When will the Government Figure it Out?

Three weeks ago, the State of Florida deposited $8.85 million with the Clerk of Court for Monroe County to compensate the landowners in Florida DEP v. West for the condemnation of their North Key Largo properties in April 2004. When this eminent domain action was filed as a slow-take in 1995, the State offered a mere $160,000 for the subject properties. Our response to the slow-take was a regulatory taking counterclaim. That was our way to protect landowners from the State "walking away" from any jury verdict it did not like.

Land values began to rise in 2001 -- although not on these properties. In 2004 the State opted for a "quick-take." At that time, the State's estimated fair market value of the two parcels -- based on the confiscatory regulatory scheme -- was $630,000. But after executing the quick-take, the State could no longer walk away from a jury verdict that exceeded its budget. After all, nobody had been able to build on North Key Largo since February 8, 1982 (except at the Ocean Reef Club and a few existing subdivisions).

After the 2004 quick-takes, we re-cast the regulatory taking counterclaim into a jury instruction on condemnation blight. Even though the Florida Supreme Court has embraced condemnation blight on at least two occasions, the State's in-house attorneys could not grasp the concept. Fortunately we had a trial judge, Luis Garcia, who understands government cannot prohibit a landowner from using his property, and then benefit from its own actions by driving down the property's acquisition cost. (In 2001, Judge Garcia ruled the same way in another case, Shadek v Monroe County, where White & Case attorney Doug Halsey raised the same issues and Monroe County settled by paying $6 million in temporary taking damages.)

So ... the government goes down for the count again! I have remarked, on numerous occasions, that the reason for this waste of money is nothing more than the "tyranny of the majority" in small, attractive, relatively well-to-do communities such as the Florida Keys. Those who already own homes in the Keys will do everything in their power to prevent others from doing so. To that end, the "got-miners" elect like-minded County Commissioners, who respond by prohibiting new development wherever they find it. It's a self-perpetuating, downward spiral, that could well -- unless reversed -- bankrupt every owner of developed property in the Keys.

To got-miners: think about it!

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).

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.

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.)

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 MattsonLaw.com) 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.

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, http://mattsonlaw.com, 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.

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.

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, inversecondemnation.com 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. "...to 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 mattsonlaw.com to see how these ideas get transformed into action.

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.

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

On the Monroe County Commission's agenda for December 17, 2008, is a request from the County Attorney's office for permission to file an amicus curiae brief in the State's appeal of the $6.9 million (plus costs, post-judgment interest at 11%, and attorneys fees) West & Richardson Condemnation Blight judgments. To quote from the request:

On April 9, 2008 - prior to the jury trial on compensation - the trial court entered an "Order Granting Defendants' Motion In Limine on the Issue of Condemnation Blight." The property owners contended that precondemnation actions of the State and County blighted the property by preventing all, or substantially all, beneficial use of the property. The Order prohibited the parties from presenting any evidence regarding the effect of any County or State regulation promulgated, enacted or amended after February 8, 1982. The Order required that the jury be instructed to determine the Fair Market Value of each parcel as of the de jure takings in Spring 2004, according to the highest and best uses they would have had on February 8, 1982.

On October 8, 2008, the trial court entered final judgments awarding just compensation totaling $6,877,257 (plus costs and attorneys' fees). On October 30, 2008, the State of Florida filed Notices of Appeal of the two final judgments. This matter is of great importance to the County because the appellate court's decision will potentially set precedent applicable to the inverse condemnation actions currently pending against the County. In some of those actions, plaintiffs have similarly asserted theories of condemnation blight. The acceptance or rejection of those theories will impact how property is valued for purposes of determining just compensation awards, and either increase or decrease the County's liability exposure.

Other than having an incorrect date for the Condemnation Blight Order (it was April 9, 2007, not 2008), and omitting the fact that the judgments are earning 11% interest per year, we agree that the County could be in deep trouble here -- but so is the State.

Condemnation Blight in the Florida Keys

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

State Appeals North Key Largo Verdicts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Florida Keys National Park? Are They Nuts?

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

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

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

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

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

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

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

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

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

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

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

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.

West-Richardson Condemnation Trial to Feature Condemnation Blight Defense

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

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

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

Condemnation Blight in the Florida Keys

Since 1986, Florida Keys landowners have watched government acquire the vacant property next door for 10 cents on the dollar. There are about 8,000 Keys landowners who haven't given away their property for next to nothing, but that number decreases every day. This phenomenon has a name. It's called Condemnation Blight. It happens when government decides to acquire property for preservation purposes, but doesn't appropriate sufficient funds to pay Fair Market Value for the property it wants to control.

If you are getting letters from the State's hired land thieves, don't make the mistake of assuming you have no choice other than accepting the State's low-ball offer. Just saying "no" is a good start. You don't have to sell at a discount if you don't want to.

But then don't make the mistake many have made before you -- hiring some out-of-the-Keys eminent domain lawyer. They don't understand the condemnation blight situation in the Keys -- and they don't want to.