Wednesday, December 31, 2008

Collins and Shands Regulatory Taking Decisions Reversed by Third DCA

The Third District Court of Appeal released its REVERSALS of Circuit Judge Audlin's dismissals of Collins, et al., v Monroe County & The State of Florida, and Shands v. City of Marathon, on New Year's Eve -- six months after oral argument. And the opinion is signed by District Judge Suarez -- not Chief Judge Gersten -- so I got that part wrong.

You can read the opinions by clicking on their captions in the previous sentence. You can also view them on the Court's website by clicking on the title of this post. The Collins case number is 3D07-1603; Shands is case number 3D07-3288.

After extensive hearings before Chief Judge Richard Payne after the Collins case was filed in late 2004 -- all favorable to the landowners -- his successor, David Audlin, made it very clear that he was going to get rid of our regulatory taking cases any way he could. He did just that by declaring that the 11 Collins landowners had not sued within four years of the effective dates of the County's confiscatory ordinances. Rescinding Judge Payne's rulings in the landowners' favor -- without even the merest request to do so from the defendants -- Judge Audlin ruled that the County's unique Beneficial Use Determination ("BUD") process did not "ripen" an as-applied taking claim. Following this train of thought, he ruled that the Plaintiffs had not filed their taking claims within the four-year statute of limitation.

On appeal, government counsel (including the County's multi-million dollar lawyers from Kansas City) argued that the BUD process was a meaningless exercise -- despite the fact that this same Court of Appeal had ruled otherwise in one of our earlier cases, Key West v Berg, 655 So. 2d 196 (Fla 3d DCA 1995), and despite the fact that Michael Berg, counsel in the companion Shands case (argued back-to-back with Collins), had successfully convinced the Third DCA in Key West v Berg that a landowner had to go through the BUD process to ripen a regulatory taking claim.

Given their propensity for obfuscation and delay, I guarantee government counsel will move for rehearings in both Collins and Shands -- without success -- and will seek discretionary review by the Florida Supreme Court -- which will be denied, in part because the Third DCA's opinions in these cases only affect a single Florida County. So we probably will not be back in the trial court for another six months.

Note added 1/1/09: Judge Suarez' opinions in Collins and Shands suffer slightly from some irrelevant dicta (dicta = statements made by the court that are not based upon the record, nor necessary to the decision in which they appear), perhaps intended to reduce the impact of his opinions on Monroe County's psyche. In particular, we note Judge Suarez' dicta that there were no zoning ordinances in Monroe County before 1986, leading to his suggestion that, just maybe, some landowners who bought before 1986 may have no investment backed expectations. Not only are these remarks outside the record, but they assume an incorrect premise. Monroe County's first formal zoning regulations were adopted on December 8, 1959, and became effective January 4, 1960. Prior to that, there were recorded, platted subdivisions that established residential land use densities as early as the 1920's. While there are times when dicta can be helpful, dicta based on erroneous assumptions are not helpful. We will probably bring this matter before the Court before the opinions become final.

Once the Third DCA denies the governments' motions for rehearing, the Collins and Shands decisions become final. At that point, we expect the Court will remand the Sutton v Monroe County, McCole v Marathon, and Beyer v Marathon cases to the trial court -- as they all suffer from the same wrong logic as Collins and Shands. McCole and Beyer are Audlin dismissals, and were expected. Sutton was dismissed by Judge Garcia, much to our surprise and dismay. There are also some housecleaning issues we need to take care of when these cases come back to the trial courts. Happy New Year, Everyone!

Saturday, December 13, 2008

The Latest Voice of Reason is Online

You can download the latest issue of our newsletter, The Voice of Reason, today. We mailed thousands of newsletters in the 90's when we were challenging the 1996 Florida Keys Comprehensive Plan. We didn't like it then and we don't like it today, so we decided to resume publishing a newsletter.

There was a reason the drafters of the United States Constitution wanted a bill of individual rights in 1789. The first 10 Amendments -- the Bill of Rights -- were intended to protect the minority from the tyranny of the majority. Majority rule was presumed to lead to problems, and Alexander Hamilton and James Madison wrote extensively on the issue. Read The Federalist Papers, particularly Federalist 9 (Hamilton) and 10 (Madison), on "faction."

In the current issue of The Voice of Reason, we offer to create a web-based database that will reveal the governments' below fair-market-value offers for unbuildable property. Currently those offers are government "secrets," and nobody can obtain copies of these offers with public document requests. But nothing stops landowners from making their offers public.

Now we need to develop a strategy retroactively obtain supplemental compensation for former landowners who were paid only a fraction of what their property was worth. This may perturb homevoters and planners, but there is nothing in the Constitution that protects the government from such claims.

Friday, December 12, 2008

Big Three Bailout Drafters Stymied by 5th Amendment Taking Clause

Though the Big Three "Bailout" bill is apparently history, yesterday's Wall Street Journal ran a fascinating story on Capitol Hill's legislative drafting geniuses, who tried to move a bill that ignored the Fifth Amendment's "Taking" Clause. Here is the gist of the story.
Controversy erupted after a draft bill Monday stated plainly that the government loans would be "senior and prior to all obligations, liabilities, and debts of any such holding company or company that controls a majority stake in the eligible automobile manufacturer."

Loans backing Ford Motor Co. and General Motors Corp. slumped Wednesday amid concerns that the auto makers' existing senior secured loans could be subordinated to federal loans ....

"It really sounds like a clear violation of the taking clause of the Constitution, to put the government ahead of all the other lenders. To go this route is a treacherous path riddled with all sorts of constitutional issues," said Don Workman ....
The WSJ article correctly pointed out that the priority this language would have given the government "lender" was equal to the status of a DIP, or "debtor-in-possession" lender. In a Chapter 11 proceeding, the debtor submits itself to the oversight of the US Bankruptcy Court, establishes that its debts exceed its assets, and asks the Bankruptcy Judge to approve a DIP loan that will have super-priority status. By then, the debtor (failed company) has established, to the Court's satisfaction, the fact that the debtor's unsecured lenders, shareholders, bondholders, and to some extent the secured shareholders, have no chance of repayment -- unless the DIP can pull this business out of the ashes and turn it back into a profitable enterprise.

Then the DIP loan is approved and the debtor can buy raw materials, pay its workers, and ship product to its customers. Nobody would be a DIP lender unless their priority exceeded the debtor's former debt-holders' priority. What these Capitol Hill drafters were trying to do was to skip over the bankruptcy filing niceties, and establish the United States as the DIP loaner. According to the WSJ article, it is not clear that these drafters understood what they were doing. It is equally unclear why the car companies need Congress help to do what they should do: get rid of the non-working drones, shut down the non-functioning facilities, identify a niche where they can deal and make a profit.

The WSJ article notes that the drafting staff came up with some new language, but that nobody was ready to embrace their second effort. What is clear is that 40+ members of the Senate were not buying into this "prepackaged bankruptcy" deal, and would rather let the companies go through the usual bankruptcy process -- if that turns out to be necessary.

Thursday, December 11, 2008

Monroe County Commission Warned State Loss in Condemnation Blight Cases Poses Major $$ Problem

On the Monroe County Commission's agenda for December 17, 2008, is a request from the County Attorney's office for permission to file an amicus curiae brief in the State's appeal of the $6.9 million (plus costs, post-judgment interest at 11%, and attorneys fees) West & Richardson Condemnation Blight judgments. To quote from the request:
On April 9, 2008 - prior to the jury trial on compensation - the trial court entered an "Order Granting Defendants' Motion In Limine on the Issue of Condemnation Blight." The property owners contended that precondemnation actions of the State and County blighted the property by preventing all, or substantially all, beneficial use of the property. The Order prohibited the parties from presenting any evidence regarding the effect of any County or State regulation promulgated, enacted or amended after February 8, 1982. The Order required that the jury be instructed to determine the Fair Market Value of each parcel as of the de jure takings in Spring 2004, according to the highest and best uses they would have had on February 8, 1982.
On October 8, 2008, the trial court entered final judgments awarding just compensation totaling $6,877,257 (plus costs and attorneys' fees). On October 30, 2008, the State of Florida filed Notices of Appeal of the two final judgments. This matter is of great importance to the County because the appellate court's decision will potentially set precedent applicable to the inverse condemnation actions currently pending against the County. In some of those actions, plaintiffs have similarly asserted theories of condemnation blight. The acceptance or rejection of those theories will impact how property is valued for purposes of determining just compensation awards, and either increase or decrease the County's liability exposure.
Other than having an incorrect date for the Condemnation Blight Order (it was April 9, 2007, not 2008), and omitting the fact that the judgments are earning 11% interest per year, we agree that the County could be in deep trouble here -- but so is the State.

Chief Judge David Gersten Breathes New Life into Property Rights in South Florida

Third District Court of Appeal Chief Judge David M. Gersten, appointed in 1989 by Governor Martinez, has given us few hints of his judicial philosophy. Apparently, the judges are assigned to the same number of panels (about 750) each year. But, as of mid-2008, Judge Gersten had averaged 11 signed opinions/year since he was appointed. Compare this to Senior Judge Alan Schwartz, who has averaged 45/year for 30 years, or to Judge Cortinas, who has been on the bench only three years, but has signed 46 opinions/year.

Two months ago, in CNL Resort Hotel v City of Doral, 991 So.2d 417, Chief Judge Gersten turned a lot of South Florida lawyers' heads in a remarkable decision. On the surface, the issue seemed pretty simple ... whether a property owner can challenge a comprehensive plan on the basis that it fails to protect [the owner's] property rights. Even the Florida Department of Community Affairs agreed that the property owner had a legitimate gripe. But the City of Doral and the ALJ disagreed.

Judge Gersten (with the apparent agreement of Judges Shepherd and Rothenberg), simply buried the ALJ -- and the City of Doral's lawyers -- with the following exposition on property rights.
Private property rights have long been viewed as sacrosanct and fundamentally immune from government interference. The strong tradition of protecting private property rights against governmental interference stems back to both English common law and Lockean philosophy. Lockean philosophy emphasized that property rights are a natural, pre-political attribute of human beings. See James W. Ely, Jr., The Guardian of Every Other Right: A Constitutional History of Property Rights 10 (2d ed. 1998).
Thus, it was only natural that our constitutional founders would safeguard property from governmental intervention. Our founders drafted the Fifth Amendment of the United States Constitution to provide that no person shall have property “taken for public use, without just compensation.” See U.S. Const. Amend. V. The Fifth Amendment, Takings Clause, is made applicable to the states through the Fourteenth Amendment. See U.S. Const. Amend. XIV. Florida’s state constitution also provides that “no private property shall be taken except for a public purpose and with full compensation.” See Art. X, §6, Fla. Const.
Florida further protects these sacrosanct private property rights when evaluating a comprehensive development plan. Florida zoning law requires that a governmental agency, such as the City, adopt a plan that coordinates with the state’s plan. See §163.3177(6)(h), Fla. Stat. (2006). Florida’s State Comprehensive Plan provides that “Florida shall protect private property rights and recognize the existence of legitimate and often competing public and private interests in land use regulations and other government action.” See §187.201(14)(a), Fla. Stat. (2006). Further, the goals and policies contained in the State Comprehensive Plan shall be reasonably applied where they are economically and environmentally feasible, not contrary to the public interest, and consistent with the protection of private property rights. See §187.101, Fla. Stat. (2006).
Without belaboring the point, Judge Gersten's opinion concludes that CNL had every right to challenge a Comprehensive Plan that did not consider its impacts on CNL's property rights (i.e., property value). If that isn't a major breakthrough in this day of planning "for the sake of planners" -- and damn the landowners who get in their way -- nothing is.

I confess that I did not feel positively about Judge Gersten when he joined the other two members of the panel (Levy and Goderich, JJ) in Monroe County v. Ambrose, et al., 866 So. 2d 707 (Fla. 3d DCA 2003), a 500+ plaintiff suit to establish statutory vested rights to build on platted lots in the Florida Keys. I was then, and remain, firmly of the opinion that this was part of a legitimate compromise made by the Florida Senate in 1972 when it adopted the Area of Critical State Concern statute, for the simple reason that no State Senator wanted part of his jurisdiction to be subjected to a State takeover of local zoning laws. It helped that a well-preserved legislative history conclusively proved our point. In Ambrose, Judges Gersten, Levy, and Goderich simply re-wrote the law the way they wanted it to be. Maybe they thought it would be too disruptive to overturn the "Save the Keys" applecart after 20 years of State tyranny, but I still believe their decision was wrong.

Now, if we could just get Judge Gersten to write faster. It took 385 days after oral argument, for this non-final order appeal to be decided. Presumably, there was even a longer delay in the administrative ComPlan proceedings below. The Ambrose per curiam decision was written in 308 days. Wars have been started, and won or lost; babies are conceived, born, and in bassinettes; or you can get an MBA; in 385 days. 385 days is just too long to wait for an eight-page opinion (especially when it's an appeal from a non-final order).

P.S. I admit that being on 750 panels/year -- that's 15/week, or 3/day if you get 2 weeks of vacation -- would drive most people crazy.

Wednesday, December 10, 2008

Condemnation Blight in the Florida Keys

From 1979 to 1986, the State of Florida forced a confiscatory land use regime on the landowners of the Florida Keys, through its woebegone facilitators, the Monroe County Commission. One of Governor Graham's targets, sure to pick up votes for his senatorial campaign, was the area between Jewfish Creek and the Ocean Reef Club. This area, known as North Key Largo, had been the locus of pre-development activities since the mid-1970's. Interest had picked up as the water and electricity utilities announced their intentions to serve North Key Largo. And Fritz Scharenberg, a successful Key Biscayne developer, announced his intentions to build a 2,500 unit development, called Port Bougainville, at the southern end of North Key Largo.

From the mid-1970's through 1983, Fritz Scharenberg received all the necessary development approvals for his project, and another half-dozen major developments had entered the development approval pipeline. Lawsuits were filed by environmental opponents, and the State of Florida placed its heavy thumb on the scale by demanding the County Commission adopt a "major development moratorium" -- which it did on February 9, 1983 -- precluding indefinitely any development approvals that involved more than five acres or 50 dwelling units. The alternative offered to the County Commission, was that the Florida Department of Community Affairs (its current name) would adopt the moratorium under the supervisory powers granted to it by the 1972 Legislature under the guise of protecting "Areas of Critical State Concern." (The State Legislature had so designated the Florida Keys in 1979.)

The February 9, 1983 moratorium was extended several times until it was replaced by a "one-year" moratorium on September 15, 1986. The 1986 moratorium was "intended" to allow the development of a Habitat Conservation Plan (HCP) for North Key Largo, said HCP to be completed within 6 months of September 15, 1986. The HCP was never approved by Monroe County -- and was actively opposed by state agencies anxious to keep the moratorium in place -- and the moratorium is still in place as I write this post, more than 21 years after it was to expire.

During the past 22 years, most North Key Largo landowners capitulated and sold their property to the state for 10 to 15 cents on the dollar. (I mean what it would have been worth if the County-State moratorium had not been in effect.) There were a few hard-shelled landowners who said "no" to every offer that came their way. Eventually the State had to commence eminent domain proceedings to get the curmudgeons out of the way.

In 1995, the State filed a "slow-take" condemnation action against two North Key Largo parcels. The first thing we did was file a counterclaim in inverse condemnation (since slow-takes can be abandoned by the condemnor), that also raised the Condemnation Blight issue. Fortunately, the real estate market went crazy in 2001. After watching those numbers for some time, the State converted its slow-take claims into "quick-takes" in 2004. When that happened, we asked the Court to rule on the Condemnation Blight issue we had raised in 1996.

That took three hearings and the testimony of two County Commissioners from the 1982-88 era. The Court agreed that North Key Largo was blighted, and ordered the parties to prepare appraisals that disregarded all land use regulations (State, County, and Federal) that were adopted after February 8, 1983.

The case finally went to trial in April 2007 and, given the Court's Condemnation Blight instructions, yielded verdicts that far exceeded the "good-faith" deposits of $550,000 for Parcel 1 and $80,000 for Parcel 7. The jury returned verdicts of $5,060,000 on Parcel 1 and $450,000 on Parcel 7. The State appealed both final judgments on October 30, 2008.

At the top of this blog entry is a miniature version of the convincing piece of evidence in the Condemnation Blight hearings. That chart, showing that private property transactions ended, and government ownership took off like a rocket, simultaneously, in 1982-84. This is the kind of evidence it takes to establish Condemnation Blight. And it is relatively easy to cull from the county property appraiser's database.

Government "intentions" don't matter. What the market does, matters. Our win in the West-Richardson case has been appealed, and we hope to come out of this with a written opinion from the Florida 3rd District Court of Appeal. There are another 3,500 owners of 7,500 parcels of land in the Florida Keys who will benefit from this decision.

Wednesday, December 3, 2008

No Decisions Yet in Collins or Shands

It's been 22 weeks since the oral arguments in the regulatory taking lawsuits Collins v Monroe County & the State of Florida (11 plaintiffs), and Shands v the City of Marathon. No "substantial" [my adjective] opinions in civil appeals were released today. Only three civil opinions were released, and they were certiorari decisions -- appeals from non-final orders that are usually decided quickly. The Collins and Shands cases are appeals from final judgments -- which take much longer to decide. For the past three months it has taken 111 days (16 weeks) after oral argument -- on average -- for the 3rd DCA to release "substantial" civil opinions. But 25% of those opinions took from 112 to 519 days.

I think there is a high probability that Chief Judge Gersten is writing the Collins and Shands opinions. Two of the three longest gestation times for opinions released the past three months (385 and 427 days) were opinions signed by Judge Gersten -- Levin v. Lang and CNL Resort Hotel v City of Doral. Compared to the District Court's current 111-day average release time, Judge Gersten's opinions take longer to see daylight. His average release times in the past three years are 129 days after oral argument when affirming, and 169 days when reversing. Today is the 156th day since the oral arguments in Collins and Shands.

We filed two more regulatory taking appeals last month, McCole and Beyer (vs the City of Marathon), and both were dismissed by Judge Audlin on Statute of Limitation grounds. A third will be filed as soon as a Final Judgment is signed by Judge Garcia (Sutton v Monroe County). Judge Garcia's decision is based on the same flawed reasoning that Judge Audlin applied in Collins, Shands, McCole, and Beyer.

For more information on these appeals, click on "Takings Appeals under "Labels" in the left-hand margin. Unless special circumstances exist, the Third DCA releases its decisions on Wednesdays by 10:45 AM. Clicking on the title of this post will take you to the Third DCA's website.

Update: December 10, 2008. No decision today either.

Tuesday, November 18, 2008

Does Laches Bar Prosecution of Code Violation 24 Years after Gov't has Knowledge of Non-Life Threatening Infraction?

In 2001, Sandra Carter bought a modest single-family, stilt house in the Florida Keys -- built in 1976 -- for $116,000. The house came with a history that is on its way to becoming an enigma. There is an enclosed area on the ground floor (below base flood elevation) that, according to Monroe County, violates the local floodplain ordinance. On June 8, 2007, Code Enforcement cited her on six counts, including using the enclosed space for habitation, using the space (for anything?), and turning her single-family home into a duplex. Though her attorney raised laches as a defense, the hearing officer concluded that Ms. Carter must have known the structure was illegal because she "had worked as a realtor in Monroe County." She was ordered to cease, desist, obtain an after-the-fact permit (which they won't give her), or demolish "as directed."

What Ms. Carter "knew" seems a a stretch. If a drug dealer knew he was committing a crime, does his knowledge toll the statute of limitation? I don't think so. And, for those who do not live in flood-prone areas, these enclosed areas have always been allowed in the Florida Keys (with a building permit). What is not allowed is renting them out as apartments (or even allowing the grandchildren to sleep there). The standard FEMA flood insurance policy even insures freezers, water heaters, air conditioners, washers and dryers in such enclosures.

Ms. Carter appealed, again raising laches as a defense. The Circuit Court noted that the "illegal" enclosure has been on the Property Appraiser's records since at least 1983, and probably since the late 1970's. But Code Enforcement's citation omitted the date the "illegal" space was enclosed (i.e., heinous crime committed). On that technical detail, the Court reversed the hearing officer's order. In its September 29, 2008 opinion, the Court also stated:

"... the date of the offense has created an enforcement situation where the County is belatedly taking action against a property owner, at least twenty-four years after the violation was apparently known to the County. Under these circumstances, it is entirely possible that the doctrine of laches would properly preclude such a belated enforcement."

Kudos to Ms. Carter's attorney, Lee R. Rohe, for a job well done. Now he needs to follow though with the Third District Court of Appeal, and get a nice, precedential written opinion.

Friday, November 14, 2008

Local Judges Dismiss Three Regulatory Taking Cases on Statute of Limitations Grounds

As we predicted a year ago -- in an October 12, 2007 post -- 16th Circuit Judge Audlin dismissed Beyer v City of Marathon & the State of Florida and McCole v City of Marathon & the State of Florida, for failing to sue within 4 years of enactment of the confiscatory ordinances. He reached this conclusion -- unless he doesn't read, or can't understand, the case law we provide him, or he just doesn't care -- fully aware that Keys landowners have to ripen their taking claims by applying for -- and obtaining -- a final decision via the "Beneficial Use Determination" procedure, or by filing a building permit application, waiting 4 years, and then asking for "Administrative Relief." And that the Statute of Limitations does not start to run until the administrative proceeding has concluded. [The 4-year wait in the permit queue is a dead giveaway.]

We filed Notices of Appeal in McCole on November 5, 2008 (3rd DCA Case No 3D08-2841), and Beyer on November 12, 2008 (3rd DCA Case No 3D08-2864). In an ideal world, both appeals will be mooted by the Third DCA's reversal of Judge Audlin in Collins.

As I noted in a post eight months ago -- March 16, 2008 -- 16th Circuit Judge Garcia also dismissed a regulatory taking claim -- in Sutton v Monroe County. We amended that complaint to state a cause of action for a due process taking. Ultimately we believed it was unnecessary to go through a Due Process trial when the dismissal of her regulatory taking claim is likely to be reversed by the District Court of Appeal. We recently dismissed the due process count, and Judge Garcia will be entering a Final Judgment, giving us a "hat trick" to take up to the 3rd DCA.

Wednesday, November 12, 2008

Half Moon Bay Revisited

In a post last December 1, I reported the $37 million judgment awarded to the owner of 24 acres of oceanfront land in Half Moon Bay, California -- 18 miles south-southwest of San Francisco Int'l Airport. In Yamagiwa v. City of Half Moon Bay, a U.S. District Judge held that the city, in imposing a series of land development regulations, and excavating nearby areas for stormwater drainage -- that converted the property into undevelopable wetlands -- had "taken" the property and was liable for $37 million in Just Compensation.

In his March 2008 newsletter, Just Compensation, Gideon Kanner noted that the parties had settled. In that agreement, the city will either allow the landowner to develop the property for residential use. If it fails in that endeavor (presumably a euphemism for the California Coastal Commission's lead feet) the city will have to pay the owner $18,000,000.

Monroe County and the State of Florida will please take note of this interesting "development," and think hard about whether they want to keep on heading for the same treatment.

Saturday, November 8, 2008

Big Pine Key - No Name Key Class Action "Taking" Lawsuit

On September 26, 2008, we served Monroe County and the State of Florida with an Amended Complaint in a class action "taking" lawsuit brought by eight owners of 27 undeveloped Tier I properties on Big Pine and No Name Keys. (Estate of Lightner, et al., v Monroe County & the State of Florida, Case No. CA-K-07-280, assigned to Circuit Judge Mark Jones.) You can view or download the Amended Complaint by clicking here or on the title of this post. In July '08, there were about 1,279 to 1,310 privately-owned, undeveloped parcels of land designated Tier I -- and 438 designated Tier II -- on Big Pine and No Name Keys. According to the 2005 County/State Habitat Conservation Plan (HCP), 99.3% of the Tier I parcels on Big Pine and No Name Keys are absolutely unbuildable. (The nine theoretically "buildable" parcels are a fiction intended to inhibit the filing of this lawsuit, and that is a blog post for another day.)

Estate of Lightner seeks two forms of relief from confiscatory regulations, under both the Florida and United States Constitutions. Counts I (US Const.) and II (Florida Const.) are Substantive Due Process counts for declaratory judgments holding the tier system, the HCP, the acquisition of an incidental take permit from the USF&WS, and numerous ordinances and comprehensive plan provisions, invalid as unconstitutional "no-use" zoning. Counts III (US Const) and IV (Florida Const.) are claims for Just Compensation for the regulatory "taking" of the class properties.

According to the HCP, there are 2,214 privately-owned, undeveloped parcels within 500 meters of Lower Keys marsh rabbit (a/k/a "bunny rabbit") habitat on Big Pine and No Name Keys, including 1,535 in Tier I, 510 in Tier II, and 167 in Tier III. Although some of those parcels have been purchased -- at well below fair market value -- by government, most of those 2,214 parcels are also unbuildable. (As the 500m habitat boundaries slice through parcels on the perimeter, some of those parcels, if they are in Tier III, might be buildable someday.)

Estate of Lightner states the elements necessary for designation as a class action, and our next move is a class certification motion. There is sufficient precedent for class action "taking" lawsuits, and there is no real reason for denying a certification in this case. (And, if certification is denied, that order is immediately appealable.) Should class certification be granted, the class will include all non-governmental owners of undeveloped Tier I properties on Big Pine and No Name Keys, and of Tier II and III properties that fall entirely, or almost entirely, within the bunny rabbit circles.

Should class certification be denied by both the trial and appellate court, only named Plaintiffs will be eligible for declaratory relief and Just Compensation. We are opening this case up to all affected Big Pine and No Name Key landowners to become named Plaintiffs. Even if class certification is granted, having additional Plaintiffs can only help us by bringing additional facts to the table, and allow us to invest a larger portion of our time to this lawsuit. Affected Big Pine and No Name Key landowners may join either as a named Plaintiff, or as a non-party who will become a named Plaintiff if class certification is denied. To join the Estate of Lightner lawsuit in either capacity, please call me at (305) 451-3951. You cannot join a lawsuit by e-mail.

P.S. We took a similar route in the multi-plaintiff vested rights lawsuit Ambrose v. Monroe County, where we eventually had over 500 named Plaintiffs. In that case we elected not to seek class action status. We won before the trial court but Judge Payne's decision was reversed by the 3rd DCA acting as legislators instead of judges.

Sunday, November 2, 2008

State Appeals North Key Largo Verdicts

On October 30, 2008, the State of Florida filed Notices of Appeal on the two Judgments totaling $6.9 Million (not including costs & attorneys' fees) rendered by 16th Judicial Circuit Judge Luis Garcia on October 8, 2008. The State's lawyers obviously believe the landowners' Condemnation Blight defenses raised in this case (filed in 1995!) will be employed by other landowners in the Florida Keys -- raising the cost of stealing property in the Florida Keys by several hundred percent.

Can you just imagine! Landowners demanding Fair Market Value for their property, when the State has been getting away with grand theft for the past 12 to 15 years! Heaven Forbid! It looks like the Florida appellate courts are going to get another opportunity to explain, to the State property thieves, that they cannot get away with driving property values down with regulations -- so they can steal the land for pennies on the dollar.

A Florida District Court appeal often takes a year to reach a decision, and two years is not at all unusual. At 11%, however, this appeal -- presuming we prevail -- will cost the State about $2,400 per day (nearly $900,000 per year) in interest alone.

Unfortunately, a million dollars a year is a small price to pay if the State can bamboozle more landowners to "voluntarily" sell their land to the State for 15% of Fair Market Value. At $40,000 per parcel, which is what the State has been paying, it would cost only $8 million to buy 200 Florida Keys parcels (which is what it bought in the past two years). If it had to pay Fair Market Value -- as it will for the two parcels now on appeal -- 200 parcels would cost on the order of $50 million!

In order to put a stop to this highway robbery, we will be mailing a special issue of our Voice of Reason newsletter to every owner of undeveloped Florida Keys property. We will urge these landowners to demand full Fair Market Value for their property. Enough is enough!

Thursday, October 9, 2008

$6.9 Million Awarded in Keys' Taking Case: Appeal May Delay Payment but, at 11% Interest Who Cares?

On October 8, 2008, Circuit Judge Luis Garcia entered judgments totaling $6,877,257plus costs and attorneys’ fees – as Just Compensation for two parcels on North Key Largo. The West heirs were awarded $5,050,000 plus $1,848,114 interest, for the State’s 2004 condemnation of 21 acres (+5.6 acres of submerged land). Richardson, et al., were awarded $450,000 plus $149,142 interest, for a 4-acre parcel. Yet neither parcel has had any development rights since 1983, when the County began a series of “rolling” development moratoria in the Keys. In 1986, the State and County adopted a “one-year” moratorium on all development on North Key Largo (except Ocean Reef, Anglers’ Club, and some subdivisions). The 1986 moratorium remains in effect today – over 22 years after it was imposed.

Judge Garcia agreed with our assertion that these government acts constitute Condemnation Blight, and ordered the State to appraise the properties as if no land use regulations had been adopted since 1983. The Fair Market Values (FMV) of the properties were to be determined as if they were as buildable today as they were on February 8, 1983.

When the State condemned the parcels in 2004, it had to deposit “good-faith estimates” of FMV into the registry of the Court. It deposited $550,000 for West and $80,000 for Richardson. This supports our position that the State is purchasing Keys’ land at unconscionably low prices. Comparing the jury verdicts – FMV as of 2004 – to the State’s good-faith deposits, the FMV of the West parcel was 9.2 times the State’s “good-faith estimate,” or 11 cents on the dollar. The FMV of the Richardson parcel was 5.6 times the State’s “good-faith estimate,” or 18 cents on the dollar. Combining the two yields 11-½ cents on the dollar – a ratio of FMV to purchase price of 8.7 to 1.

Keys’ landowners are clearly being snookered by government. To landowners who have so far resisted the governments’ offers of 10 to 15 cents on the dollar, we say stand pat; sit tight; do nothing. Ignore their offers. If the government does not begin condemnation proceedings, you can force the issue by suing the government for “inverse condemnation.”

If you must say something, say "condemn it"! There are four court decisions on my website,, that describe similar deceptive tactics by the United States government in the acquisition of Cape Cod National Seashore, Point Reyes National Seashore, Assateague Island National Seashore, and Voyageurs National Park. In the Voyageurs National Park scandal, the average FMVs reached by juries – when compared to the government’s appraisals and offers – averaged 8.85 times the amount the government offered before filing condemnation suits. In other words, the Government was “offering” only 11.3 cents on the dollar. Sound familiar?

The difference between the State of Florida's offers for undeveloped Keys properties, and their real Fair Market Value in condemnation proceedings, comes down to two words: Condemnation Blight. Owners of such properties -- who remain unconvinced -- should read Judge Garcia's Condemnation Blight Order in the West, et al. case discussed in this post. (This link takes you to my website.)

Landowners should also note that, in eminent domain proceedings ("condemnation"), attorneys fees and costs are paid to their lawyers on top of what the landowner is awarded by the Court -- which is usually bound by the jury verdict. There is no downside to an eminent domain proceeding, particularly when the government takes by a "quick-take" proceeding and has to pay interest on the jury verdict from the date of the quick-take. If the government sits on its hands and won't bring a condemnation proceeding, you can seek out a good inverse condemnation attorney and sue the government. You may bear some expense in that scenario, and the government may offer to settle by giving you a building permit. Once the current mortgage panic subsides, the demand for buildable land in the Keys should start rising again.

Addendum Dated Oct 30, 2008: The State filed its Notice of Appeal on both judgments today. During the appeal, interest will continue to run on the judgments, and on the separate costs and attorneys' fee awards, at the rate of 11% per annum. Under today's financial clouds, that's a pretty good investment.

Saturday, September 27, 2008

Florida Keys National Park? Are They Nuts?

As it's lead story, this morning's Florida Keys Keynoter announced that the Monroe County Administrator was planning to tell Florida Governor Christ and the other three "Cabinet" officials that the solution to the Florida Keys' land acquisition mess is to get Congress to designate the Keys a "national park." That, they surmise, would bring $1.2 billion to buy up all the Tier I and II land in these regulation-abused islands.

First, the County's $1.2 billion is off by nearly an order of magnitude. This is spelled out in the Amended Complaint we served yesterday in [Estate of] Lightner v Monroe County and the State of Florida, a Class Action that is pending before Judge Mark Jones in the 16th Judicial Circuit (Monroe County). Our analysis of the State's acquisition costs -- for Tier I properties on Big Pine and No Name Keys only -- revealed that the State acquired 204 such parcels, between January 2006 and July 2008, paying, on average, $40,321 per parcel (they were almost 100% "dry lots"). NOT ONE of these parcels was acquired by Eminent Domain.

Therein lies the problem. In eminent domain proceedings, a landowner has the right to raise the debilitating effect of Condemnation Blight -- which was the reason the West and Richardson plaintiffs in May of this year (2008) were able to recover nearly 10 times what the State was "offering" to purchase their moratorium-affected North Key Largo lands.

In an analysis carried out by real estate appraiser extraordinaire Bob Gallaher for our nearly $50 million in Bert Harris Act claims filed with Monroe County and the Governor's office this past Wednesday, Mr. Gallaher determined the average Fair Market Value (this term-of-art does not allow "sales to government" as evidence of Fair Market Value) of dry lots in the Lower Keys, as of January 2008, was $240,000. That is six times what the State paid for those 204 dry lots in the last 2.5 years. It does not take a rocket scientist to figure that the County's $1.2 billion figure could easily become $7.2 billion if the landowners refused to sell "voluntarily." While it's not $700 billion -- as Treasury Secretary Hank Paulsen is trying to extract from Congress -- $7.2 billion is not chump change. And, I should point out, Congress is going to be so worn out from the Wall Street debacles that it is highly unlikely Monroe County's "leaders" are going to see $1.2 billion, much less $7.2 billion, in this lifetime. QED.

It is time for someone to inform the owners of undeveloped land in the Florida Keys that they should simply refuse to sell -- and should either hold out for an eminent domain suit to be filed, or -- better yet -- just sue the County and State in inverse condemnation.

Wednesday, September 24, 2008

Say "Hello" to Bert (Harris, that is)

We served 41 Bert Harris Act petitions today on Monroe County and the State of Florida, seeking $46.7 million in compensation to the owners of 196 Florida Keys land parcels. These are only a tiny fraction of the number of parcels adversely affected by the Keys' recently-completed land-stealing pogrom (a/k/a "tier zoning"). Thirty-four claimants' properties are in Tier I, which are essentially unbuildable. Seven own Tier II property. For Tier I and II landowners to even compete for a permit, they would be forced to spend on the order of $235,000 for 20 points (Tier I) or $117,500 for 10 points (Tier II) just to begin with the same number of "points" a Tier III landowner starts with. AND they must acquire all but two of those 10 or 20 points by purchasing their neighbors' Tier I lots -- at 4 points apiece -- at the bargain basement prices the government has been paying. If this is not held unconstitutional -- and we will revisit that as each lawsuit is served -- I will eat my favorite hiking hat.

We strongly recommend Tier I, II, and III-A landowners refuse to sell their land at less than the Fair Market Value it would have if it had a building permit -- and flatly refuse to sell to any government agency. The purpose of the Tier pogrom is to force landowners to sell to government, or the other leeches (including the Tier I and II landowners themselves), at far less than the Fair Market Values they would receive in a Condemnation proceeding -- by invoking the legal doctrine known as Condemnation Blight. I have included some Fair Market Value information at the end of this post. If nobody offers that much -- do not sell! Either force the government to condemn, or bring your own inverse condemnation action. Either way, the government pays your costs, attorneys fees, and interest.

In May of this year, an Upper Keys jury awarded over $5 million to our clients, the West and Freeman families, four years (for which they will get another 10% interest/yr) after the State acquired their 20+ acres on North Key Largo for $550,000 in a "quick-take". (See my May 22, 2008 post). Just as in today's pogrom, the West-Freeman property was infected with Condemnation Blight building moratoria -- which allowed us to have the Judge instruct the jury to value the property as if the moratoria never existed. There is a more substantial analysis of Condemnation Blight on my website --

As it is now public record, I will share with you our appraiser's Fair Market Value analysis that we provided the County and State in several of the Bert Harris Act petitions. These are January 1, 2008, "generic" Fair Market Values -- that need to be adjusted if special conditions exist, such as too little lot area or the need to pay mitigation in order to place fill in a wetland -- for Upper and Lower Keys residential lots only.

Lower Keys Lots: Dry $240,000; Canal $320,000; Open Water $520,000
Upper Keys Lots: Dry $170,000; Canal $405,000; Open Water $610,000

Thursday, September 18, 2008

Statute of Limitations Decisions Remain Pending at Third DCA

Eleven weeks after the oral arguments, we are still awaiting the Third District Court of Appeal decisions in Collins v Monroe County & State of Florida and Shands v City of Marathon. No opinions in these cases were released this week. The Court did release its opinion in Bauknight v. Monroe County, a temporary taking case with at least one legal issue -- and a 2/3rds panel congruency -- in common with Collins and Shands.

Bauknight involved two Big Pine Key landowners who received building permit allocations -- but no building permits -- in 1996, and a third landowner who was similarly stiffed in 1997. By 2002, there were 23 Big Pine Key landowners in this inane limbo and, smelling "taking" lawsuits, Monroe County initiated a "beneficial use determination" (BUD) hearing on their behalf. Lo and behold, the BUD Special Master concluded the 23 had been "deprived of all beneficial use" of their properties, and recommended their permits be issued. The County Commission ratified the Special Master's recommendation in June 2002. Eventually, building permits were issued to the Bauknight plaintiffs.

The Bauknight Complaint was filed September 24, 2004, two years after the County's final BUD decision -- but eight years after the permit "allocations" were granted (seven in the Bauknights' case). Following a March 7, 2007 hearing (after Judge Audlin's dismissals of Collins and Shands on statute of limitation grounds), Sixteenth Judicial Circuit Judge Luis Garcia dismissed the case. Judge Garcia's remarks during that hearing indicated his concern that the Plaintiffs could delay filing their lawsuits for seven or eight years -- and just allow the damages to pile up year after year.

In the Third DCA's Bauknight opinion, the panel acknowledged -- as Williamson County held in 1985 -- that a regulatory taking claim does not arise until after the landowner ripens the claim, stating: "The owners were obligated to pursue relief under the beneficial use ordinance ... before the owners’ taking claims were ripe." As to whether a temporary taking claim can accrue before the BUD process is completed, the Bauknight panel held it cannot. The panel does, however, agree that the Bauknight plaintiffs' taking claims -- if they had any -- were ripe following the BUD decision in 2002. ("As a preliminary matter, the owners’ taking claims are ripe for judicial consideration.")

The difference between Bauknight and the Collins and Shands claims lies in the fact that the Collins and Shands plaintiffs were not granted building permits following their BUDs. The 11 Collins plaintiff-landowners received BUDs stating that they had been "deprived of all beneficial use of their property" and were "entitled to just compensation." However, neither the County nor the State commenced eminent domain proceedings to acquire the properties, and "just compensation" was never paid. In Shands, the City of Marathon's BUD Special Master recommended the City issue a building permit in order to avoid paying just compensation, but the City Council told the landowner to pound sand -- and then stuck its collective head in said sand.

The Bauknight panel consisted of Chief Judge David Gersten and District Judges Gerald Cope and Richard Suarez. Judges Gersten and Suarez also sat on the panel that heard oral arguments 11 weeks ago in Collins and Shands, along with District Judge Juan Ramirez. We are confident the Gersten-Suarez-Ramirez panel will reverse Judge Audlin's erroneous dismissals in Collins and Shands in the not-too-distant future.

Click here to see the latest Third DCA opinions, including the Bauknight decision posted yesterday (the Court's opinions are posted at 10:45 AM on Wednesdays).

Wednesday, September 10, 2008

Uppity Landowners Hand Defeats to "the Village with no Character"

In 2002, the Florida Keys village of Islamorada enacted a land use ordinance that prohibited "formula restaurants" [read "Starbucks"] and limited the frontage and square footage of "formula retail" establishments [read "Walgreens"] -- so that no national chain business could operate in the "quaint little village" [or so the Council thought]. In 2002, Glenn and Virginia Saiger, owners of Island Silver & Spice -- an "independent" retailer -- had a contract to sell their store to a developer that planned to build -- Ohmigosh! -- a Walgreens! In Islamorada! (Islamorada already had a CVS drugstore....) Absolutely Not! Said the sage village Council. Not in our fair village! Never! The Saigers sued in U.S. District Court.

In 2005, Joseph Cachia received an offer to buy his existing retail store -- also independent -- from a corporation that wanted to build a Starbucks in Islamorada. Oh, my! Not a Starbucks! Said the village Council, essentially telling Mr. Cachia to pound sand. Mr. Cachia also sued in U.S. District Court.

Mr. Cachia, unluckily, drew U.S. District Judge Michael Moore (of the FEMA list, for those who own undeveloped Keys land), who bounced Mr. Cachia out of court on a motion to dismiss. Judge Moore held that, as a matter of law, the ordinance was supported by a legitimate state interest. The Saigers, on the other hand, drew Senior (formerly Chief) Judge James Lawrence King -- for whom the Miami federal courthouse is named. Judge King came to the opposite conclusion, writing one of the funnier opinions of his career, and held that Islamorada had violated the United States Constitution's "Dormant Commerce Clause." In his opinion, Judge King observed the village of Islamorada had no "small town community" interest to protect.

Mr. Cachia appealed Judge Moore's dismissal, and Islamorada appealed Judge King's decision in favor of the Saigers. The appeals went to the 11th U.S. Circuit Court of Appeals, in Atlanta, where they were consolidated for oral argument before Circuit Judges Tjoflat and Black, and a visiting judge, Judge Restani. Oral argument was on June 3, 2008. Both appeals were decided two days ago, September 8, 2008.

The 11th Circuit panel affirmed Judge King's decision in Island Silver & Spice v. Islamorada, while reversing Judge Moore's decision in Cachia v. Islamorada. The Island Silver & Spice opinion can be read and downloaded on the 11th Circuit's website here, and the Cachia opinion here.

$$$, anyone? Judge King awarded substantial money damages, plus attorneys' fees, against Islamorada, and the 11th Circuit awarded additional attorneys' fees to both Island Silver & Spice and Mr. Cachia. Mr. Cachia's case will now be returned to Judge Moore for a trial on damages. We can be certain that Islamorada will be handing over sums well in excess of $1 million -- all of which will come from the village taxpayer's wallets! (Maybe they'll start thinking about their wallets when election time rolls around.)

All in all, a splendid job well done. Congratulations are due to local counsel John Jabro; to Jim Hendrick for taking off his government hat long enough to support these landowners; and to Joel Perwin, appellate counsel for both landowners.

Thursday, August 28, 2008

Homevoters Oust Moderate Commissioners: Property Thieves Coming Back

Florida Keys Homevoters turned two Monroe County Commissioners out of office in this week's primary, and retained one who should have been relieved of duty. Sonny McCoy and Dixie Spehar, two of three Commissioners who had been voting as a block recently to return some sort of common sense to the Keys, were defeated rather decisively. Ms. Spehar was drubbed by tree-hugger Kim Wigington, 67.0% to 30.6% (2.4% abstaining). Sonny McCoy didn't do much better, losing to Carlos Rojas by 59.9% to 37.1% (3.0% abstaining). Commissar Sylvia Murphy -- who has never seen a piece of vacant property that should be used for anything other than conservation -- kept her seat by defeating Sewer Board Chairman Gary Bauman by a mere 55.7% to 40.2% (4.1% abstained). Ouch!

Even though all three Commissars face opposition in the November general election, Monroe County Commissioners have all run as Republicans for years -- but Keys' "Republicans" are all over the political spectrum, from left of Barack Obama to right of Attila the Hun. The three challengers -- Democrats challenging Mr. Rojas and Ms. Wigington and a "no-party-affiliated" candidate (actually a client of ours, Sal Gutierrez) challenging Ms. Murphy -- are not likely to prevail in November.

It is fair to say that, come November, we will see the County shift back to a "steal the land and damn the torpedos (i.e., lawsuits), full speed ahead" mentality. This go-around, the new Commissars will have a plethora of pleadings on their plate. And Monroe County will no longer be able to waste millions of taxpayers' dollars on outside counsel (at rates as high as $750/hour).

For a discussion of Homevoters, see: William Fischel, The Homevoter Hypothesis, Harvard Univ Press 2001 -- Click on title of this post for a link to this book on

Wednesday, July 16, 2008

Due Process Challenge to ROGO Coming

In addition to the lawsuit challenging the constitutionality of Islamorada's "BPAS" ordinance, we are preparing a lawsuit challenging Monroe County's rate-of-development con game and confiscatory zoning regulations. This will consist of substantive due process claims against the County and the State, by several landowners. We do not contemplate a class action for several reasons, but primarily the complexities of dealing with a number of confiscatory (and, therefore, unconstitutional) regulations, state rules, and comprehensive plan provisions. If the regulations can be invalidated by a handful of landowners, it will become difficult for the government to continue applying them to other landowners.

We believe there is an excellent chance to remove the 255 permit/year growth cap, as well as the "ROGO" ordinance itself, and a good chance of removing the confiscatory zoning categories (NA, SS, SR, etc) unless the County or State decides to condemn all those properties and pay full Fair Market Value for them. In an eminent domain proceeding, the ROGO and confiscatory zoning regulations will be ignored (condemnation blight), and landowners will be paid as if their property is buildable.

Given the state of the economy, there is not a chance in Hell that Monroe County will condemn as much as a square foot of land. The State may have had the money to do so, but now that the Governor has decided to pay $1.7 Billion to buy Big Sugar, it is doubtful that the State will initiate eminent domain proceedings in the Keys -- at least in the near future.

It is sad that thousands of landowners "voluntarily" sold their Keys property to the State over the past 15 years. But, as then-Chief Judge Schwartz, of the Third District Court of Appeal, reminded us several years ago, "the courts do not exist to save people from the use of their pens." Maybe someone will think of a way to unwind some of those sales....

Existing and potential clients should call me or Andy Tobin to talk about the differences between invalidation and "taking" relief, and the specific application of these principles to their individual properties.

Wednesday, July 2, 2008

No-Use Zoning Held Unconstitutional on SDP Grounds

On July 1, 2008, the Supreme Court of Wisconsin (yes, the ultra-liberal court that decided Just v. Marinette County in 1972) ruled that when a land use district has no "as-of-right" uses, said regulation is unconstitutional on substantive due process grounds. (Think Lochner v New York, 198 US 45 (1908).) Click on the title of this post to view and download a copy of the opinion in Town of Rhine v. Bizzell, et al., 2008 WI 76, from the Wisconsin Supreme Court's website.

Sound familiar, Keys landowners? Do I hear "Tier One?" --- "red-flag wetlands?" --- Offshore islands, anyone? It's long past time to start challenging Monroe County's (and its municipalities') confiscatory land "lack-of-use" regulations, starting with the bogus "rate-of-development caps," and working our way through the "tier system" and the local wetland regulations. Oh, and there are no statutes of limitation on constitutional challenges to ordinances or statutes. The ordinance in Wisconsin had been in effect over 20 years before Bizzell, et al., took it down.

Thanks to Pacific Legal Foundation for the heads-up on this positive development.

Monday, June 30, 2008

Oral Arguments in Collins and Shands Taking Cases

This morning, the Third District Court of Appeal -- sitting in Key West -- heard oral arguments in the appeals of Collins v. Monroe County & the State of Florida, and Shands v. City of Marathon. Both cases were dismissed last year -- by freshman Circuit Judge David Audlin -- on grounds that defied common sense. The panel, consisting of Chief Judge David Gersten and District Judges Richard Suarez and Angel Cortinas, had numerous questions for the attorneys and, on the whole, appeared concerned with the governments' theories of the two cases. Judge Suarez described the governments' explanation of the Beneficial Use Determination (BUD) procedure as a "gotcha," while Judge Cortinas opined that the BUD process simply reinstates a landowner's right to sue for a "facial taking," even after the 4-year Statute of Limitation has run. In the Shands case, counsel for the City of Marathon argued that this could go on for "a million" years. So what? The Judges agreed, as this is how the ordinance reads!

In my 40+ appearances before the Florida District Courts of Appeal (and seven before Federal Circuit Courts of Appeal), I have never seen such an engaged panel of judges. I usually leave oral arguments with no clue what the outcome will be. Today was different.

Saturday, June 14, 2008

Islamorada Rate-of-Development Ordinance Challenged as Unconstitutional on Due Proces Grounds

On May 27, 2008, we filed a regulatory taking and substantive due process Complaint against Islamorada, for an out-of-state landowner who owns a 4-acre, undeveloped parcel on the ocean, with (god-forbid!) trees. We have not served it yet, for several reasons (including a companion suit against the County that has not been filed yet). But, local reporter Robert Silk discovered the Complaint three days ago and it will probably be in the newspaper by Wednesday.

Robert Silk characterized this latest action as a "full-blown attack" on the Village's Rate-of-Development ("ROD") ordinance (local name = BPAS), and he is correct. Four years ago, the Massachusetts Supreme Court held an ROD ordinance unconstitutional (813 NE 2d 843). The town of Hadley had enacted an ROD due to a (theoretical or real, it matters not) infrastructure deficiency (think "hurricane evacuation"). Fifteen years later, said "deficiency" still existed and the supreme court declared the ROD ordinance unconstitutional. I believe that somewhere in the neighborhood of 30 to 40 Massachusetts towns have since lost similar challenges to their ROD ordinances. (This was a real popular gimmick 15-20 years ago.)

The Florida Keys have been under majoritarian rule for the past twenty years, and the owners of undeveloped land, especially owners who do not vote in the Keys, have no worse enemy than the "got-miner," "no-growth," local voters (and their elected Commissioners) who are solely concerned with maintaining the highest possible market values for their HOMES in the Keys. PREVENTING new construction is what these HOMEVOTERS believe will maintain the value of what is their only significant asset, or at least the largest portion of their net worth.

In 1787, in Federalist #10, James Madison warned the nation-to-be that majoritarian rule (he called it "faction") was the major evil the new Republic had to keep under control -- but he recognized that majorities have long been known to protect their financial interests by destroying the rights of the minority. In 1788, Madison -- then drafting the Bill of Rights to be enacted by the First Congress -- in a letter to Thomas Jefferson, said "the danger of oppression lies in the interested majorities of the people rather than in usurped acts of the government," and "where the power ... is in the many not in the few ... it is much more to be dreaded that the few will be sacrificed to the many."

Madison was correct. The problem is more severe today in small communities like ours, where the privileged Commissioners -- and their majoritarian HOMEVOTER supporters -- can literally drive the value of undeveloped property (owned by the voting minority) to zero. If you are in the minority, you cannot remove these HOMEVOTER ELECTED local officials, but you can:

(1) refuse to sell your land to the State or County, or to individuals seeking points, and
(2) sue them for Just Compensation (the Fair Market Value it would have with the maximum possible number of permits before they changed the regulations and prevented you from building) for the diminution of your property's value.

The Founding Fathers, pushed by Madison, put your right to sue the bastards in the Bill of Rights, because they knew this could happen to you. And, guess what, it has!

West-Richardson Post-Trial Activity

On June 2, 2008, 10 days after the verdicts came in on the West and Richardson parcels (on North Key Largo, where most landowners have not been able to disturb a stick since 1982), we filed a Motion for New Trial in the West case (the $5.06 million verdict). We received the State's response on June 13, 2008 -- strongly suggesting that our motion be denied. It is likely that the Judge will rule on our motion fairly quickly, and we will post that decision when we receive it.

The State's representatives have made it clear all along that the State intends to appeal any verdicts in this case. The obvious reason is that the State does not want to have to pay Fair Market Value all of a sudden, when it has been stealing Keys' landowners' properties for a miniscule fraction of their value for over 15 years. Come to think of it, the County falls into that category as well.

The best advice we can give to Keys' landowners at this time is "don't sell your undeveloped Key's property to anyone "-- not the State, not the County, and not to individuals who want the property for "points" -- unless you are being offered the Fair Market Value you would get if the property had a building permit (or more than one, if it is acreage and large enough to support several homes or businesses).

Thursday, May 22, 2008

West-Richardson Verdicts In

About two hours ago, a Florida Keys jury rendered a pair of verdicts in the "condemnation blight" eminent domain cases of Florida DEP v West, et al., and Florida DEP v. Richardson, et al., for the taking of properties on North Key Largo -- where no development, whatsoever, has been allowed since February 9, 1982. For the West parcel, comprised of 22.4 acres of upland (about 40% of being mangroves and the rest hardwood hammock) and 4.4 acres of submerged land, the jury's verdict was $5,060,000. For the Richardson parcel, comprised of 4.3 acres of upland (about 1.5 acres of salt marsh and buttonwood -- wetlands -- would have been buildable in 1982) and .92 acre of submerged land, the verdict was $450,000.

These actions were initiated by the State in 1995, as "slow-take" eminent domain proceedings. Mr. Tobin and I took over representation of the landowners in 1996, and immediately filed a condemnation blight-based counterclaim for inverse condemnation. The case went nowhere until the State converted it to a "quick-take" in 2004, and acquired title to the West property for $550,000, and the Richardson property for $80,000. Today's verdicts, based on the 2004 taking dates, were 820% (West) and 462.5% (Richardson) greater than the amounts paid in 2004.

I would be remiss if I didn't acknowledge we sought substantially more than what the jury awarded on the West property -- $8.4 million -- but the jurors apparently did not believe our proposed multifamily (condominium) development scenario would have been marketable in 1982. The 1982 market was not something they were supposed to consider (the sale was in 2004), but it appears they did. The key to this case is the trial court's April 2007 Condemnation Blight Order, that you can read by clicking on the caption of this post.

The State has indicated it plans to appeal the Condemnation Blight Order, and it probably will. We hope to get an opinion from the Third DCA, or from the Florida Supreme Court, affirming the blight order, so we will have a binding precedent that will govern all of our pending and future inverse condemnation cases throughout the Florida Keys.

Thursday, May 15, 2008

May 2008 Litigation Updates

There has not been a post on this Blog since mid-March, when we were headed into the 22 BUD hearings. The BUD hearings took place in March, but more on that later). The Third DCA struck Monroe County's Answer Brief in the Collins appeal, and the County filed an amended brief. Mr. Tobin and I also spent a lot of time preparing for a week-long trial in Florida DEP v. West, et al., a "condemnation blight" North Key Largo case the State filed 13 years ago.

The West trial starts May 19th at the Plantation Key courthouse. One reason it took so long to get to trial was our 1996 counterclaim for inverse condemnation, based on condemnation blight. We contended that the moratoria imposed on North Key Largo, starting on February 9, 1982, had "frozen" the Landowners' rights to develop the subject property. Eventually, the State "took" the property in 2004, and we converted our counterclaim into a Motion in Limine. Judge Garcia entered his now-famous condemnation blight order last year. The only thing left to be done is the jury trial on compensation, using the 1982 land development regulations as the basis for appraisal. In 2004 the State deposited $550,000 and $80,000 into the registry of the court in order to take title of the West and Richardson properties.

"Condemnation Blight" was not restricted to North Key Largo. It applies to most of the Florida Keys. The State has vowed to appeal Judge Garcia's decision and, assuming it does and we win, we can start applying the concept throughout the Florida Keys.

Sunday, March 16, 2008

Court Dismisses Regulatory Taking Claim -- Ignores Ripeness Requirement

On March 10, 2008, 16th Circuit Court Judge Garcia dismissed Geneva Sutton's regulatory taking case against Monroe County, on a motion to dismiss, accepting the County's argument that the availability of a "super-variance" (the County's "Beneficial Use Determination" process) is irrelevant to the U.S. Supreme Court's ripeness doctrine. First espoused in Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), Williamson County "ripeness" was recently re-visited in Palazzolo v. Rhode Island, 533 U.S. 606 (2001), where the Supreme Court held, at 533 U.S. 620-21:

"… a landowner may not establish a taking before a land-use authority has the opportunity, using its own reasonable procedures, to decide and explain the reach of a challenged regulation. Under our ripeness rules a takings claim based on a law or regulation which is alleged to go too far in burdening property depends upon the landowner’s first having followed reasonable and necessary steps to allow regulatory agencies to exercise their full discretion in considering development plans for the property, including the opportunity to grant any variances or waivers allowed by law ..."

No final judgment of dismissal has been entered yet, so the case is not yet "ripe" for appeal. In keeping with the spirit of the Court's order (denying our Motion for Reconsideration), perhaps we should file our appeal as quickly as possible -- without waiting for finality. Frankly, if we can't reverse this decision in our sleep, Andy and I should retire and go play shuffleboard.

Friday, March 7, 2008

23 Beneficial Use Determinations set for Hearing

There is a good chance the 23 initial "Group Two" Beneficial Use Determination ("BUD") petitioners -- whose petitions were filed in October 2005 -- will be heard by State Division of Administrative Hearings ("DOAH") Administrative Law Judge ("ALJ") Larry Sartin on March 18-21, 2008, at the State Office Building in Marathon (Room 104). ALJ Sartin, who also hears Monroe County Code Enforcement proceedings, is a "contract special master" under the Monroe County Code (i.e., this is not a state administrative hearing).

While it has taken 2-1/2 years to get these BUD petitions heard, the Group One BUD Petitioners (Collins, et al.) filed their petitions in January 1997 and they were heard in December 2000 -- a 4-year delay. The "special master" was an attorney who also was employed by Monroe County, and he took so long to write the "recommended orders" that the County Commission did not act on them until 2002 and 2004. ALJ Larry Sartin is a professional, and we would lay odds that his recommended orders will be almost instantaneous (in Keys' time).

Monroe County has not been overly enthusiastic about scheduling these BUD hearings, but in January 2008 Andy Tobin and I made it clear that, if the petitions were not heard in February or March 2008, we would seek a Writ of Mandamus from a Circuit Court judge. So the BUD process goes -- grudgingly -- on.

You should be aware that Monroe County has proposed an amended Beneficial Use Determination procedure that would make this process almost impossible. Most of the initial 23 Group Two BUD petitioners, and a half-dozen later petitioners, have challenged that ordinance. A DOAH hearing on that challenge is scheduled for June 2008 in Key West.

There's more. Keep tuned into this blog site for announcements of Due Process challenges to Monroe County's Comprehensive Plan, Rate-of-Development Ordinance ("ROGO"), and BUD process. Here I go again, telegraphing our plans to the enemy!

Thursday, January 31, 2008

West-Richardson Condemnation Trial to Feature Condemnation Blight Defense

We are gearing up for a May 2008 trial in the North Key Largo condemnation blight case, State of Florida v. West, et al. We originally responded to the State's condemnation complaint with an inverse condemnation counterclaim, alleging the State and County had created a "condemnation blight" situation on North Key Largo in 1982. After the State exercised a quick-take in 2004, it gave up the right to "walk away" from the condemnation if it didn't like the price. We moved for a pre-trial order on condemnation blight, which was granted in April 2007. (Click on the link above to view the Order and a chronology of the case.)

On January 18, 2008, in a 3-hour hearing, the State tried to convert our condemnation blight claim -- which requires valuing the property as of the 2004 quick-take date (when title passed to the State), but valuing it as if the 1982 regulations were still in place and the blight never existed -- into a de-facto taking claim. In a de-facto taking, where the owner is actually ousted from the property, the property is valued as of the date of the ouster. In this case, that would have been February 9, 1982. Then interest is added on for the 28-year "delay" in payment. The Court rejected that argument. The appraisers will calculate Fair Market Value as of the "date of taking" in 2004, and as if the regulatory environment was the same as it was on February 8, 1982. They will also assume that the possibilities of rezoning will be as it was in 1982, not as it was in 2004.

This is a significant case for the owners of undeveloped property in the Florida Keys. Although the North Key Largo blight is very easy to prove, and the State's heavy hand easy to demonstrate, there is a blight in existence throughout the Keys. Landowners need to know that they can demand much higher prices for their unbuildable land than the paltry sums the State and County are offering.