The Galleon Bay Case

During the 1960s, Hannelore and Wolfgang Schleu bought undeveloped land on No Name Key, then linked by a wooden bridge to Big Pine Key. In the late '60s and early '70s, the Schleus, and others, platted two canal subdivisions, Bahia Shores in 1969 and Dolphin Harbour in 1970, with 91 lots in total. The Schleus held on to additional vacant land east of the two subdivisions, 14.5 acres of which were transferred to the Galleon Bay Corporation.

In 1986 - at the request of a commercial fisherman who had an option to buy the 14.5 acres, Monroe County rezoned the Galleon Bay land to commercial fishing village, or CFV, a zoning district that allows both residential development and limited commercial fishing uses. When the fisherman could not obtain a dredging permit from the Dolphin Harbour canal to the 2-acre borrow pit on the Galleon Bay parcel, he let the option expire. At that point in time, the Schleu's daughter began a quest to develop the Galleon Bay land.

This is where we came in - in 1988 - to assist Galleon Bay in obtaining a dredging permit so fishermen could have ingress and egress to the ocean. Even though the state agency responsible for issuing the permit agreed to do so, another state agency - the Department of Community Affairs (DCA) - exercised a then-unheard of state authority, under the federal Coastal Zone Management Act, and stated its opposition to the issuance of the dredging permit. What made this particularly galling was the same agency - DCA - had to sign off on the rezoning to commercial fishing village just two years earlier.

After its first fiasco with DCA, Galleon Bay requested a change in zoning to improved subdivision, that Monroe County denied. After all, they had to protect commercial fishing villages even if they had no access to the ocean. Undaunted, in January 1991 Ms. Schleu appeared before the County Commission for a 14-lot plat approval - after giving up 11 of the 25 dwelling units that supposedly came with CFA zoning. The plat was approved, but the DCA stuck its nose into Galleon Bay again. The DCA lodged an appeal of the plat approval with the Florida Land & Water Adjudicatory Commission (FLAWAC), an "agency" comprised of the Governor and Cabinet of Florida.

Still undaunted, Ms. Schleu filed a lawsuit against the Department of Community Affairs, and she filed it in the 16th Judicial Circuit, which consists solely of Monroe County. Circuit Court Judge Richard Fowler strongly suggested the DCA settle with Galleon Bay. And, after numerous conferences and delays, DCA, the County, and Galleon Bay agreed to a reduction in the sizes of the 14 lots, and the Revised Plat of Galleon Bay was approved by the County Commission in April 1994.

From 1991 to 2011, the only development on the Galleon Bay subdivision has been the construction of roads and drainage structures. One lot was exchanged for a loan advanced by a family friend. It is now owned by the government - because she could not build on it.

Galleon Bay went through a (statutory, not common-law) vested rights proceeding in 1998, after which a hearing officer, in October 1998, determined the corporation had invested $578,670 from the date of the first plat approval, January 1991, through April 1998. He recommended the County grant Galleon Bay vested rights to construct 14 homes on the property.

By 1998, the majority of the County Commission were "got-miners" (I've got mine; we don't want any more development). In April 1999, the County Commission rejected both the hearing officer's factual findings - which is a no-no - and his recommended order. In November 2001, Galleon Bay filed a Certiorari complaint against the Monroe County Commission on their vested rights decision. Circuit Judge Richard Payne reversed the County Commission's 1999 decision. See Final Judgment Granting Writ of Certiorari, October 2002. Monroe County appealed to the Third District Court of Appeal, and lost. Monroe County v. Galleon Bay Corporation, 876 So. 2d 569, writ denied, no opinion (Fla. 3rd DCA, 2004).

Meanwhile, in May 2002, Galleon Bay filed a regulatory taking lawsuit against Monroe County. The County third-partied the State of Florida, and Galleon Bay also sued the State after they became a party. Circuit Judge Richard Payne rendered an Amended Order on Liability on January 30, 2006. On April 18, 2006, Monroe County and the State of Florida filed a rather novel, Petition for Writ of Prohibition with the Third District Court of Appeal. The petition is so off-the-wall that I always suggest attorneys read it, if only for laughs. The District Court denied the petition, without oral argument, on June 2, 2006, four days before the jury trial was to begin. State of Florida and Monroe County, 930 So. 2d 627 (Fla. 3d DCA 2006). The jury trial on compensation was had June 6-10, and 12, 2006. The jury returned a verdict of $3,000,000.

Galleon Bay's appraiser valued the subject property at $6,000,000, while the government's appraiser valued it at $250,000. Galleon Bay had forcefully argued before, and during, trial that the government's appraiser should not be allowed to testify, as his appraisals were nonsensical. All the jury did was split the difference. Galleon Bay moved for a new trial, which was granted. Order Granting Motion for New Trial. The County and State appealed the new trial order and lost. Monroe County et al. v. Galleon Bay Corporation, 954 So. 2d 1169, per curiam affirmed, (Fla. 3d DCA 2007).

Circuit Judge Richard Payne retired at the end of 2006, and his successor rolled the clock back to before January 30, 2006, invalidating Judge Payne's January 30, 2006, liability order. In light of the fact that this successor judge also threw out four regulatory taking cases that were in front of him (Collins, Shands, McCole, and Beyer), and he was reversed in Collins, Shands, and Beyer, Galleon Bay filed a motion to disqualify the successor judge, as did Collins, Shands, and Beyer. Galleon Bay's regulatory taking case ended up with Circuit Judge Mark Jones - whose judicial experience is almost exclusively criminal law. Following a four-day bench trial on liability (as Judge Payne's January 30, 2006, liability order had been rescinded), Judge Jones entered an order, on April 27, 2011, dismissing Galleon Bay's regulatory taking case in its entirety. Galleon Bay has appealed that order, and its initial brief is due on January 4, 2012. For those with an interest in these matters, you may wish to read Judge Jones' Final Judgment in Favor of Defendants Denying Claim for Inverse Condemnation.

Twenty years is not the end of it all. There will be more to come.

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.