet
permit taller structures.
Takings challenges involving airports are being brought across
the country, and this case will be helpful precedent for municipalities.
Community Rights Counsel filed an amicus brief in the case
on behalf of the American Planning Association and the Tahoe
Regional Planning Agency.
SEPTEMBER 2004
Smoke Did Not Cause a Taking, Idaho Court Rules
Moon v. North Idaho Farmers Assoc., 2004 WL 1717533
(Idaho, Aug. 02, 2004)
The Idaho Supreme Court rejected a takings challenge last
month to a state law that limited the liability of grass seed
growers who burn crop residue to recharge the soil in the
late summer. Anti-burning advocates alleged that smoke from
the seasonal burns impaired the use of their property and
claimed that a new state law designed specifically to shield
grass growers from damages claims worked a taking of their
property rights.
In June 2003, a trial court ruled that the measure violated
the state constitution and worked a taking of private property
rights because for two months "the burning invades and
destroys two of the three fundamental aspects of the plaintiff's
property rights … possession and use." The Idaho
Supreme Court disagreed, ruling 4-1 that the smoke at issue
is not a taking because it does not impact access or complete
use of the property. The court distinguished this case from
Bormann v. Board of Supervisors, 584 N.W.2d 309 (Iowa
1998), which held that the right to maintain a nuisance action
is an easement under Iowa law, finding no similar authority
in Idaho law.
While we have sympathy for those who are harmed by the seasonal
burns, regulatory takings doctrine is a blunt and dangerous
implement to use to seek redress. Given that the state constitution
permits the legislature to modify common law remedies, this
takings challenge faced an uphill battle from the start. Anti-burning
advocates are considering whether to file a petition for certiorari
with the U.S. Supreme Court and may bring a new action asking
a federal district judge to enjoin the burning as a health
hazard, according to press reports. But if Moon is
any indication, we can expect other states to enact similar
legislation in the future, as well as accompanying takings
challenges by property owners to defeat such measures.
AUGUST 2004
Michigan Supreme Court Overturns Poletown:
County of Wayne v. Hathcock, 2004 WL 1724875 (Michigan,
Jul. 30, 2004)
There are few more famous cases in property law than the
Michigan Supreme Court 1981 ruling in Poletown Neighborhood
Council v. Detroit. As a generation of law students knows,
the ruling permitted Detroit to condemn large portions of
the Poletown neighborhood and give this land to General Motors
for use as an assembly plant. Well, property case law books
now have to be updated, because last month the Michigan Court
overruled Poletown.
In County of Wayne v. Hathcock, Wayne County sought
to assemble 1,500 acres of land near the Detroit airport for
a high-tech office park. A handful of landowners rebuffed
the County's efforts to buy their land, so the County started
condemnation proceedings. The trial and intermediate appellate
courts in Hathcock upheld the condemnations as promoting
a valid public use as defined by Poletown. The Supreme
Court, however, called Poletown "a radical departure
from fundamental constitutional principals" and declared,
"we must overrule [it] in order to vindicate our constitution,
protect the people's property rights, and preserve the legitimacy
of the judicial branch as the expositor - not creator - of
fundamental law."
Notwithstanding its blistering rhetoric, the Court left open
three avenues for the use of eminent domain. A government
can condemn property needed for a road, a railway, pipeline,
or other "vital instrumentalities of commerce,"
or when the property will be owned by a private entity but
still publicly regulated or publicly accessible, or when the
property is dangerous or harmful to the public. This leaves
room for a fair number of urban revitalization projects in
struggling neighborhoods, and most likely for things like
waterfront redevelopment schemes, in which public access to
a place-specific amenity is central.
Poletown was celebrated by government officials for
its ringing endorsement of the power of local governments
to help bring jobs and hope to downtrodden communities. For
many others, however, Poletown has stood for an excess
of government power. Indeed, the decision has further fueled
a campaign by anti-eminent domain activists who are trying,
state by state, to shrink public use, and therefore eminent
domain, to its narrowest possible scope.
Condemnation authority, like any government power, can be
abused, but government officials must stand up to the sweeping
anti-eminent domain challenges being brought across the country.
Otherwise, Hathcock could signal an unwarranted, broad-based
crippling of constitutionally granted government power.
JULY 2004
New York's High Court to Consider if Dolan Applies to
Conservation Easements
In the Matter of Smith v. Town of Mendon
The New York Court of Appeals has agreed to hear a challenge
that could have significant implications for municipal planning
in the state. At issue in Smith v. Town of Mendon is
the Town's requirement as a condition of approval of a site
plan to construct a single-family home that the Smiths accept
a conservation restriction on those portions of their site
that lie within legislatively-imposed Environmental Protection
Overlay Districts. The Smiths challenged the restrictions
as an unconstitutional permit condition under Dolan v.
City of Tigard.
The trial court rejected the Smiths' position, and on appeal
the court ruled that Dolan's "rough proportionality"
test is inapplicable to a condition of this type, which does
not impact the Smiths' right to exclude others from their
property. Aided by the Pacific Legal Foundation, which has
vowed to take the case to the Supreme Court if necessary,
the Smiths convinced New York's highest court to consider
the question. CRC is considering amicus participation.
JUNE 2004
Court Nixes Patients' State Law Remedy But Two Justices
Urge Future Fix
On June 21, the Supreme Court ruled in Aetna Health Inc.
v. Davila that a federal benefits law completely preempts,
and thus compels removal of, lawsuits brought in state court
under state law by patients against HMOs for injuries due
to unreasonable decisions not to provide insurance coverage
for treatment recommended by the doctor. Community Rights
Counsel filed an amicus brief in support of the patients (see
our January
2004 issue), arguing that the state law claims were independent
from the federal Employee Retirement Income Security Act (ERISA)
and thus should not be removed from state to federal court.
The Court disagreed, unanimously. It's the kind of ruling
that makes you thankful there are only nine Justices on the
Court.
The HMO industry is hailing the ruling as a victory for consumers
because they say it will lower premiums, but it's bad news
for patients who suffer harm when their health plans unfairly
refuse to pay for needed medical services. If the patients
sue in federal court, ERISA limits their recovery to reimbursement
for the benefits they were denied; they may not recover compensation
for any resulting physical harm. Ten states had passed statutes
similar to the Texas law, and the ruling invalidates them
all.
But the battle might not be over. Justices Ginsburg and Breyer
wrote separately to "join the rising judicial chorus"
urging the Congress or the Court to "revisit what is
an unjust and increasingly tangled ERISA regime." They
lamented the "regulatory vacuum" created by sweeping
ERISA preemption coupled with cramped readings of ERISA's
remedial provisions, and recommended "fresh consideration"
by Congress or the Court of prior determinations that preclude
make-whole relief. The issue remains very much on the horizon.
It's disappointing, from a federalism perspective, that the
Court so readily allowed these cases to be snatched out of
state court, thereby negating the state court's prior investment
of resources and precluding that court from voicing an opinion
on the case. But because ERISA preemption seems to be a world
unto itself, we're hopeful that the ruling does not have much
spillover effect on preemption doctrine generally.
MAY 2004
Unprecedented Test Applied in Eighth Circuit Commerce
Clause Case
Klingler v. Missouri, 2004 WL 936687 (8th Cir. May
3, 2004)
As we noted in our January 2004 inaugural issue of Community
Rights Report, we are now participating in challenges
to federal protections that provide minimum safeguards for
all communities. The Commerce Clause is the lynchpin of federal
safety, environmental, and anti-discrimination legislation.
In a troubling ruling involving the Americans with Disabilities
Act, the Eighth Circuit recently called into question the
scope of Congress's power under the clause.
At issue is a Missouri regulation requiring the disabled
to pay $2 to obtain a placard denoting their right to park
in spaces reserved for their use. Disability advocates challenged
the regulation as a violation of Title II of the ADA and its
implementing regulations, which prohibit imposition of fees
based on disability status.
Over a strong dissent, the Eighth Circuit held that Congress
lacked Commerce Clause authority to prohibit the state from
imposing the fee because it is unclear that the fee would
dissuade a substantial number of people from engaging in commerce.
Given that the aggregated fees exceeded $400,000 annually,
this kind of individualized economic effects test seems unprecedented.
One wonders how the court would distinguish a case involving
a nominal toll imposed to recoup the cost of a wheelchair
ramp, or a restaurant that charges white males 10 cents less
than other patrons for a meal. The plaintiffs have requested
a rehearing. Stay tuned.
APRIL 2004
Lake Tahoe Scenic Review Ordinance Not a Taking
The Committee for Reasonable Regulation of Lake Tahoe v.
Tahoe Regional Planning Agency,
2004 WL 718954 (D. Nev. Mar. 29, 2004)
Whole books could be written on the takings precedent emerging
from Lake Tahoe. Scene of some of the most significant takings
battles of the past decade, the beautiful Tahoe region is
spawning still more litigation. This time, a U.S. District
Court in Nevada rejected a facial takings challenge to a regional
scenic review ordinance designed to regulate the appearance
of residential housing along the lake's majestic shoreline.
Although the ordinance has not yet been implemented and no
permits have been denied under the plan, the complaint alleged
lost property values of $100 million, a figure derived by
estimating a 50 percent reduction in value for reduced views.
Taking this figure at face value, the court noted that the
Tahoe Regional Planning Agency has been exercising "tremendous
power" conferred by Nevada, California, and the federal
government since 1980. In such a highly regulated environment,
the court found no interference with reasonable investment-backed
expectations.
The court also considered whether the regulation was "substantially
related to a legitimate government interest." Applying
an intermediate level of scrutiny, the court found that the
ordinance was substantially related to curbing scenic degradation
while allowing landowners three distinct levels of review,
depending upon the impact of the development proposal. We
will keep readers informed of any appeal or as-applied challenges
in this latest round of Lake Tahoe litigation.
MARCH 2004
Expect Another Cert. Petition (and Denial) Regarding Species
Protections
On March 1, the U.S. Supreme Court denied certiorari in a
Commerce Clause challenge to federal endangered species protections
for the arroyo southwestern toad. See Ranch Viejo, LLC
v. Norton, 124 S. Ct. 1506 (denying cert. in No. 03-761).
But just days earlier, the Fifth Circuit teed up a similar
case by denying rehearing en banc with a six-judge dissent
that almost certainly will prompt another petition for certiorari.
See GDF Realty Investments, LTD v. Norton, 2004 WL
396975 (5th Cir. Feb. 27, 2004) (denying rehearing and rehearing
en banc).
In GDF Realty, the court rejected a Commerce Clause
challenge to federal protections for various species of invertebrates
that reside in underground caves in central Texas. The protections
undermined plans for commercial development of a 216-acre
tract. Rejecting the approach used by the D.C. Circuit in
Rancho Viejo, the Fifth Circuit concluded it would
be improper to focus on the commercial nature of the activity
being regulated, but nonetheless ruled that the protections
are valid under the Commerce Clause because they promote the
interdependent web of all species, which as a whole has a
sufficient connection to interstate commerce to justify regulation.
On February 27, the court denied rehearing en banc, but six
judges dissented, arguing that the panel's rationale is
unfaithful to recent Supreme Court teachings on the proper
scope of the Commerce Clause. Because there is no genuine
circuit split on the validity of these protections, the Supreme
Court should, and probably will, deny cert. once again.
FEBRUARY 2004
Principled State Amici Defend Federal Authority
In last month's issue, we mentioned that in Alaska Department
of Environmental Conservation v. U.S. EPA (2004) (AEC),
13 States filed an amicus brief opposed to the position of
the State of Alaska and in favor of EPA. This intriguing development
by these State AGs was by no means an isolated occurrence,
and we expect similar briefs to be filed in future cases.
In AEC, a bipartisan coalition of the 13 State amici
-- Vermont, California, Connecticut, Maine, Massachusetts,
Michigan, New Hampshire, New Jersey, New York, Oregon, Rhode
Island, Wisconsin, and the Pennsylvania Department of Environmental
Protection -- successfully argued that EPA had authority to
trump Alaska's determination specifying pollution control
technology under the Clean Air Act. While recognizing that
it might seem "counterintuitive" for States to take
a position against another State, they insisted that EPA's
oversight role "provides a necessary backstop and contributes
to consistent application of the Act," and promotes the
interest of all States "by assuring that each State carries
out its obligations under the Act."
Likewise, in South Florida Water Management District v.
Miccosukee Tribe of Indians (No. 02-626), a coalition
of 14 States argued against the water district, contending
that the Clean Water Act allows federal authorities to manage
water diversions even where the source of the diversion is
not the original source of the pollutants in the water. "[B]ecause
watersheds do not respect political boundaries," they
argued, "downstream States have a substantial interest
in protecting their water bodies through the uniform processes
and remedies provided by the Act against the transfer of pollutants
originating in upstream States."
State amici similarly supported federal authority
in the 2001 SWANCC wetlands case and in the 2000 Morrison
case involving the Violence Against Women Act, and even more
remarkably they argued against sovereign immunity under the
Family and Medical Leave Act in the 2003 Hibbs case.
We applaud these visionary efforts by the States to look beyond
the knee-jerk, federal-state power struggle, and to support
the national floor of minimum protections that every community
deserves.
JANUARY 2004
How Consistent Are the Court's "Friends of Federalism"?
On January 21, four of the Supreme Court's so-called "friends
of federalism" let out a war whoop of Deanian proportions,
complaining in dissent that the Court's ruling in Alaska
Department of Environmental Conservation v. Environmental
Protection Agency "relegate[s] States to the role
of mere provinces or political corporations, instead of coequal
sovereigns entitled to the same dignity and respect."
Justice Kennedy's opinion -- joined by Chief Justice Rehnquist
and Justices Scalia and Thomas -- lambasted the majority's
conclusion that the federal Clean Air Act authorizes the Environmental
Protection Agency to override a decision by the State of Alaska
determining the air emissions technology required to allow
a 40 percent expansion of a large zinc mine. Specifically,
the court ruled that the Act authorizes EPA to block construction
or expansion of a facility when EPA decides that the State
specification of "Best Available Control Technology"
is unreasonably lax, even though the Act directs the States
to make those determinations. The opinion is available at
http://www.supremecourtus.gov/opinions/03pdf/02-658.pdf.
Put aside, for the moment, the amicus brief filed by 13 States
in support of EPA and against Alaska. A more fundamental question
arises: Is the dissent's professed allegiance to federalism
genuine and consistent or, as some commentators have suggested,
simply a guise to advance an anti-regulatory agenda? Another
Clean Air Act case before the Court this term could provide
an intriguing glimpse into whether federalism still has friends
among the Justices when industry groups argue against it.
In Engine Manufacturers Ass'n v. South Coast Air Quality
Management District (U.S. No. 02-1343), auto manufacturers
are challenging modest rules by a regional authority in southern
California that require large public and private fleets to
purchase cleaner vehicles. In the Los Angeles Basin, vehicles
produce 80 percent of the emissions that form smog, and diesel
engines account for 70 percent of the total cancer risk from
air pollution. The rules are expected to reduce nearly 5000
tons of emissions per year by 2010 by introducing cleaner
school buses, airport shuttles, garbage trucks, street sweepers,
and other fleet vehicles.
Industry argues that the rules are preempted by section 209(a)
of the Clean Air Act, which prohibits state and local governments
from adopting any "standard" relating to the control
of emissions. But it's clear from the Act that "standard"
is a term of art that applies to limitations imposed on car
manufacturers and sellers, not purchasers. Industry basically
urges the court to read the Clean Air Act as creating a centralized
command-and-control regime under which the federal government,
rather than the affected localities, must play the lead role
in addressing local pollution problems. In contrast, the courts
below held that state and local authorities may pursue innovative
pollution control programs targeted at vehicle purchasers,
so long as they do not impose emission limits on manufacturers.
Community Rights Counsel worked with the State and Local Legal
Center to prepare a brief on behalf of our nation's cities,
air officials, and other state and local officials in support
of South Coast.
The Court heard argument on January 14. We were delighted
when counsel for South Coast, Seth Waxman, expressly referred
to our brief during the argument. By the end of June, we'll
learn whether federalism as applied in this Term's Clean Air
Act cases is a one-way street in favor of industry.
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