Nollan-Dolan Exactions May See More Play

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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.

No-Use Zoning Held Unconstitutional on SDP Grounds

On July 1, 2008, the Supreme Court of Wisconsin (yes, the ultra-liberal court that decided Just v. Marinette County in 1972) ruled that when a land use district has no "as-of-right" uses, said regulation is unconstitutional on substantive due process grounds. (Think Lochner v New York, 198 US 45 (1908).) Click on the title of this post to view and download a copy of the opinion in Town of Rhine v. Bizzell, et al., 2008 WI 76, from the Wisconsin Supreme Court's website.

Sound familiar, Keys landowners? Do I hear "Tier One?" --- "red-flag wetlands?" --- Offshore islands, anyone? It's long past time to start challenging Monroe County's (and its municipalities') confiscatory land "lack-of-use" regulations, starting with the bogus "rate-of-development caps," and working our way through the "tier system" and the local wetland regulations. Oh, and there are no statutes of limitation on constitutional challenges to ordinances or statutes. The ordinance in Wisconsin had been in effect over 20 years before Bizzell, et al., took it down.

Thanks to Pacific Legal Foundation for the heads-up on this positive development.