Sunday, January 13, 2013

Takings Case Set for Oral Argument at the SCOTUS on January 15th

The U.S. Supreme Court is scheduled to hear oral argument in the exaction takings case of Koontz v. St. John’s River Water Management District this Tuesday, January 15, 2013.  Koontz raises two important questions: first, whether the Nollan/Dolan “nexus” and “proportionality” tests apply to exactions beyond those that require public occupation of private lands; and, second—and more significantly—whether those tests are applicable at the point in time when an exaction is merely proposed.  I outlined these issues in an earlier post here, and the Koontz briefs are available here.  In this post, I will set out several rather peculiar passages in the Court’s first takings opinion of the current term, the 8-0 decision in Arkansas Game & Fish Commission v. U.S., and suggest that at least some of these passages could prove influential in Koontz and that all of them could affect the development of takings jurisprudence more generally moving forward.

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The holding in Arkansas Game is on its face a narrow one: the Justices unanimously agreed only that recurrent flooding over a temporary period resulting from the government’s operation of a dam is not categorically immune from takings liability.  However, dictum throughout the opinion may leave some scratching their heads. 

First, the Arkansas Game Court in several instances spoke as if the government’s motivations always have played an obvious and primary role in adjudicating regulatory takings disputes. However, one could argue that the role of governmental motivations is not as clear as the Court makes it out to be.  In a recent article, noted takings expert Robert Meltz identifies a series of lower court cases debating whether and in what instances takings should be considered strict liability offenses.  Allegations surrounding the Water Management District’s motivations figure prominently in the takings claim at issue in Koontz.  It remains to be seen whether the Koontz Court will offer a more thorough assessment of the role of governmental motivations in takings analyses than that set out in Arkansas Game.

Second, in refusing to acknowledge an exception to takings liability for temporary flooding, the Arkansas Game Court excused a “passing reference to permanence” in one of its earlier opinions because of the “time factor” — the Court explained that the earlier matter “was decided… in 1924, well before the World War II-era cases and First English, in which the Court first homed in on the matter of compensation for temporary takings.” 

In its modern takings jurisprudence, the Court has not always so swiftly brushed aside its old cases because of the very fact that those cases were decided in a bygone era—say, an era well before the Court homed in on the public’s interest in preserving the environment.  In this sense, one theoretically could read Arkansas Game as having implicitly opened the door to a revisionist interpretation of the Takings Clause akin to the re-interpretation of the Due Process Clause that occurred in the post-Lochner era.  As I have argued elsewhere, Nollan and Dolan in at least some instances require scrutinizing the means and ends of a regulatory decision well beyond the traditional deference afforded to such acts under modern substantive due process jurisprudence.  However unlikely, it is at least within the realm of possibility that at least some members of the Court, in the course of reviewing the Koontz case, will reconsider the appropriateness of maintaining any place for the Nollan and Dolan tests within the larger picture of takings law.

Third, the Arkansas Game Court restated that Penn Central’s “situation-specific” inquiry is the driving force in most regulatory takings cases.  However, it discussed what have become known as the Penn Central “factors” in a slightly different way than it has in the past.  In Penn Central, the Court noted the importance of considering: (1) “the economic impact of the regulation on the claimant;” (2) “the degree to which the regulation has interfered with distinct investment-backed expectations;” and (3) the “character of the governmental action.”  Arkansas Game seemingly elicited not three but five factors, only the first of which— (1) investment-backed expectations —directly mirrors a factor noted in Penn Central.  The other factors mentioned in Arkansas Game include: (2) the “severity of the interference” (where a parenthetical pointed not to the economic interference but rather the repetitive nature of the government action); (3) the “degree to which the invasion is intended or is the foreseeable result of authorized government action” (a factor related to the “motivations” issue discussed above); (4) the duration of the regulatory restriction; and (5) “the character of the land at issue.” 

While “factors” (2) through (5) arguably reflect principles mentioned in prior takings cases, they had not been stated in these terms or in such a systematic manner until Arkansas Game.  Of these factors, the development of the “character of the land” factor may be particularly interesting to watch.  If the denial of the permit application in Koontz is subject to a Penn Central (as opposed to a Nollan/Dolan) analysis, this “character of the land” factor could pose a new, difficult hurdle for the takings claimant on top of the existing hurdles that landowners ordinarily face in Penn Central cases.  Nearly Koontz’s entire property is considered wetlands, which lie within the Riparian Habitat Protection Zone of the Econlockhatchee River Hydrologic Basin.  The Florida legislature designated this “zone” to protect the “abundance, food sources, or habitat of aquatic or wetland dependent species.”

Fourth, the Arkansas Game Court declared itself “not equipped to address” the seemingly foundational question of whether the Arkansas Game & Fish Commission possesses an interest in a certain water flow that, in accord with Arkansas law, should be considered “property” for constitutional takings purposes.  It will be interesting to see how the Court addresses this threshold question in Koontz, for where a proposed exaction is refused or withdrawn, it is not clear what interest has been “taken” from the applicant that can be protected by the Takings Clause. 

Fifth, the Arkansas Game Court chastised the federal government for espousing “the prophecy that recognizing a just compensation claim would unduly impede the government’s ability to act in the public interest.”  Rejecting a position staked most prominently by Justice Blackmun in prior takings cases, the Court asserted that “the sky [will] not fall” if governmental entities are exposed to temporary-flooding takings claims.  It is not evident how high a bar the Court has set with this “sky falling” test.  Regardless, it seems the Court significantly understated the impact of its takings jurisprudence on the efforts of government officials charged with protecting the public health, safety, and the environment through the regulation of land uses. 

In Koontz, an amicus brief filed on behalf of the National Governors Association, et al., in support of the Water Management District stresses this point with particular vigor from the perspective of local governments.  Noting the inability to obtain takings insurance, the difficulty for general local counsel (let alone experienced takings litigators) to accurately predict how takings cases will be decided, and the fact that even immediate repeal of  a regulation following an adverse judgment can leave a community liable for multi-million-dollar temporary takings payments, the brief explains that “[a]n actual takings award, even for a mere temporary taking, can come close to bankrupting a small town and imposes burdensome costs on all but the very largest jurisdictions.”  It is conceivable that such sentiments may prompt the Koontz Court to revisit and heed Justice Blackmun’s guidance on the great chilling effect that continued expansion of takings doctrine can produce.

Please stay tuned to the Environmental Law Professors Blog for updates as Koontz heads to the U.S. Supreme Court for oral argument this Tuesday, January 15, 2013.

-Tim Mulvaney (tmulvaney@law.txwes.edu)

http://lawprofessors.typepad.com/environmental_law/2013/01/takings-case-set-for-oral-argument-at-the-scotus-on-january-15th-.html

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