Monday, December 7, 2009

Is the State Conceding its "Condemnation Blight" Battle in the Florida Keys?

Last Wednesday, December 2, 2009, the Third District Court of Appeal denied the State of Florida's Motions for Rehearing & Conflict Certification in the "condemnation blight" case, Florida DEP v. West, et al. (original opinion affirming trial court), Case No. 3D08-3185. Two days later, on December 4, 2009, the State's trial/appellate counsel asked us to pick a date in January for the State to write the checks in this case.

This suggests the State decided not to seek discretionary review from the Florida Supreme Court -- a wiser decision than their last one in Collins v. Monroe County & the State of Florida. But, in Collins, the State and County did not face the prospect of incurring almost $2,000 per day in interest costs, so they could waste the landowners' time and money at will.

For those considering a "condemnation blight" attack on value-reducing land development regulations, consider the following. The State deposited $550,000 for Parcel 1 and $80,000 for Parcel 7, as its "good faith" fair market value estimates, in April 2004. The 2008 jury verdicts were $5,060,000 (Parcel 1) and $450,000 (Parcel 7) -- based on the April 2004 real estate market. These verdicts were 9.2 times (820% over) and 5.625 times (462.5% over) the 2004 "good-faith" estimates.

The October 8, 2008, judgments included interest from 2004, bringing the just compensation values to $6,908,114 and $599,142, respectively, or $7,507,256. Presuming the case can be resolved by January 15, 2010, the State's appeal will add $682,398 in additional interest to the landowners' awards -- bringing their compensation up to $8,189,654, or 13 times the State's 2004 "good-faith" estimates (or, if you like your numbers inverted, the good-faith estimates were only 7.7% of the condemnation award, with interest).

Monday, November 30, 2009

Confiscatory Land Use Regulations are Unconstitutional in Florida: It is Time For the Kill

To the best of our knowledge, no local government in Florida -- other than Monroe County and its municipalities -- has ever been able to maintain confiscatory land development ("zoning") regulations. In 1984, the Florida Supreme Court held, in Dade County v. National Bulk Carriers, 450 So. 2d 213, 216 (Fla. 1984) that "if a zoning ordinance is confiscatory, the relief available is a judicial determination that the ordinance is unenforceable and must be stricken."

Government lawyers are wont to say that National Bulk Carriers was overruled, sub silentio, by the Supreme Court in First English Evangelical Church v. Los Angeles County, 482 U.S. 304 (1987), but that does not seem to be the case. In Joint Ventures v. FDOT, 563 So. 2d 162 (Fla 1990), a post-First English Florida Supreme Court held unconstitutional a statute that allowed the FDOT to "freeze" all development, for up to five years, and for a second five years if it wished, by recording a "reservation map" in the county records.

The 1990 supreme court invalidated Florida's "reservation map" statute, on Due Process grounds, after comparing its effect to the "condemnation blight" case of Bd. of Commissioners v. Tallahassee Bank, 1o8 So. 2d 74, 86 (Fla 1st DCA 1958), writ quashed, 116 So. 2d 762 (Fla 1959), stating "We perceive no valid distinction between "freezing" property in this fashion and deliberately attempting to depress land values in anticipation of eminent domain proceedings. Such action has been consistently prohibited."

In Joint Ventures, the supreme court sealed the fate of the Florida Keys' "Beneficial Use Determination" ("BUD") ordinances, when responding to FDOT's argument that "the property owner can always sue in inverse condemnation," as follows.
DOT contends that Joint Ventures' right to seek compensation through inverse condemnation cures the statute's failure to expressly provide for compensation. We disagree. ... [T]hat remedy is not equivalent to a property owner's remedy under the doctrine of eminent domain. Inverse condemnation affords the affected property owner an after-the-fact remedy, when there has already been a "taking" by regulation, and it is not a substitute for eminent domain protection facilitated by chapters 73 and 74 [Fla. Stat.]

The property owner who must resort to inverse condemnation is not on equal footing with an owner whose land is "taken" through formal condemnation proceedings. The former has the burden of seeking compensation, must initiate the inverse condemnation suit, and must finance the costs of litigation without the procedural protections afforded the condemnee.
In Joint Ventures (1990), as in National Bulk Carriers (1984), the Florida Supreme Court held the "reservation map" statute unconstitutional on Due Process grounds.

Fast forward to today. If it were not for the Keys' governments' "beneficial use" ordinances, many of these local land use regulations would have been declared unconstitutional 23 years ago. But let's take a look at those ordinances in the context of National Bulk Carriers and Joint Ventures -- the law in Florida.
  • Not one of the Keys' BUD ordinances provides for the acquisition of a landowner's property by the exercise of eminent domain, if the property has been rendered unbuildable by the local government's zoning regulations. A first-year law student could see this is a Due Process violation that renders the underlying confiscatory regulations unconstitutional.
  • Monroe County recently raised the "application fee" for a Beneficial Use Determination to almost $5,000. This is reminiscent of the $2 "poll tax" cases of the '60's. Is it remotely possible that a local government can assess the owners of land within its boundaries a "poll tax" of $5,000? If the government cannot assess a $2 fee for the right to vote, it cannot assess a $5,000 fee for the right to Just Compensation. Or any fee, for that matter.
There is a solution to this madness, and we are about to undertake it. We will soon file an action in the United States District Court for the Southern District of Florida, on behalf of several non-resident owners of Florida Keys property -- under the Federal court's "diversity jurisdiction" -- against the local governments and certain Florida state officials, to invalidate major portions of the Florida Keys' local government comprehensive plans and land development regulations, on Due Process grounds and Florida law.

Postscript: This situation reminds me of Pogo, who would say "we have met the enemy, and it is us." The reason the Florida Keys is up to its neck in "just compensation" liabilities is the classic tyranny of the majority problem. The people who own developed property in the Keys, and vote there, simply do not want anyone else to build anything within their driving radius. These cluckheads, who elect like-minded cluckheads to the County Commission and municipal Councils, have not yet figured out that they will be paying the bills for this fiasco for decades to come.

Tuesday, November 3, 2009

Has the Tide Turned?

Since 1986, the Florida Keys' confiscatory land use regulations have been imposed only on owners of undeveloped land. Two-thirds of those landowners reside outside the Florida Keys. They have no right to vote on the "got-miners" choices for the County Commission. Since the got-miners' "rate-of-growth" ordinance was imposed on the Keys in 1992, vacant landowners have been selling their property to the government at rock-bottom prices that rarely reached 15% of Fair Market Value.

In 1996, Andy Tobin and I sent Voice of Reason newsletters to just over 10,000 owners of undeveloped Keys' properties. Today there are only 4,000 such owners. The Keys' rate-of-growth ordinances have limited development to under 250 building permits/year since 1992 -- or less than 3,750 dwelling units in 17 years. This suggests about 2,250 parcels have been sold to government at unfair prices.

Now that the Florida DEP v. West, et al., decision has been released by the 3d District Court of Appeal, perhaps the remaining 4,000 owners of undeveloped Keys' land will realize that the State has been acquiring Keys' property -- for 17 years -- for about 10% of Fair Market Value. The 3d District Court of Appeal will issue its "mandate" on the West decision in two days (November 5th), and we assume the State is not dumb enough to lose another half-million dollars in interest on a high-risk petition for "discretionary review" by the Florida Supreme Court (only 11% are accepted for "review;" substantially fewer actually result in a reversal).

[This post replaces an earlier post.]

Wednesday, October 21, 2009

Landowners' Condemnation Blight Judgments Affirmed

Today, Florida's Third District Court of Appeal affirmed the trial court's judgments in Florida DEP v. West, et al, awarding nearly ten times the State's "good-faith" deposits when it condemned two North Key Largo properties in 2004. The trial (and chief) judge, Luis Garcia, should be pleased with his decision to require the jury to consider the "highest and best use" of these properties as of February 8, 1982 -- the last day they were "buildable" -- but valued in the 2004 real estate market.

Judge Garcia found, on the testimony of two former County Commissioners from the early 1980's, and from the voluminous paper trail, that Monroe County was made an "offer it couldn't refuse" in 1982, and again in 1986, and so on until the present day. Former Governor Bob Graham got his conservation land back in '82 ... but these landowners have yet to be paid, in 2009. Though the State DEP could seek "discretionary review" from the Florida Supreme Court, the odds of getting such a review are slim, and the State is running up interest to the tune of $1,468 per day. As of this date, the State's appeal has added $556,247 to the Landowners' compensation (at 11%/year, they should appeal forever).

All in all, this was a good day for those Florida Keys' landowners who have rebuffed the governments' 10-cents-on-the-dollar offers for all these years. For more details, see the West-Freeman section of my website.

(Edited 10/22/2009 to include interest information.)

Thursday, October 8, 2009

It Could Be a Busy 4th Quarter

After three weeks away from the pressure of brief-writing -- not to mention the stress of moving our pending regulatory taking and due process lawsuits -- it is a bit easier to cope. I did spend some of that downtime (at least an hour) thinking about what can be done to bring the Keys' land use regulations in line with those of a civilized society. Like the South of France. Not likely, that.

That raises a question: what civilized society would we like to emulate? California? There's a basket case, where affordable housing exactions are killing potential housing projects, and the state budget is a joke. How about Miami, Naples, or Fort Lauderdale? They have too much of everything, and the high vacancy rates to go with it.

Has anyone else noticed that Florida local governments (including the Keys) spent taxpayers' money like drunken sailors in the 2001-06 run-up? And now they're stuck with overpaid administrators and pension obligations that they will never be able to meet. OK, there's a goal.

First, fire half the County staff, starting with those who draw the largest paychecks. I challenge anyone to explain why we need a County Administrator when we have a County Commission that consists of five geniuses, all of whom are former (or future, because they are so smart) Nobel Prize winners. We could also do away with the County Attorney position, as all five Commissioners are more versed in the law than any attorney could possibly be. And the entire planning department could be let go, as there is nothing left to plan.

In the Keys, the City of Marathon cannot give away its building permits. The "village" of Islamorada was (correctly, I might add) deemed "charm-less" by United States District Judge James Lawrence King, and it is being sued by its former mayor, and a bunch of other people, over its sewer impact fees. Key West is, well, Key West. Monroe County may well be the only county in Florida where the population decreased over the 2000-2010 decade. Trust me, we will not get a merit badge for that statistic.

So ... are things good in the Keys? No. We have had several years of over-building, in large part because the State and County superseded the market, so every person who could, built a house. We now have a queue as long as my arm, of people who definitely do NOT want to build here. (The reason people wanted to build here was that "it was difficult.") We have had an artificial market here for 17 years, and it finally folded. Do we have a problem? Yes.

Do we need to change the regulatory climate in the Keys? Yes.

Tuesday, September 29, 2009

On Vacation

Just a note to let you know Rana and I have been traveling in Italy and France since September 17th. We spent our first week in Venice, Italy, where Rana attended an oceanographic conference. At the moment, we are visiting with an former colleague from graduate school days, Stanley Pons, in the Italian Maritime Alps. We are in a perched, very old, village (Corte) about an hour from the Mediteranean coast, and about two hours from Nice, France. (Our hosts also have dsl internet access and a WiFi network in their ancient, stone, summer home.) We expect to be home on October 2nd, and will be back to work by October 5th. Ciao!

Wednesday, September 9, 2009

Nollan-Dolan Exactions May See More Play

Since 1976, the State of Florida and the Monroe County (Florida Keys) Commission have imposed ever-increasing restrictions on the use of Florida Keys property -- using regulatory authority to confiscate private property without paying Just Compensation -- on the fuzzy theory that this will somehow better the universe (at no cost to the State and County taxpayers). The major shift took place on September 15, 1986, when the State "approved" a confiscatory comprehensive plan (that was written by the State) that prohibited the development of thousands of legally-platted lots within the Florida Keys, and downzoned thousands more.

In 1987 and 1994, the Supreme Court issued two regulatory taking opinions that did little more than muddy the waters. The 1987 decision, Nollan v. California Coastal Commission, 483 US 825, stemmed from a request for a building permit to rebuild the Nollans' oceanfront property with a larger residence. The California Coastal Commission acquiesced on the condition that the Nollans dedicate a portion of their property as a "viewing easement," that would allow passers-by to see the ocean from the street in front of the Nollans' home. Though many landowners had caved in to the Coastal Commission's demands, the Nollans sued, claiming the easement was an unconstitutional exaction. The Supreme Court agreed, explaining that a permit "condition" must be related to the "impact" of the development approved by said permit. In Nollan, the Supreme Court could not see a connection between the enlargement of the Nollan's home, and the need for passers-by to see the ocean.

In their 1994 decision. Dolan v City of Tigard, 512 U.S. 374, the Supreme Court supplemented the Nollan "connection," with a Dolan "proportionality" requirement for exactions imposed on private property owners. The Dolan decision has always been difficult to articulate. However, the 2006-2008 Utah Supreme Court has done a nice job explaining Dolan.

In B.A.M. Development v. Salt Lake County (I), 128 P. 3d 1161 (Utah 2006), and B.A.M. Development v. Salt Lake County (II), 196 P. 3d 601 (Utah 2008), the Utah Supreme Court reduced the Dolan "proportionality" requirement to dollars. In short, if the cost to the taxpayer exceeds the costs of its improvements (to the public), the taxpayer has been impermissibly overcharged. The difference is a Fifth Amendment taking.

Monday, August 17, 2009

The Key Deer Habitat Conservation Plan (HCP) is Invalid for Non-compliance with the Information Quality Act.

The Florida Key deer were listed as an endangered species in 1967. Since then, the herd has increased in numbers and the individual deer have become heavier and healthier today than they were in 1970. See Harveson, et al., "Impacts of urbanization on Florida Key deer behavior and population dynamics," 134 Biological Conservation 321-331 (2007), available at Harveson, et al., concluded Key deer prefer urbanized habitat on Big Pine Key, and that, in 2003, they were 10% heavier than those living in 1973.

On July 9, 2006, the State of Florida and Monroe County, which includes the Florida Keys, obtained an "incidental take permit" (ITP) from the U.S. Fish & Wildlife Service (USF&WS), ostensibly to protect the Key deer and the Playboy bunny (Sylvilagus palustris hefneri) from the ravages of human civilization. The only "scientific" basis for the ITP is an April 2006 Habitat Conservation Plan (HCP), prepared by Monroe County and the State of Florida.

The HCP relies solely on a chapter on population viability analysis (PVA), that the HCP's authors apparently lifted directly from Dr. Roel Lopez's 2001 Ph.D. dissertation, "Population Ecology of Florida Key Deer," Texas A&M University 2001. PVA calculations have become popular with conservation biologists, in part because there are at least five "canned" computer programs that will spit out apparent "results" without any regard for their accuracy -- or lack thereof.

The consensus amongst the mathematically capable is that one cannot obtain reliable extinction probabilities unless one has collected 5 to 10 years of data for every year to be projected; i.e., to project survival probabilities 50 years in the future, one would need 250 to 500 years of field data on the species in question. (The answer is "no," he did not have adequate data to calculate a PVA.) Dr. Lopez's 50- and 100-year PVA projections are subject to such huge error ranges that the means (or medians, as in the dissertation) are meaningless. Ergo, we have a classic nonsensical theory, "garbage in, garbage out," and a herd of bureaucrats depriving thousands of humans of their land and fortune (though the Key deer thrive in a developed environment).

Fortunately, an obscure federal statute prohibits the use of "garbage in, garbage out" theories in federal programs. Sec. 515(a) of Pub. L. 106-554 (2001), requires all Federal agencies to develop policies and procedures for "ensuring and maximizing the quality, objectivity, utility, and integrity of information" produced by said agencies.

Sec. 515(a) is known as the "Information Quality Act (IQA)," or by some agencies, the "Data Quality Act (DQA)." As OMB stated in its Federal Register Notice on the IQA regulations, 67 Fed. Reg. 8452-60 (Feb 22, 2002), when scientific information (data and analytical results) is relied on by a federal agency, "the original and supporting data shall be generated, and the analytical results shall be developed, using sound statistical and research methods."

Data and analytical results must be subjected to "peer review." In the scientific community, peer review involves submitting one's research to a respected scientific journal, where a scientist-editor will select (usually three) reviewers who regularly publish papers in the same field as the paper to be reviewed, to critically review and comment on the submission. Comments flow back and forth among the author, the editor, and the reviewers, and the paper is ultimately either published, published as modified, or rejected.

By now you have figured out that Ph.D. dissertations (including mine, in 1969) are not "peer reviewed," and do not qualify as "good science" under the 2001 Information Quality Act. Dr. Lopez purposely broke his dissertation into discrete chapters, each of which could stand on its own. He submitted individual chapters to scientific journals for peer review and, hopefully, publication. From 2002 through 2006, according to his curriculum vitae, Dr. Lopez was the senior author on five peer reviewed papers on Key deer, and a co-author on eight more. To his credit, NOT ONE of these 13 peer-reviewed papers (that's a lot!) mentions the PVA in his dissertation. I assume Dr. Lopez recognized the weaknesses in his computer-driven PVA, and published his strength, rather than canned PVA numbers.

So what's next? A reasonable move would be a petition to the USF&WS to rescind the 2006 Incidental Take Permit. The Service's IQA rules require it to respond to such a petition within 90 days after receipt of a petition from an "affected person." The rules also provide for an internal appeal, submitted within 21 days of the initial decision, if petitioner is not satisfied with the Service's response. The appeal must be completed within 60 days. If a petitioner is not satisfied with that decision, he or she may bring an action, against the Service, in federal court.

Monday, August 10, 2009

Casitas Municipal Water District Revisited

On May 10, 2009, I wrote about the Federal Circuit's decision in Casitas Municipal Water District v. United States, where a local water district has successfully litigated a 5th Amendment taking claim against the United States for diverting water to provide a better life for endangered steelhead trout (and their human and wild predators, one may assume). I noted that the time to file a certiorari petition with the Supreme Court had not run. Well, that time has come and gone, and no petition was filed. The Solicitor General obtained two extensions of time to file the petition. The second extension expired July 17, 2009, and no petition was filed by the United States.

It should come as no surprise that endangered species litigation usually goes to the critters (although sometimes the plaintiffs' motives are suspect, and the public wins). I cannot recollect a taking case where the critters' keepers had to pay just compensation, but I can tick off many where the landowner had to grin and bear it. (Casitas is a physical taking case, so watch out.)

Casitas widens the open door for our class action on Big Pine and No Name Keys, where the Key deer and the Lower Keys marsh rabbits have been handed the keys to more than 1,000 vacant properties by none other than Monroe County, Florida. This confiscatory behavior extends to the rest of the Florida Keys, albeit with a less Draconian flair.

The Federal Circuit's 2-to-1 decision rests on a "physical taking" theory (water, of course), and former Chief Judge Mayer hammered on that point in his "dissent-in-part." Casitas will probably be most helpful in those situations where landowners cannot use any of their property -- thus establishing a Lucas-style categorical (or per-se) taking. What Casitas adds to landowners' quivers is the ability to strip away the mystique that some see when they hear the words "endangered species."

Wednesday, August 5, 2009

Reverse Endangered Species Act Claim

In a comedic regulatory taking "defense," government counsel opposing our client's regulatory taking claim in Galleon Bay Corp. v. Monroe County & the State of Florida, are attempting to pin the tail on the federal government donkey, arguing "the US Fish & Wildlife Service made us do it."

Most land use attorneys know the USF&WS abhors "regulatory taking" issues because it doesn't have the money to buy "regulatory condemned" property and, if it were to do so, the F&WS would pay for the property out of the agency's regular budget. That means salaries and overhead suffer if a taking claim occurred. So ... what is going on here?

Apparently, the Monroe County Attorney, Suzanne Hutton, and Florida's Attorney General (and gubernatorial candidate), Bill McCollum, never got it. We have been served with a motion to dismiss, based on those politicians' nonsensical theory that the USF&WS "took" the subject property (on No Name Key) by "requiring" the County and State to apply for an Incidental Take Permit ("ITP") for the widening and fencing of US-1 on Big Pine Key, in Monroe County, Florida (the Florida Keys).

Just to bring everyone up to speed, the Endangered Species Act (ESA, adopted in Richard Nixon's administration) places burdens on government, not private sector, activities that affect listed species. Private development activities are not subject to the ESA, but landowners can apply for an ITP if they are concerned about the survival of an endangered species after their project has been completed.

As no landowner is required to apply for an Incidental Take Permit (ITP), no ITP is required for a private developer to build homes on No Name Key -- which already has nearly 60 homes -- or anywhere else, for that matter. Thus, there is no federal law or regulation that requires owners of Galleon Bay lots to obtain an ITP. Monroe County and the State took it upon themselves to obtain an ITP for the hundreds of vacant lot owners on Big Pine and No Name Keys, for the sole purpose of acquiring those parcels at fire-sale prices.

Friday, July 17, 2009

Government Denied Review by Florida Supreme Court in Collins v Monroe County

Yesterday, the Florida Supreme Court denied the governments' petition for discretionary review in Collins, et al v. Monroe County & the State of Florida, 999 So. 2d 709 (2008), rev. denied (Fla. 7/16/2009). The governments' argument -- that Monroe County's Beneficial Use Determination administrative procedure did not trump prior Florida ripeness decisions of the 1st and 4th DCAs -- was without merit. The supreme court saw no conflict between the 3rd DCA's decision in Collins (BUD ripens) and the ripeness decisions in jurisdictions with no BUD (or similar) administrative process.

As Florida's "discretionary review" process is not an "appeal," the 90-day clock for appealing to the United States Supreme Court ran out on May 20, 2009.

The denial of review was rendered only 66 days after the last brief was filed -- which is 26 days quicker that the 92-day average for all review denials in the past 12 months. The result was hardly in doubt. Only 11% of 9,874 petitions for discretionary review were granted by the Florida Supreme Court in the 10 year period 1990-99, and there is no reason to believe anything has changed since the 1990's. If a horse in the Kentucky Derby had an 89% probability of success, a lot of people would bet on it. (Or maybe not, because the payout would be so low.)

As an aside, we note that the supreme court also awarded attorneys' fees to the plaintiffs (landowners).

Sunday, July 12, 2009

They're Taking our Kodachrome Away

After a 74-year run, Kodak has decided to stop producing Kodachrome film. The only remaining processor of Kodachrome has announced it will process the film until the end of 2010. For me, Kodachrome is the benchmark upon which all color film -- and digital -- images will be measured. (Click here for a more detailed analysis of the Kodachrome phenomenon.)

Kodachromes, as the song goes, do not fade (or at least do not fade after 74 years), as do the other (E-6) "chromes." I have Kodachrome aerial photos of my oil spill adventures in the 1970's, as well as hundreds of Kodachromes that refuse to fade while their E-6 counterparts have faded into pastels of their former selves.

I have been stashing rolls of Kodachrome for the past year, anticipating this day, and hope to shoot some more photographs in our National Parks before time runs out. So, if you begin to see gaps in my blog coverages, they are most likely related to the December 2010 end of Kodachrome.

Sunday, June 28, 2009

Oral argument in Condemnation Blight case

Oral argument was had Monday, June 22nd, in Key West, before Florida's Third District Court of Appeal, in the Condemnation Blight case of Florida DEP v. West, et al., that resulted in a $6.9 million judgment for two parcels that the state "quick-took" for $630,000 in 2004. (Details on The panel included Chief Judge Gersten and District Judges Suarez and Rothenberg. Judges Gersten and Suarez were on the panels in Collins v. Monroe County and Shands v City of Marathon one year ago (June 30, 2008). The Landowners prevailed in both Collins and Shands, and Judge Suarez signed both opinions.

It was obvious that Judge Rothenberg had read the briefs. She came out of the box at the State's attorney (for whom this was the first appeal he had ever briefed or argued) when he presented his theory that "this is not 'condemnation blight,' but was a regulatory taking in 1982." Judge Rothenberg punctured the State's balloon when she referred to the holding in Tahoe-Sierra -- that moratoria are "temporary takings," and that temporary takings do not accrue until they end. So much for the State's statute of limitations theory.

The West case is a superb example of condemnation blight. We thank Gideon Kanner for his life's work in this area. Most Florida Keys condemnation cases have been "lightly defended" by mainland Florida eminent domain lawyers (with one major exception, Doug Halsey), who had no clue what happened from 1982 forward. However, as Senior District Judge Alan Schwartz said in one of our oral arguments several years ago, "the courts don't exist to protect people from the use of their pens." We realize most owners of condemned Florida Keys properties could have used the condemnation blight strategy we used in this case, but their attorneys were unfamiliar with the facts on the ground.

Chief Judge Gersten asked both sides if they considered the State's theory of the case "fair." My response is obvious. The State's response was "I will not say this is fair, but we are governed by laws."

One of those laws is the Fifth Amendment to the United States Constitution, and that "law" requires the government to act in a fair and equitable manner when it condemns property (or does anything else). Keep checking back to learn how this comes out. The Third District Court of Appeal releases its decisions on Wednesdays, at about 10:30 AM.

Monday, June 8, 2009

U.S. Supreme Court disqualifies W Va Supreme Court Justice on due process grounds

Today, in an astounding decision -- not because it was unexpected, but because all four "conservative" Justices dissented -- the Supreme Court reversed a West Virginia Supreme Court's decision because one Justice refused to recuse (disqualify) himself. See Caperton v. A. T. Massey Coal Co., Case No. 08-22 (U.S., June 8, 2009).

For those who missed the news coverage of this case, Caperton obtained a $50 million judgment against Massey. Massey appealed to the W. Va. Supreme Court. Meanwhile, one Brent Benjamin was challenging an incumbent Justice seeking re-election. Massey Coal's chairman, Don Blankenship, contributed $3 million to Mr. Benjamin's campaign. Mr. Benjamin was successful, and became Justice Benjamin. (Note added June 16: Only $1,000 went directly into Mr. Benjamin's campaign account, the other $2.999 million was spent on advertising on Mr. Benjamin's behalf.)

Caperton moved to disqualify Justice Benjamin, and the Justice refused to recuse himself. The supreme court reversed Caperton's $50 million judgment,on a 3-2 vote. One dissenter, Justice Starcher, wrote:
The majority opinion is morally wrong because it steals more than $60 million dollars from a man who was the victim of a deliberate, illegal scheme to destroy his business. The majority opinion is legally wrong because it uses erroneous legal reasoning to justify an immoral result.
The supreme court vacated its first effort and re-heard the case. Two Justices (including Starcher, J.) disqualified themselves. They were replaced by two trial court judges. The result was the same, 3-2 in favor of Massey. Three months later, Justice Benjamin released a 98-page concurring opinion that attempts to justify his refusal to disqualify himself.

The Supreme Court granted certiorari, and oral argument was held on March 3, 2009 -- just three months ago. The Court's swing-vote, Justice Kennedy, delivered the opinion, joined by Justices Stevens, Souter, Ginsburg, and Breyer. I've posted a link to the Court's opinions (Justices Roberts and Scalia filed dissenting opinions), and if you can read this you can read the opinions.

The dissents of Justices Roberts, Scalia, Thomas, and Alito are disturbing. While we are seeing a fair amount of conservative hand-wringing over Judge Sotomayor's nomination to the Supreme Court, we should not forget that "conservative" judges often side with the government -- except in land use cases, thank goodness. Judge Sotomayer would at least keep the balance when other (non land-use) Constitutional rights are at stake.

Suffice it to say that the Supreme Court's decision in Caperton v. Massey adds weight to the judicial disqualification process throughout the state and federal courts, in its renewed application of the Due Process Clause, in addition to statutory criteria, to support motions to disqualify judges.

Friday, May 22, 2009

Condemnation Blight Oral Argument Set

For those who can get to Key West on June 22, 2009, Florida's 3rd District Court of Appeal has scheduled oral arguments that day in Florida v. West, et al., in the new Key West courthouse. This is the 2008 "condemnation blight" decision that required the State to pay ten times its "good faith deposit," in 2004, for two parcels of land on North Key Largo that have been under a development moratorium since February 9, 1982!

Updated May 31, 2009. Please check our website,, to read the briefs before you make the trek to Key West. The State's Initial Brief is available, as is our Answer Brief, on the website. The State's Reply Brief is due on or before June 15, 2009.

Monday, May 11, 2009

Ms. Ahearn's $25 Million Eminent Domain Verdict

Gideon Kanner posted this four days ago, about a 101-year old landowner who may have gotten even with the local government. Then the Eminent Domain Law Blog picked it up last Friday, and it's just too good to pass up.

The landowner, 101-year old Ms. Ahearn, had been offered $25 million for her golf course property some 10 years ago, and the local government (Evergreen Park, Illinois) killed the deal by refusing to rezone the property. Then, as luck would have it, the town decided to acquire the property by eminent domain ... offering $5 million. The jury, however, after 30 minutes of deliberation, came back with $25 million -- the amount Ms. Ahearn would have received 10 years ago.

Now comes the difficult part. As in Florida, Illinois apparently allows the condemning authority to "walk away" if it doesn't like the jury verdict. It pays costs and attorneys' fees, but that doesn't do much for the landowner.

We have an analogy to Ms. Ahearn's case here in the Florida Keys -- Florida DEP v West, et al. The West case is pending in the Florida Third District Court of Appeals, after a jury came in at $5.06 million in an eminent domain proceeding where the State put up only $550,000. We represent the landowners in West, and are defending the appeal. But we have a leg up on Ms. Ahearn -- as the State "blinked" and filed a "quick-take" almost at the height of the real estate bubble in 2004. The State of Florida cannot "walk away" on this one.

The State of Florida filed the West condemnation proceeding in 1995, as a slow-take (like Ms. Ahearn's in Illinois). We responded with a regulatory taking counterclaim, figuring the State would run like a scared rabbit if a jury came in at 10 times what the State was offering back then. At the least, the taking counterclaim could be pursued if the State decided to bail out of its slow-take. Fortunately, the State blinked in 2004, and we converted the counterclaim into a motion in-limine on condemnation blight.

Sunday, May 10, 2009

Federal Circuit Finds Fifth Amendment Taking by Endangered Species Act

In Casitas Mun. Water Dist. v. United States, 543 F.3d 1276 (2008), rehearing denied, 556 F.3d 1329 (Fed. Cir. 2009), the US Court of Appeals for the Federal Circuit reversed the Court of Federal Claims -- opinion at 76 Fed. Cl. 100 (2007) -- holding that an uncompensated taking under the Fifth Amendment has occurred.
... there is no doubt that the preservation of the habitat of an endangered species is for government and third party use -- the public -- which serves a public purpose. .... when the government forces Casitas to divert water away from the Robles-Casitas Canal to the fish ladder for the public purpose of protecting the West Coast Steelhead Trout, this is a governmental use of the water.
Every environmental NGO in the country filed amicus briefs in Casitas. Though I haven't read them all, it's just the same old song -- "endangered species are entitled to more Constitutional protection than are citizens of the United States." That just ain't so, and the Federal Circuit has so held.

This brings me to Monroe County's latest fiasco on Big Pine Key and No-Name Key. The County and the State of Florida teamed up to develop a BPK-NNK Habitat Conservation Plan to "protect" the endangered key deer and the Playboy marsh rabbits, that prohibits essentially all use of approximately 1,000 acres of undeveloped, privately-owned land. This confiscatory County/State HCP was submitted to the US Fish & Wildlife Service as part of an application for an Incidental Take Permit. Always happy to accept land donations, the USF&WS issued the ITP -- that recites verbatim the conditions in the County/State HCP.

The problem with this scenario is that the County and the State did not have any ownership interest in the land they donated to the F&WS to "save" the key deer and Playboy bunnies. Ooops? You bet! The only difference between the BPK-NNK HCP and Casitas Mun. Water District v. United States is that Casitas is a physical taking (because the water is physically taken from Casitas and given to the fish) and BPK-NNK is a regulatory taking.

Meanwhile, we have a class action lawsuit pending in state court (Lightner, et al. v. Monroe County and the State of Florida), alleging a regulatory taking of those 1,000 acres on BPK-NNK, that should benefit substantially from this excellent decision by the US Court of Appeals for the Federal Circuit.

As we see it, the County and State can rescind their confiscatory regulations and pay temporary taking damages to those who have sought development approvals since the regulations went into effect. Or they can pay out more than $200 million in compensation for a permanent taking of 1,000 acres on Big Pine Key and No-Name Key.

PS. The US Court of Federal Claims (CFC) has exclusive jurisdiction over all inverse condemnation claims -- in excess of $10,000 -- brought against the United States. The Federal Circuit Court of Appeals hears all appeals from the CFC. Yours truly has been admitted to practice before the CFC since 1985, and the Federal Circuit since 1990.

NOTE ADDED August 10, 2009. The U.S. Solicitor General (Elena Kagan) requested two extensions of time to file a petition for certiorari in Casitas Municipal Water District. The second extension ended July 17, 2009 -- 24 days ago -- and no petition has been docketed by the Supreme Court. Looks like the Casitas battle goes to the property owners.

Tuesday, May 5, 2009

Voice of Reason Recipients Getting the Message

Five weeks after mailing the latest Voice of Reason to every owner of Tier I land in unincorporated Monroe County, responses from all over the country have been strong. One-third of the affected landowners reside outside Florida; another third live in Florida but outside Monroe County; the other third reside in Monroe County.

We have been getting e-mails and telephone calls every day from landowners who have resisted the State's siren invitations to buy their land for pennies on the dollar. Almost without exception, these landowners have no clue what their property would be worth in a proper eminent domain proceeding. But ... these are individuals who have rejected State offers for years, and are willing to fight. The faint-hearted sold out long ago.

We continue to tell Keys landowners that they are opposing one of the United States' most intransigent enemies of landowners -- local governments that are captives of the homevoters that elect them.

If you have not received a Voice of Reason in the past six weeks, it is likely that the Monroe County Property Appraiser does not have your current address on file. You can resolve this by calling or writing the Property Appraiser to correct your mailing address. You will then receive the next Voice of Reason in the mail. That is because we use the Property Appraiser's database to build our mailing list. (To download the March 2009 issue, click on the title of this post.)

Wednesday, April 29, 2009

The Florida Keys Exclusionary Zoning System Needs to be Declared Unconstitutional

Professor Edward Ziegler, editor of Rathkopf's The Law of Zoning and Planning, has an article in the latest edition of The Urban Lawyer, where he makes the following observations.

Zoning almost by definition is exclusionary in nature, and this is, and has been, true even in many of America's major cities. .... Our regional problem today is that the strong arm of NIMBYism has turned the gentility of old "snob zoning" schemes into zoning schemes that perhaps can best be described as "hyper exclusion on steroids." ....

Typically, concerns about growth within a local community follow a certain political dynamic. .... NIMBYism at some point begins to dominate both the public's perception of future growth and the politics of the local planning and zoning process.

Eventually, anti-growth sentiment develops to the point where nearly everyone but the realtors' lobby has been turned into a BANANA (Build Absolutely Nothing Anywhere Near Anybody). Land use "activists" and civic-minded neighborhood organizations now emerge with the goal of promoting growth management and the "public interest" (often under the banners of "environmental protection" and "fighting urban sprawl") and pressure the city to enact increasingly intensive and burdensome zoning and growth management programs.
Sound familiar? Well, it should. Looking back over the past 25 years, we can see Professor Ziegler's "growth management nightmare" develop in the Florida Keys just as he described it. Since the early 1980's, Monroe County's elected officials have bent over backwards to play the BANANAs and NIMBYites games. First came massive downzonings in 1986, when thousands of platted subdivision lots were stripped of any right to build anything, and a 1-year moratorium was imposed on development on North Key Largo -- that is still in effect today, 22 years after that year ended!

Then, in 1992 the County, led by its since-disgraced top BANANA, Commissioner Jack London, rammed through a "Rate of Development" ordinance -- allegedly based on a hurricane evacuation infrastructure deficiency (US-1 needed to be widened) -- that was supposed to last no more than 10 years, or to 2002. Well, guess who proceeded to oppose all efforts to widen US-1 and build a new bridge over Jewfish Creek. You guessed it, the Monroe County Commission and its bosom buddies, the neighborhood NIMBY associations (who continue to steadfastly oppose anything that would improve hurricane evacuation times).

Professor Ziegler's article doesn't mention how one can remove the obstructive and value-reducing "growth management" plans put into place by the NIMBYs, BANANAs, and their elected lap-dogs. But we can suggest one. Convince a state or federal judge to follow the lead of the Massachusetts Supreme Court in Zuckerman v. Town of Hadley, 813 N.E. 2d 843 (MA 2004), and declare the Rate of Development system unconstitutional.

Tuesday, April 21, 2009

$4,500 Poll Tax Approved by Moron County Commissioners

One wonders what goes through the feeble minds of elected officials, not to mention their sycophantic in-house counsel. Two weeks ago, I noted that the Florida Keys' elected County Commissioners were entertaining their planners' proposed fee of $4,500 for a "Beneficial Use Determination," a/k/a "BUD." Well, they weren't embarrassed in the least. They adopted said $4,500 "poll tax" on April 15, 2009.

In other jurisdictions, similar statutes and ordinances are called "taking avoidance" procedures. Many communities are justifiably concerned that their land development regulations "go too far," placing the local taxpayers in a position where they will have to pony up millions of dollars when regulations go "too far." The more enlightened communities utilize their taking avoidance ordinances to back off on overly confiscatory regulations, and save the taxpayers a ton of money. The Florida Keys $4,500 fee will just cause more litigation. It is now being used to pay planners' salaries, instead of what it was originally intended to do -- save money.

On December 1, 2007, I reported on a good example of municipal incompetence on the part of the City of Half Moon Bay, California, when it got slammed with a $36.8 million inverse condemnation judgment as "payback" for its years of staunch opposition to a residential subdivision within the city limits. Nearly a year later, I reported, also on this blog, that Half Moon Bay and the landowner had reached a settlement. The City would allow the development of the property or, if the California Coastal Commission prevented same, it would pay the landowner $18,000,000.

Monroe County is headed for serious financial trouble, whether the County Commissioners know it or not, and this latest dumb move just digs the hole deeper. Property tax rates in this community are the lowest in the State of Florida, but that will not last long with these clowns in office.

Wednesday, April 15, 2009

Breaking the Back of Unconstitutional Rate-of-Development Ordinances in the Florida Keys

Enacted in 1992 as a "hurricane evacuation infrastructure deficiency" moratorium -- that would expire in 2002 -- every local government in the Florida Keys now has a permanent Rate-of-Development (ROD) ordinance. And those same governments have stalled, and openly opposed, the infrastructure improvements that were going to be completed by 2002. Of course, the got-miners oppose any and all infrastructure improvements, and the local governments gladly appease them. The hurricane evacuation rationale has morphed into a sewer infrastructure deficiency, a save-the-trees program, and an endangered species program, protecting endangered rats, snakes, Playboy bunny, and midget Virginia white-tailed deer (imported in the 1800's as food).

At some point these ROD ordinances must be unconstitutional as violative of Substantive Due Process. Recently, in Zuckerman v. Town of Hadley, 813 N.E. 2d 843 (Mass. 2004), the Massachusetts Supreme Court held that a ROD ordinance -- in effect for 15 years -- was no longer constitutional. Just imagine -- the Town of Hadley had done nothing to cure the "infrastructure deficiency" its ROD ordinance was supposed to alleviate. But it sure reduced development and the got-miners were quite happy.

Sound familiar? Of course. It happens all over the United States, in areas thought to be desirable by the people who live there, as well as those who would like to live there -- and can buy land there but cannot get a building permit. Once someone manages to own their piece of paradise, their highest priority becomes preventing anyone else from doing so.

For an excellent analysis of the problem, see William A. Fischel's "The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land Use Policies," Harvard Univ. Press (2001). The author is an economics professor at Dartmouth College, who previously published "Regulatory Takings: Law, Economics, and Politics," Harvard Univ. Press (1995).

Last year we filed two lawsuits challenging Florida Keys' ROD ordinances. The first one, Lightner et al. vs. Monroe County & the State of Florida, involves over 1,200 parcels of land on Big Pine and No Name Keys. The other, Evanoffs vs. the Village of Islamorada, targets that town's ROD ordinances. In the latter, the Circuit Court has agreed that the Complaint states a cause of action, and has asked the parties to schedule a trial at the earliest available opportunity. It would appear that we are on the right track.

Monday, April 6, 2009

If a $2 Poll Tax is Unconstitutional, Can a $4,500 Ripeness Fee be Constitutional?

I understand charging a fee for reviewing building plans -- or to process a Conditional Use or Special Exception -- but charging a $4,500 fee to request Just Compensation? The Monroe County Commission may think this is a terrific idea. Why, just think, a $4,500 "ripeness fee" might just keep a lot of those damn, rabble-rousing landowners from asking for "money" for their regulatory taken property.

On December 31, 2008, Florida's Third District Court of Appeal, once again, explained how the Florida Keys' unusual Beneficial Use Determination (BUD) process works. See Collins, et al. v. Monroe County, et al., 999 So. 2d 709 (Fla. 3rd DCA 2008) and Shands v. City of Marathon, 999 So. 2d 718 (Fla. 3rd DCA 2008). It is also worth noting that the New Jersey Supreme Court just upheld an almost identical BUD in OFP, LLC v. State of New Jersey, 930 A.2d 442 (NJ App 2007), affirmed, 963 A.2d 810 (NJ 2008). (So we are not alone anymore.)

In 1986, the State imposed a confiscatory zoning map on the Florida Keys. It downzoned at least 5,000 platted lots, making them unbuildable. Until First English in 1987, Florida's position was that confiscatory zoning ordinances were unconstitutional on Due Process grounds. See Dade County v National Bulk Carriers, 450 So.2d 213 (Fla. 1984) (Florida did not recognize a right to monetary compensation for regulatory takings by zoning ordinances.) In 1986, the State planning agency was staring at a major Due Process lawsuit that would have taken down its ComPlan in a heartbeat.

In 1985, along came Charles Siemon. He came up with the State's first (and only) "ripening" ordinance. The 1986 BUD gave the County Commission authority to waive any land use regulation that "took" property. The 1986 language was painfully unconstitutional, as it required the landowner to first "attempt" to sell the property for 40% of its pre-regulation Fair Market Value (FMV). If that failed, and the County declined to waive its regulation(s), the County would pay the landowner 40% of the pre-regulation FMV. Judge Richard Payne struck down both provisions in a regulatory taking lawsuit we filed in 1988. The 3rd DCA affirmed. See Monroe County v. Gonzalez, 593 So.2d 1143 (Fla. 3rd DCA 1992).

In 1990, we filed another regulatory taking lawsuit, this time against the City of Key West. See Key West v Berg, 655 So. 2d 196 (Fla. 3rd DCA), rev. denied, 663 So. 2d 629 (Fla. 1995). In 1994, a new Key West ComPlan included a reference to a not-yet-adopted BUD process. Judge Richard Payne agreed Berg did not have to exhaust a not-yet-written regulation, but the 3rd DCA reversed, asking, at oral argument, "why can't you just write the City a letter?" On remand, the City settled with Mr. Berg for $3.5 million.

In 1993, the State of Florida inserted the 1994 Key West BUD language -- which the State also wrote -- into Monroe County's new ComPlan (effective 1977). The County adopted implementing regulations in 1998, and the 1998 BUD ordinance remained in effect until 2008. A new -- but much less constitutional -- BUD ordinance went into effect last year.

The law is clear that a Florida Keys landowner -- who believes their land has been subjected to a regulatory taking -- must petition for a Beneficial Use Determination before his or her taking claim is "ripe." It is equally clear that the Statute of Limitation does not begin to run on a Florida Keys regulatory taking claim until the BUD determination has been rendered. This protects the landowner who is unaware of their claim, and prevents the local government from receiving windfalls when landowners fail to exercise their right to sue for a regulatory taking. It does not protect the government from claims the BUD process has become "futile" on a case-by-case basis.

Last I looked, the right to Just Compensation for a "taking" of property is enshrined in both the U.S. and Florida Constitutions -- just as is the Right to Vote. We don't allow governments to charge a fee for exercising the right to vote -- not a dollar, nor a penny -- even though it costs the government a boatload of money to buy the voting machines, print the ballots, and staff the polling places.

In 1997, Monroe County began charging a $500 fee for processing a BUD petition. Apparently nobody complained, so the fee began to creep up, first to $750, then to $1,300. We filed about 25 petitions the day before the increase to $1,300 went into effect in 2005. Now -- as you can see from the agenda item I posted on Google Docs -- the leeches in the planning department want to increase the fee to $4,490.

For at least the past two years, we have been considering filing a lawsuit to declare the BUD unconstitutional, on several grounds, and to declare the Florida Keys' confiscatory land use regulations unconstitutional on Due Process grounds. What the State and County planners keep forgetting is the holding in Joint Ventures v. Florida DOT, 563 So. 2d 622 (Fla. 1990). In Joint Ventures, the supreme court held a legislative act that precludes all development on a parcel of land, is unconstitutional on Due Process grounds, unless the landowner has a direct avenue to condemnation proceedings. The supreme court specifically stated that the right to bring an inverse condemnation proceeding, as FDOT argued, does not suffice. In the end, the FDOT land-freezing statute was declared unconstitutional on Due Process grounds. (Note the similarity to National Bulk Carriers, above.)

None of the 5 or 6 Florida Keys' BUD ordinances provide affected landowners with a right to a condemnation proceeding. All you get is a letter in the mail that includes an offer to buy the property at a price that is about 15% of what one would receive, on average, in a condemnation proceeding. And -- if you turn down or ignore the offer, the government is content to let you rot in Hell forever. That is not Just Compensation, and it violates Due Process big time.

As they say in the advertising business, watch this space.

Wednesday, March 25, 2009

3rd District Court of Appeal Denied Motions to Remand Beyer, McCole, and Sutton

Despite the fact that the City of Marathon agreed to the remand of Beyer v City of Marathon & the State of Florida, and the County's response to our remand motion in Sutton v. Monroe County was essentially "please make them write a Brief," the Florida 3rd District Court of Appeal denied our motions to remand Beyer, McCole v. City of Marathon, and Sutton in light of the Court's New Year's Eve decisions in Collins v. Monroe County and the State of Florida and Shands v. City of Marathon.

All three of these regulatory taking cases were dismissed on the same statute of limitation ground that was rejected by the same Court in Collins and Shands. The only opposition to our remand motions came in McCole, where the City raised an additional argument below and apparently thinks that argument might be enough to win. So, now we need to write three more Briefs, and have three more oral arguments. And the governments' private-sector lawyers will bill the taxpayers for more attorneys' fees.

Friday, March 20, 2009

Voice of Reason Sent to Every Owner of Undeveloped Tier I Property in Unincorporated Monroe County

Over the next few days, copies of our latest issue of The Voice of Reason should appear in the mailboxes of every owner of undeveloped, Tier I, property in unincorporated Monroe County. Even though we put this issue together a couple of months ago, we had to get it cleared by the Florida Bar as "advertising." The Bar's reviewer took issue with our use of words like "stealing" and "thieves," when referring to the governments of Florida and Monroe County. She suggested we were accusing government of criminal activities for which they should be tried and incarcerated. It hadn't crossed my mind yet, but sounds like a good idea to me!

So we toned down the rhetoric a notch, updated the story on page 4, and uploaded it to be printed and mailed -- by first-class mail. We are working on a modified version to be mailed to the owners of all undeveloped property in Islamorada and Marathon. Fortunately, now that we have been cleared by the Florida Bar with the current issue of The Voice of Reason, we don't have to submit future issues to the Bar for vetting.

Monday, March 2, 2009

Gov't Appeals Collins Decision to Florida Supreme Court

For those who are following the New Year's Eve regulatory taking decisions in Collins, et al. v Monroe County, et al., and Shands v. City of Marathon, let it be known that no stone will remain unturned. Friday, the gov't served notice that it was petitioning the Florida supreme court to review the Third DCA's Collins decision under its discretionary jurisdiction to hear whatever it takes an an interest in. These are uphill battles, but the gov't's notice suggests it has located an inconsistency between the Collins decision, and a decision of another District Court of Appeal.

The Monroe County Attorney's office requested permission, in January 2009, to file this petition for discretionary review. But I could not fathom, from its request to the County Commission, what it was relying on for its argument that the Collins decision "conflicts with the decisions of other Florida District Courts of Appeal." Perhaps the field of regulatory taking law is so far from what these gov't lawyers do on a day-to-day basis, they just don't understand the law.

Anyway, the discretionary review process is constrained by time and space limits. The gov't now has 10 days to serve its 10-page "jurisdictional brief." Then, we get 20 days (plus 5 days for mailing) to serve our response. There is no reply brief, and the gov't petitioners are limited to the words in the District Court of Appeal's opinion (no references to the record before the trial court are allowed). This is a tough one for the government.

Meanwhile, there is no automatic stay at this point. If the gov't wants the proceedings below to be stayed, it must get the District Court of Appeal to enter a stay order. Stay tuned. This is far from over.

Thursday, February 26, 2009

California Decision Finding Lucas "Categorical Taking" in 30-Year Moratorium. Sounds Familiar.

I downloaded the 49-page slip opinion in Monks v. City of Rancho Palos Verdes ("Monks II") after seeing it mentioned in the October 1, 2008, blog of Hawaii land use attorney Robert H. Thomas. It came back to me this week, when it was highlighted on the front page of the December 2008 issue of Gideon Kanner's newsletter, Just Compensation, with the exclamation:
"Will miracles never cease? The California Court of Appeal held that a city's moratorium forbidding all construction, and extending over a period of some 30 years, was a taking of property."

For those of us who consider California state and federal courts' interpretations of the U.S. Constitution something to be avoided, the tide seems to be changing out there. In December 2007, 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.

Now, in Monks v. City of Rancho Palos Verdes, 167 Cal. App. 4th 263, rev. denied, 2008 Cal. LEXIS 14670 (Cal. Dec. 17, 2008), on its second trip to the Court, an intermediate California Court of Appeal held (and the California Supreme Court declined to review) that a building moratorium that started in 1978 was a permanent, categorical taking (as in Lucas v South Carolina Coastal Council, 505 U.S. 1003 (1992)).

This is a well-analyzed opinion that uses Lucas reasoning to conclude that the City's 1978 ordinance imposing a moratorium on the construction of single-family homes in the "vicinity" where landslides had recently occurred. In the earlier trip to the appellate court, that court rejected the City's one-two defense of "it ain't ripe, and besides, the statute of limitations has run." Monks v. City of Rancho Palos Verdes (Feb. 23, 2005, nonpublished opinion B172698.) ("Monks I," quoted liberally in Monks II.)

The Monks II opinion focused on the following aspects of the Supreme Court's opinion in Lucas. The California court's synopsis can be boiled down as follows.

1. The Lucas court rejected the contention that Lucas's property retained some economically beneficial use just because he could go there to picnic, swim, camp in a tent, or live in a movable trailer. See 505 US at 1044 (Blackmun's dissent).

2. The Lucas court concluded that the findings of the state legislature were of "no import in deciding the taking issue." The Lucas court held "Any limitation so severe [as to deprive land of all economically beneficial use] cannot be mewly legislated or decreed (without compensation), but must inhere in the title itself, in the restrictions that background principles of the State's law of property and nuisance already place upon land ownership."

3. "The fact that a particular use has been long engaged in by similarly situated owners ordinarily imports a lack of any common-law prohibition.... So also does the fact that other landowners, similarly situated, are permitted to continue the use denied by the claimant. ... It seems unlikely that common-law principles would have prevented the erection of any habitable or productive improvements on [Lucas's] land; they rarely support prohibition of the 'essential use' of land...." Lucas, 505 US at 1030-31 (majority opinion of Scalia, J.); 505 US at 1052, fn 15 , and 1052-55 (Blackmun's dissent).

4. The government bears the burden of proving that the property owner's intended use is not allowed under state law. " win its case South Carolina must do more than proffer the legislature's declaration that the uses Lucas desires are inconsistent with the public interest, or the conclusory assertion that they violate a common-law maxim that ... 'one must so use his rights as not to infringe on the rights of others.' ... Instead, as it would be required to do if it sought to restrain Lucas in a common-law action for public nuisance, South Carolina must identify background principles of nuisance and property law that prohibit the uses he now intends in the circumstances in which the property is presently found. Only on this showing can the State fairly claim that, in proscribing all such beneficial uses, the Beachfront Management Act is taking nothing." Lucas, 505 US at 1031-32.

Just to bring this home, the State of Florida or the local government would have to show that it could have enjoined the building of single-family homes -- on lots zoned for single-family homes -- in the Florida Keys, under the common law in existence before Florida became a state. No statutes or ordinances enacted after that date would be relevant. If it cannot do that, the prohibition on construction of single-family homes in the Florida Keys -- even if it is only a "moratorium" -- is a Lucas categorical taking.

We would like to also mention that the recent Florida 5th DCA decision in St Johns River Water Management District v Koontz, Case No 5D06-1116 (January 9, 2009),brought to mind the fact that, under the US Supreme Court's Nollan/Dolan decisions, forcing landowners to dedicate land to the government as part of the price of obtaining a building permit, is an unconstitutional exaction and a Fifth Amendment taking.

Wouldn't it be interesting if a group of property owners filed a class action against the County and the State, demanding that all of the ROGO lots "donated" to obtain building permits be deemed "unconstitutional exactions," and requiring the County to commence eminent domain proceedings against every one of those parcels, and to pay the "donor" the Fair Market Value of the "donated" lots. After adjusting for Condemnation Blight, of course, which would kick the Fair Market Value up to 125% of the assessed valuation of nearby, developed, residential lots.

Anyway, those are my thoughts for February 2009. Check back here or on to see how these ideas get transformed into action.

Thursday, January 29, 2009

Neither the Monroe County Commission, nor any Florida Governor, will Ever Get It

Now that we have the Statutes-of-Limitation defenses behind us (Keys landowners can wait for a thousand years), and local and state governments are having problems finding two nickels to rub together, it is a good time for Keys land use lawyers to increase their "taking/due process" offensive against the State and local governments. The pair of regulatory taking opinions by the 3rd District Court of Appeal on New Year's Eve, Collins v Monroe County & the State, and Shands v Marathon, have pushed affected Keys landowners well into the finals of the liability stage in regulatory taking lawsuits.

Our pending cases include (i) the 11-plaintiff Collins case, (ii) the McCole and (iii) Beyer cases against Marathon and the State, (iv) Evanoff's vs. Islamorada & the State, (v) Sutton v Monroe County, and (vi) Lightner, et al v Monroe County & the State, a class action Taking/Due Process suit involving the confiscatory regulations on Big Pine and No Name Keys. And let's not forget our $7 million judgments against the State of Florida in State v West & Richardson, that are now on appeal at the Third DCA. (The state's initial brief is due in mid-February.)

Since 1986, the State of Florida and "Junior" (a/k/a Monroe County) have enacted so many confiscatory regulations in the Florida Keys that they make the California Coastal Commission appear pro-development! If we had not been such a miniscule part of Florida, with only 80,000 residents (read "homevoters") on a 120-mile chain of islands, big law firms would have been all over this problem 20 years ago. But, we are a miniscule mass of people. While 80% of the owners of affected properties do not live or vote here, 12 years ago that percentage was 90%. It is clear that non-resident landowners have been more willing, than locals, to trade their land for 15 cents on the dollar.

The time has come to get 100% of Fair Market Value for the remaining undeveloped properties in Playboy bunny rabbit, Key deer, and endangered rodent habitats -- so those little critters can enjoy life and pay property taxes like everyone else. And if Gideon Kanner is looking for a place where his experience can be put to the test on a constant basis, maybe he will think about spending some time in the Florida Keys.

Thursday, January 22, 2009

Uppity Landowners Get Compensated for Questionable Land Use Regulations

In September 2008, we reported on two "uppity landowners" who had blasted Florida Keys' municipality Islamorada at the United States 11th Circuit Court of Appeal. A few days ago, the Village of Islamorada paid the owners of Island Silver & Spice $716,ooo in damages. United States District Court Judge James Lawrence King had awarded Island Silver & Spice $600,000 in damages before the appeal was taken. The extra $116,000 was interest. The attorneys' fees are still being negotiated.

There is more (or less) to this than meets the eye. I am reliably informed that the "formula retail" ordinance invalidated in this litigation was the second ordinance adopted by the newly-formed "village" of Islamorada in 1997. I am also informed that this rather asinine ordinance was introduced by one of the principal promoters of incorporation of the miniscule municipality -- to benefit a local grocery store owner -- after said promoter was elected to the municipality's first legislative body.

This is the kind of corruption (or illegal favoritism) that too often surfaces in small-town politics. What makes this case an even worse example of corruption is that the $716,000 was paid by the Florida League of Cities' self-insurance fund -- the corrupt Village of Islamorada lost only its $25,000 deductible. If I were representing the League of Cities, I would be putting my energies into sticking the Village of Islamorada with the entire $716,000, plus attorneys' fees. The total, with attorneys' fees, has got to be in the range of a million dollars.

Key Largo residents take note. The smaller the unit of government, the smaller the brains of its elected officials. Unfortunately -- or maybe fortunately, depending on your perspective -- these self-insurance funds usually exclude inverse condemnation litigation. So you can bet your taxes will go up if your local government loses one of those.

Wednesday, January 21, 2009

Time's Up: Local Governments Unable to Find Legal Basis for New Judge's Reversed Decisions

Six days have elapsed since the 15-day deadline ran for filing Motions for Rehearing in the Collins and Shands regulatory taking cases (January 15, 2009). Apparently neither Monroe County (Collins), nor the City of Marathon (Shands), identified errors in the Third District Court of Appeal's reversals of Judge Audlin's dismissals of these cases. The appellate court issued its mandate in Shands v City of Marathon a week ago (January 16, 2009). The mandate in Collins v Monroe County will be delayed slightly, as we filed a Motion for Clarification on January 15, 2009.

As to our Motion for Clarification, we were concerned that the Court of Appeal appeared to believe that the Florida Keys had no zoning regulations until the State imposed them on September 15, 1986. This perception comes from the Third DCA panel opinion in Monroe County v Ambrose, a vested rights case we prosecuted from 1997 to 2003. We asked the current court to correct that misperception. The Florida Keys adopted zoning regulations in 1959 -- the first year Florida's non-charter counties had the right to do so. The County's legal gnomes have until January 25, 2009, to file a response.

We note -- with a taxpayer's curiosity -- that the Monroe County Attorney's office is asking the County Commission for permission to file a Petition for Certiorari with the Florida Supreme Court -- on the condition that the County "will not bear any additional attorneys' fees" for this speculative effort. Give me a break -- if you can't come up with a reason to file a Motion for Rehearing, what makes you believe you can get the attention of the Florida Supreme Court?

We also note -- with a bit more skepticism -- that Monroe County's contract legal "geniuses" from Kansas City and Los Angeles did nothing other than obfuscate the issues in these cases -- in exchange for more than $1.5 million in legal fees. (The same can probably be said for Marathon's outside counsel.) It is amazing how local government officials convince themselves that they will manage to escape culpability from their confiscatory behavior by hiring expensive attorneys from another planet.

Sunday, January 11, 2009

The Gathering Storm: What Economic Stimulus?

Soon, a new President and an anxious Congress will pour another trillion dollars into tax cuts, infrastructure, highways, mass transit and new energy systems, and whatever ... to "stimulate" the U.S. economy. But most economists who have weighed in on the subject don't believe another trillion dollars will do anything to bring us out of recession. They note that the big public works projects of the 1930's did not bring the country out of the Great Depression -- it took a war in Europe to do that. And, in case anybody missed it, sending $350 million to Wall Street hasn't done anything but bail out investment bankers -- who are part of the problem, but not the solution.

Today, New York Times op-ed columnist Thomas Friedman observed "If we spend $1 trillion on a stimulus and just get better highways and bridges — and not a new Google, Apple, Intel or Microsoft — your kids will thank you for making it so much easier for them to commute to the unemployment office or mediocre jobs."

"... a bridge is just a bridge. Once it’s up, it stops stimulating. A student who normally would not be interested in science but gets stimulated by a better teacher or more exposure to a lab, or a scientist who gets the funding for new research, is potentially the next Steve Jobs or Bill Gates. They create good jobs for years. Perhaps more bridges can bail us out of a depression, but only more Bills and Steves can bail us into prosperity."

Friedman's op-ed piece makes the point that the U.S. educational system is seriously in the toilet, and particularly so in its failure to attract students and teachers into science and engineering careers. He urges the politicians to read the National Academies' 2005 report, "Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future," published in book form in 2007. Friedman goes on to say:

"Gathering Storm was the outstanding 2005 report produced by our National Academies on how to keep America competitive by vastly improving math and science education, investing in long-term research, recruiting top students from abroad and making U.S. laws the most conducive in the world for innovation. You see, even before the current financial crisis, we were already in a deep competitive hole — a long period in which too many people were making money from money, or money from flipping houses or hamburgers, and too few people were making money by making new stuff, with hard-earned science, math, biology and engineering skills."

"The financial crisis just made the hole deeper, which is why our stimulus needs to be both big and smart, both financially and educationally stimulating. It needs to be able to produce not only more shovel-ready jobs and shovel-ready workers, but more Google-ready jobs and Windows-ready and knowledge-ready workers."

Here are some quotes from the Executive Summary of The Gathering Storm.

"If you can solve the education problem, you don't have to do anything else. If you don't solve it, nothing else is going to matter all that much." former Federal Reserve Chair Alan Greenspan.

"We go where the smart people are. Now our business operations are two-thirds in the U.S. and one-third overseas. But that ratio will flip over the next ten years." Intel Corporation spokesman Howard High.

"If we don't step up to the challenge of finding and supporting the best teachers, we'll undermine everything else we are trying to do to improve our schools." Louis Gerstner, former Chairman, IBM.

"When I compare our high schools to what I see when I'm traveling abroad, I am terrified for our workforce of tomorrow." Bill Gates, Microsoft.

You can download a pdf copy of Rising Above the Gathering Storm, for free, on the National Academy of Science's website. Read it ... but you may be frightened by what you learn.

Friday, January 9, 2009

Keys Commissioners in Denial

A Monroe County commissioner revealed the County's response to the Collins decision in a radio interview today. They plan to file a petition for review by the Florida supreme court -- no surprise there. But as Florida's District Courts of Appeal are intended to be the courts of last resort, the chance the supreme court will review the Third DCA's decision is zero. Florida's highest court reviews decisions that are (1) certified by a District Court of Appeal as being "in conflict" with another District Court's decision, or (2) certified as a question of "great public importance." (A petition for discretionary review, even by a government entity, does not trigger an automatic stay of the District Court's mandate, though government appeals to the District Courts of Appeal get an automatic stay.)

Option one -- conflict -- is not in play because the Florida Keys' Beneficial Use Determination process only exists in one Florida County -- so no inter-District conflict will ever arise. Option two -- "great public importance" -- is unlikely as well. First, the District Court panel did not use that language in their opinion -- and only the District Court judges can make that call, not the litigants. Second, what makes anyone with a brain think that a confiscatory local government's desire to acquire land for 15 cents on the dollar is of such "great public importance" that it should be continued? It's time to bring this charade to an end.

No word yet on what the City of Marathon plans to do in the Shands case, but Marathon does not have in-house, salaried attorneys as Monroe County does, so a petition for discretionary review would be a bit more expensive. We assume the County will finally terminate its outside counsel from Kansas City, after paying them at least $1.5 million to get to this point.

A skeptic might say that seeking discretionary review by the supreme court just adds to the time it takes for each plaintiff to get paid. Or that it is just a government ploy, hoping that fair market values (which they abhor anyway) might decrease in the interim. But the government owes these plaintiffs rent on their properties, at 10% of their fair market values (appraised assuming that they were buildable on demand) on the date of their Beneficial Use Determination application, and on each anniversary of that date, plus interest, until the government either takes title to the property by eminent domain. At which time it will also have to pay the fair market value as of the date of trial. This is called "rent-to-buy." So the bill keeps going up during these delays.

Bernie Madoff managed to steal $50 billion, for which we all must give him credit -- though it was all quite illegal. His "marks" probably knew something illegal had to be going on, but why worry as long as the checks kept coming? Monroe County and its co-conspirators in State government have been fleecing innocent landowners for more than 15 years, adopting confiscatory regulations that prevent people from using their property -- ostensibly under the banner of the local government. Then, the State government shows up on the doorstep and offers 15 cents on the dollar for your "unbuildable" property. What is this? A "good cop" -- "bad cop" con?

The only aspect of this government con game that is of "great public importance" is stopping the government from stealing innocent landowners' property. If the Collins plaintiffs -- the screwees -- had lost this case at the Third District Court of Appeal, then there might be an issue of "great public importance." As it is, our local "Bernies" deserve their fate.

Monday, January 5, 2009

Monroe County Planners Conspire with County Commission to Strip Vested Rights Decision from Key Largo Landowner; Judge Buys It

The Florida Keys had a gut-wrenching change in land use regulations 22 years ago (Sept. 15, 1986, to be precise; and yes, I was here). As part of the 1986 ComPlan, two "safety valve" ordinances were put in place -- the Beneficial Use Determination ordinance you have read about on this blog and on my website. The other, a Vested Rights Determination, you have not. That's because the Vested Rights process had a one-year deadline for applications while the BUD process is available forever.

In 1987, the managers and owners of the Ocean Reef Club, ("the Reef)" an exclusive resort community at the north end of Key Largo, filed a Vested Rights application on behalf of the corporation, the club, and all the owners of land within the Club's (rather large) boundaries. The County appointed John Bigler, a Key West attorney, as Special Master to conduct a hearing on the application. Fred Tittle, who later became of counsel to Mattson & Tobin, represented the Reef. County Attorney Randy Ludacer represented the County. (My, those were the days, weren't they, when the County Attorney actually did some work instead of farming it out to $450/hour private attorneys.)

As in all administrative proceedings, a hearing was eventually held. Tittle and Ludacer went into executive session and carved out a deal. (In law school they called this "negotiating.") Tittle and Ludacer eventually returned to Mr. Bigler's hearing. They presented their done deal; there was some testimony by The Reef's manager; the deal was approved; and the County Commission approved Mr. Bigler's Recommended Order vesting everything on the planning horizon.

Fast forward 10 years. In 1996-97, the Florida Dept. of Community Affairs rammed a set of confiscatory wetland regulations down the County Commission's throats. "Adopt these or prepare for boarding" is what I understand the DCA said. (Although I knew that some of those DCA people were actually human; I also knew that some were decidedly evil.) These new rules included a novel concept; "red-flag" and "green-flag" wetlands were about to be identified (by aerial surveys using drunken pilots flying upside-down). Now, it made no difference to these folks that neither the US Army Corps of Engineers nor the Florida Dept. of Environmental Protection (FDEP) gave a whit about these red-and-green flag wetlands. They were going to SAVE THE KEYS. (Seems to me the Keys needed to be rescued from these lunatics.)

Fast forward another 10 years, to 2008. Now we're litigating that nice, cordial vested rights deal the County cut with the Reef in 1988 -- saving the County a huge legal bill at the time. Our client happens to have been one of the landowners covered by the 1988 Vested Rights order. But the drunken pilots discovered a patch of "caprock wetlands" on her property (which had been legally dredged and partially filled decades ago), and County "growth prevention" personnel told her she could not build anything on her $1 million lot.

OK, she said, who is going to pay me? So Andy Tobin took her through the Beneficial Use Determination process, where a landowner either gets paid, gets a permit, or gets the right to sue (See the Collins v Monroe County blog entry dated 12/31/08.) Instead of one-of-the-above, she was "granted" a reduction in bulk setbacks (that conflict with the Reef's setbacks), but told to "forget it."

So, can you imagine our chagrin when the County "planning staff" (read: "thieves") put language into our client's "beneficial use determination" resolution that purports to alter the Reef's 1988 Vested Rights order. Though the BUD ordinance spells out what the County Commission's choices are, they cannot help themselves from overreaching.

This case is now on appeal to the Florida Third District Court of Appeal, with oral argument set for January 13, 2009. One has to work very hard to stay ahead of the crooks in this business. At least Bernie Madoff only took people's money. Wish us luck.

Saturday, January 3, 2009

The Role of the Unions in the Latest Economic Disaster

There is a link to "The Becker-Posner Blog" on my list of favorite blogs. Gary Becker won the 1992 Nobel Prize in Economics, and Richard Posner has been a judge on the United States 7th Circuit Court of Appeal since 1981. The two co-write a blog that addresses the US economy from their legal and economic points of view.

Their latest blog entry (click on the title of this post) addresses the problems facing GM, Chrysler, and Ford, in their attempts to remain viable companies while being saddled with the problems created by the United Auto Workers. As one who left Michigan in 1969, at age 24, I relate to the permeating effects of the UAW on the Big Three automakers in Michigan's economy.

As Judge Posner observes, the collaborative efforts of the Big Three and the UAW over several decades have placed the car companies in an untenable position vis-a-vis the union. For 30 years, the offshore car companies have built plants in the American South, with the cooperation of those State's legislatures, from which they have been eating the Big Three's lunch. Unless something dramatic happens -- and soon -- we will be witnessing the failure of all three domestic car companies (and the $15-$20 billion the Feds are giving to them). The Big Three have to ring the bankruptcy bell and shed their UAW blanket -- rather than allow Asia to take over America's auto sales. Just as the airlines did after 9/11, the car companies need to reorganize and shed their UAW contracts.

Note added January 4, 2009. There is an opinion piece, on pp. 9-10 of the Week in Review section, in today's New York Times titled "The End of the Financial World as we Know it." It does a nice job of deconstructing the ongoing bailout of investment banks that are "too big to fail," arguing that the Feds are just pouring that money down the drain. It's well worth reading, and the New York Times website allows you to read it for free.

Friday, January 2, 2009

Protecting Non-Voting Property Owners from the Tyranny of the Majority

Today I learned that one of our Florida Keys "regulatory taking" plaintiffs is the subject of animosity from some of his fellow landowners who own homes on developed land. His "friends" believe this gentleman is trying to bankrupt Monroe County with his regulatory taking claim. I would point out that our client's "fellow landowners" are responsible for the election of our County Commission, as 70% of the owners of undeveloped Keys land are not registered to vote in Monroe County.

The drafters of the United States Constitution feared, more than anything else, the "tyranny of the majority" that can be launched by the majority of voters -- or in some instances one judge -- against a minority of voters. It was for that reason that the Bill of Rights was adopted by the first U.S. Congress and all of the States. None of the first 10 amendments to the U.S. Constitution protect the rights of government -- they are intended to protect the rights of the minority against the evil doings of the majority.

Monroe County suffers from a number of parochial failings, including the "got-miner" mentality of a majority of its voters (and their lackeys, the County Commissioners). Over the past 20 years, Keys got-miners have used the ballot box to halt the construction of homes and businesses by the non-voting minority landowners. This is wrong -- in fact, this is sick. Our clients have turned to that 1789 document, called the United States Constitution, to correct this wrong -- and their unaffected neighbors are pissed as hell. We and our clients are not trying to bankrupt the County. Even if we were, the County cannot declare bankruptcy to avoid paying Just Compensation to our clients.

Non-charter Florida counties have no bankruptcy avenue to take. Non-charter counties -- including Monroe County -- have no corporate existence; they are merely lines on a map. They cannot absolve their debts by filing for bankruptcy; in fact they cannot file for bankruptcy, period.

What can happen -- and now likely will happen -- is that Monroe County's Commissioners will be replaced by a board of accountants named by the Governor -- just as happened in Miami several years ago, and the accountant board will raise property taxes to the maximum allowed by the Florida Constitution (10 mills). That is four times the current property tax rate of about 2.5 mills.

For you got-miners who are listening, let us assume you now pay $4,000 per year in property taxes. One-half of that sum goes to the School Board, so you are only paying $2,000 to the County. The County's tax assessment runs about 2.5 mills, the lowest rate in the State of Florida, lower even than Palm Beach or Collier Counties. The Florida Constitution limits local government taxes (outside of municipalities) to 10 mills. So your County ad valorem tax could jump a factor of 4 until it hits the Constitutional maximum, or $8,000 per year. Add back the $2,000 school tax, and your tax bill has just gone from $4,000/year to $10,000/year. But just think, that vacant lot next door will never be developed, and it will only cost you $6,000/year to keep it that way. (One way or another, we are forced to pay for getting our wishes granted.)

It is unlikely that increasing all Monroe County tax bills by a factor of four will compensate all of the landowners (70% non-voting) for the regulatory taking of their land, but at that point the State of Florida will be on the hook for the difference. There will be no County bankruptcy filing under any circumstances. The developed-property owners will get nailed with several years of maximum tax bills, and the State will cough up the rest of the money. Our clients, most of whom are well into their senior years, will quietly laugh all the way to the bank (if they can find one, that is).