Property : Week of April 13

April 14 - Mark and Beth

First, the courts would not second guess local governments as far as slum clearance. Then, they moved into Hawaii. The court allowed land reform in this one instance. Midkiff is still alive.

Poletown:

Unemployment was at eighteen percent. Detroit was about 78% black at the time. Poletown refers to Polish. GM thought it was a good place for a factory, but there were 1500 single family homes there. The state supreme court said it was a tough case. They didn’t want to allow this other than just this once, even though it wasn’t “public use”. Poletown was overruled twenty-three years later because of the backlash. The slippery slope came to be. People thought this would be a signal to SCOTUS.

Kelo:

New London was in the same position as Detroit. The Italian community center was saved, probably because of political connections. It was not a slum, so they shouldn’t be able to use the slum clearance precedent. (Aside: this is not good for the economy.) They say this is a public use. It is better because the public thinks so. It is “well nigh conclusive”. The dissent says you cannot use the slum clearance because these houses aren’t harming anyone; this is the destruction of private property. In WI all property is supposed to be private.

Start all arguments with the text.

Kelo wins:

• Use means use by; they put it in there, plain meaning;
• use means ownership. This is a gross interpretation; this is constitutional; it is fixed, so the legislature cannot adjust like it normally would. The court is changing the US Constitution.
• Local is good, but what is more local than the private individuals summed decisions. Defer to local government, but here individuals are at issue;
• all courts have an obligation to protect individual rights against the majority; the court should be doubly vigilant.
• Property rights come from precedent, but more importantly from the 14th and the 5th; liberty and property are protected under due process. We are allowing what was bad about feudalism, displacement by the political higherarchy.
• Egalitae, this allows the powerful lobbyists to take away land. This will affect minorities more, so equal protection comes in; in reality the people who cannot resist are affected.
• We want to encourage investment; struggle hard to get your house, but we will take it away.
• Ownership is about withdrawing to your castle. The city says the planners will get the best plan under Euclid, but private interests are the most efficient; people work best in their own interest. Capitalism is the best; don’t fuck it up.
• Asian American says we don’t force people out; this case is even worse; they were allowing a voluntary system; here it is involuntary. Secure tenure, doesn’t it matter for people who actually own their property. Historic preservation, we want to have a scene of continuity with the past. Economic arwinism, if they are failing, put resources elsewhere; let them die as Captain Kirk says.
• The city says be satisfied with just compensation because property is fungible, and she can replace here house; there will not be too much taking; the government cannot afford it, but 1) people don’t trust the government ppraiser and 2) besides only accountants and lawyers think property is fungible; in reality it is worth more.
• The city will say it is an emergency, but it is in emergencies that the constitution gets tested; it doesn’t go away, and emergencies are ways for government to expand power; emergencies never go away, and they increase agency power.
• Slippery slope, this is not a unique circumstance; the dissent cites several instances. The Las Vegas parking lot that became a parking lot under a different owner is another example.
New London wins:
defer to local government. This is what the people want, separations of powers.
• Economic rationality (aside: although wrong) comes in. We cannot allow individuals to get in the way.
• Geo-Tech comes in. We want to avoid crafty people who hold out for more money; they might demand a plaque.
• Best use comes in. The law changes as the US changes; now there are more people; we need planning. The constitution evolves with changes.
• The Supreme Court said there is nothing to stop state courts from giving more protection. This is where Norwood comes in. 42 states have rejected Kelo. WI is one of them. WI constitution says owner occupied property is not “blighted”. A rich CA guy was outraged, so he offered to convert one of the justices houses (Souter); the neighbors said no however.
• Just slum control to Kelo shows the slippery slope just like Pine to Dimond Housing just like to Maxey down, and Euclid down to all zoning cases.
Norwood:
here in Ohio we uphold our constitution. The planers statement that it is “deteriorating” or might deteriorate in the future is not enough. Second, city tax collection is not sufficient. We want to keep private ownership. Your benefit estimates are not enough. To p 378.

April 15 - Mark and Beth

The takings are advertised in the legal parts of the paper, but nobody reads those, so the procedurally they lose their ability to object.

Regulation or taking?

Penn Central:

landmark preservation. You have to keep up the building. They are a profit making entity, and want to get rent. SCOTUS says it is not a taking. Stevens is seen as the most liberal, and Rehnquist is seen as the most conservative. It is case by case analysis. Case by case doesn’t allow people to make their decision before they go to court. They give guidliness: 1) the economic impact on the owner (they lose three million a year, but they can continue in its normal use); 2) they way it affects the distinct investment backed expectation (the owners expected to put a train station there); 3) character of the government action, how physical is the intrusion. Penn loses; we look at the whole parcel of land; if we look at the air, they are taking, but this intrusion is moderated because the other areas can be used. The property has less value, but the court says so what this happens all the time. Maybe the air isn’t taken; maybe they will allow a smaller building. Under a DDR, they could use air above adjacent buildings, so you get to recover some of your loss. The dissent says it prohibits the use of the property. “If a regulation goes too far, it is a taking.” –Holmes. But he also said government could not function if you pay for every regulation. He also said zoning depends on the reciprocity of benefit. Rehnquist says Penn Central gets nothing out of this, and does all the paying. Out of Armstrong, government cannot force some people alone to bear the costs.

New York wins:

• Jaque is gone as a property case, only tort. New buildings are not historic, so current investment will not be affected. (aside: I am going to build ugly buildings, but then they will knock them down.)
• Federalism and separation of powers come in; let people who are accountable make the decisions. Historic preservation is good. Inevitably these cases will come down to a level of degree; if we set the line away from intervention, there will be never ending litigation.
• Euclid panning is necessary in NY because it is huge.
• Egalitae says historic preservation drains a few deep pockets; they can afford it; Penn Central is a piece of paper; the share holders can afford it; the public that uses Penn Central will pay; they are commuters;
• this is the Mount Laurel goal of redistribution for upkeep of the city through tax burden.
Penn Central wins:
• the majority will always try to take; the court must defend individuals. If the government can regulate in a way that costs only the individuals, the court will over regulate because only NY gets the benefit with no cost.
• When NY owns buildings they don’t have the same historic value; they have religion when someone else is paying.
• Land use says land should be used in Ewing and Poletown, and to hell with historic buildings that are there.
• Jacque comes in. No new investor will be affected, but all investors will be affected in the sight that NY will take their money.
• This is extending Euclid because you are restricted in use and you must keep it up. Come in with a new plan and it will be rejected; this is the run-a-round; the transaction costs will be huge.
• Historic preservation is not so valuable; it is based on opinion; it is an aesthetic judgment; it imposes one vision; first amendment rights come in. All historic preservation is stupid; those people are elitists;
• NY needs the building, the real NYers not just the artistic crowd. The TDR is wonderful, but they are offering it to them because they know that this is a taking; this is an admission of guilt. TDR are window dressing; they are worthless; the owner of the TDR has to go through the process again; they may or may not allow the building; Penn Central tried that, but the city said they were overdoing it. TDRs make a mockery of the other restrictions; they ignore them to preserve the train station; if it is in the city’s interest, you can do anything;
• it is like Asian Americans getting a swimming pool and the density restrictions. They bargain them away. To p 379.

April 16 - Mark and Beth

Penn Central came down in 1978; there was a dissent. The property bar was concerned about a change. After Penn Central, prudential doctrine enables the court to say we are interested in this subject, but we aren’t ready today. In one of these cases the city of San Diego encouraged a nuclear power plant, but after the company acquired the land, nuclear power began to lose favor. Suddenly, the city changed its mind, and zoned the land for environmental conservation. The court said cercieri (aside: I can’t spell, so what.) denied.

This is the slide down the slippery slope of aggression in regulation. There was a dissent to the denial of cercieri, very rare. This zoning regulation goes too far; they have to pay for it (Brennan). He wrote the majority of Penn Central. After, SCOTUS addressed cases of residential development, but they then used the prudential doctrine not to hear it. The farmer, who remained, wished to develop; they said it was in a conservation zone. The owner said it was surrounded by houses; you can’t have a farm there; this farm is filled with pests, and there is no top soil; the public bought the top soil because the farm wasn’t good because of the neighbors. The neighbors wanted a park. It was a fraud. Pay him the residential value. Cecieri granted, but he didn’t exhaust his remedies; he only went to the board a few times. The court was possibly afraid of implications. In 1987 they addressed the issue. In First English, the church was not allowed to use its land. SCOTUS said if a regulation involves total use deprivation it is a taking; how total is total; Los Angeles said the court could rescind the regulation, but that is not enough because during the period it was taken, a temporary taking is a taking. Stevens said this puts a burden on the planners because total is not defined; this will chill planning.

Nollan:

the permit was conditionally granted. If CA owns the beach there is no case, so there is something wrong with the statement about the water level. The connection between the easement and the permit is based on the road behind the beach, which allowed people to see the ocean. They want the balance the impediment by increasing the psychology of the open beach. A 5-4 split based on conservative and liberal designation. Scalia for the majority says this is a taking. If you a property protector, the majority just gave away the store, but it is a dictum; dictum is realistically relevant. There is no connection; therefore, it is a “out and out extortion” taking.

The dissent under Brennan said planning will be hampered. Brennan calls the landowner a selfish interloper. Private property is an interloper to public expectations. Public officials are good under Brennan, unlike Geo-Tech. Stevens says Brennan changed his mind since First English, but Brennan said he didn’t say how far was too far. Brennan could say the same to Stevens based on Penn Central.

California wins:

• it is not a big deal for the Nollans. The majority gave away the store anyway; why go to all this trouble.
• Federalism and separation of powers, con law one, courts should especially defer over economic analysis. Holmes said the economic system is not determined by the court. (Aside: economic and social freedom cannot exist independently.)
• Investment backed expectation, they got to build their house, and they were allowed to apply for their permit.
• Utilitarian, 36 million people in CA, greatest good for the greatest number is good. Environmental demand for beaches is important. The character is stronger than Penn Central; sign a deed, but this is a condition on a permit to expand; it has been routine to make permits conditional. There will be no definitive way to say how far is too far, so we should just allow things.
Nollan wins:
• The US constitution says taking; “take” means to demand a deed; if this is not a taking, nothing is, plain meaning.
• The past precedent will not sustain this case; Euclid didn’t say give your property to us; this is regulation to ownership. This is real property; this is not like a tax. No legislatures will reach the wrong economic decision; they will always want to regulate;
• private land owners should decide, not lobbyists. People don’t work hard to share their property. The 1937 court fear about economic intrusion is not a problem; property is about freedom and autonomy;
• it is your castle; it is personal and individual. Kellog was about property being a home; 42 states diminished the effect of Kellog.
• Separation of powers, individuals should decide; they will work in their self interest for the common good (aside: Adam Smith).
• This is a big intrusion; it was important in Jauque; there are rational reasons for not wanting the public on their land; there is a crime fear; the public are slobs; private individuals keep their land clean.
• The gain to the public is not large; it is a half mile walk; they can walk across the road.
• Slippery slope, condemnation will not go too far since they have to pay for it, but in many cases they are reimbursed by another private seller.
• You can’t cross the beach anyway; there are fourteen other lots; they would have to pay for those lots;
• we’ll get them because they didn’t build fast enough. The psychological is just babble. To p 390.

April 17

• Back with Dolan(?), the natural partner of Nolan. If there's no connection between the exaction (easement on the beach and the reason for the exaction) then it's extortionary. Now, obviously, there will be some connection. Was the holding, is just a scintilla enough, or is there some standard amount that would be needed?

  7 years have gone by since Nolan. This is an OR case: OR is famously enthusiastic about environmental land use planning and zoning in general. Probably the most extensive zoning laws in the nation, with WI at #2.

  Here, a guy wants to pave over his driveway and expand it. The city says, they'll grant permission conditioned on:

  • The area behind the store has to be kept open, for water runoff reasons.
  • And the public has to have access to that green area.
  • And a 15-foot bike path easement
  The Goldilocks test: some states have restrictions that are too high: IL (requires specific and uniquely attributable connections). Some are too soft: very generalized vague connections... like CA in Nolan. Some states are just right: WI.

  Of course, all these three tests overlap, and are basically meaningless. Here, the proper test is said to be a "reasonable" relation. That sounds kind of like "rational." And at some level this is absurd: "rough proportionality" doesn't really tell us anything. This is going to remain the subject of negotiation and litigation. The talked-up differences between the states are just rhetorical.

  The court says these differences are insufficient. The greenway condition is rational, but the other things are not.

  This appears to put some teeth in Nolan but maybe it doesn't, given how ambiguous it is. Kennedy writes a separate opinion pointing out that this maybe shouldn't pertain only to real-property exactions. Why not also money? Not clear that it would be the same.

  Stevens, dissenting says: this is going to chill planning.

• Benis
  Criminal forfeiture: another kind of taking.

  Husband owns old car ($600) jointly with wife. He's caught in the car with a prostitute. The car is seized, and is going to be sold. Wife says: hey-- you can't take my car.

  The dissent: what is some low-level employee on an ocean liner smuggles drugs: can the government seize the whole ocean liner?

  Court says yes. In part because $600 isn't worth this degree of attention, and in part because forfeitures are well-established.

  AZ took all this a step further: if you're caught speeding, we'll give you a ticket, and then we'll also have an additional forfeiture for financing of the legislature.

  There are limits, though-- cf. Armenian guy trying to take $300K out of the nation. The court says not all of it can be siezed.

  NJ: forfeitures can't be used just to finance the police-- that is a corrupting conflict of interest.

  In WI, if you grow marijuana on your property, your property can be forfeited.

  Note that as a general rule, conservatives like Jaque, and liberals favor regulation. When it comes to forfeitures, the court flips.

• Erlich
  Typical example of what kind of connection between an exaction and the reason has to be present. Culver City, CA.

  The owner has a private sports club. It's not making money, because there's so much regulation. Owner wants to tear it down. The city claims that the losses are due to inept management.

  Anyway, the owner wants to put up 30 luxury condos, and that would make $10M. The city says what about the tennis courts, etc.? The owner says, well, they are mine, so there. The city wants it to be accessible to people, the owner says it's private. If you want it, condemn it and pay for it. But the land is $10M, so we get a suit.

  The CA court says Nolen/Dolen applies to monetary (personal property) exactions. This is far from clear, but that's what they say. We need rough proportionality. Not only that, but the public needs this kind of facility, so the owner has to put up $280K to put up his condos (the cost the city says it will take to put up its own tennis courts).

  Is this roughly proportionate? The city has no claim on these tennis courts-- it's sleight of hand. Of course, that's the point: the cases are vague enough to allow just this.

  This was an exam question in the past.

  The city also had two other exactions: in lieu of park land (this is fairly routine-- if we're having all these folks come into the area because of new residential facilities, we need more park facilities). This was about $30K. This is called a "welcome stranger" penalty.

  But what about taxation without representation: we're just making unrepresented (new) people pay through the nose.

  There's also a $32K art fee. If you want to develop property in Culver City, you have to buy art. You can either put it on the premises and own it, or you can buy it, and put it on city premises. And you can't pick the art. The city gets to pick. Of course, you can also pay money, and the city will go buy some art.

  This reminds is of Helmsley: the artist community is a powerful lobby, and it's exacting money for people who don't even vote in Culver City. Also 1A: if the city has to approve the art, but you have to buy it, doesn't that offend our 1A rights? No, says the court, this is routine, and it's not out of hand, and it's only 1% of the cost, so go ahead and absorb it.

• Lucas
  Very famous case, but probably zero impact at this point.

  There's very little way to distinguish between a public benefit and harm preventions. Only stupid people would pick the wrong title, says Scalia. :)

  This gets everyone on the USSC mad: in Penn Central we said we would do this on a case-by-case basis, but here they issue a categorical rule.