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).