Oral Arguments in Collins and Shands Taking Cases

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

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

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

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

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

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

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

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

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

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

West-Richardson Post-Trial Activity

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

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

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

West-Richardson Verdicts In

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

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

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

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

May 2008 Litigation Updates

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

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

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

Court Dismisses Regulatory Taking Claim -- Ignores Ripeness Requirement

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

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

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