Sunday, April 24, 2016
Chris Odinet (Southern) has posted The Unfinished Business of Dodd-Frank: Reforming the Mortgage Contract (SMU Law Review) on SSRN. Here's the abstract:
The standard residential mortgage contract is due for a reappraisal. The goals of Dodd-Frank and the CFPB are geared toward creating better stability in the residential mortgage market, in part, by mandating more robust underwriting. This is achieved chiefly through the ability-to-repay rules and the “qualified mortgage” safe harbor, which call for very conservative underwriting criteria to be applied to new mortgage loans. And lenders are whole-heartedly embracing these criteria in their loan originations — in the fourth quarter of 2015 over 98% of all new residential loans were qualified mortgages, thus resulting in a new wave of credit-worthy homeowners that are less likely than ever before to default. As a result of this and other factors, the standard form residential mortgage contract, with its harsh terms and overreaching provisions, should be reformed. This is necessary not only due to the fact that such terms should no longer be needed since borrowers are better financially positioned than in the past, but also because of a disturbing trend in the past few years where lenders and their third party contractors have abused the powers accorded to them by the mortgage contract — mostly through break-in style foreclosures. This Article argues for a reformation of the Fannie Mae/Freddie Mac standard residential mortgage contract and specifically singles out three common provisions that are ripe for modification or outright removal.
April 24, 2016 in Common Interest Communities, Home and Housing, Law & Economics, Mortgage Crisis, Real Estate Finance, Real Estate Transactions, Recent Cases, Recent Scholarship | Permalink | Comments (0)
Sunday, October 6, 2013
It's that time again, this month's Professors’ Corner Webinar. A FREE monthly webinar which features a panel of law professors, discussing recent cases or issues of interest to real estate or trust and estate practitioners and scholars. Sponsored by the Legal Education and Uniform Laws Group of the ABA Real Property, Trust and Estate Law Section
Wednesday, October 9, 2013
12:30pm Eastern/11:30 am Central
This month's topic: Current Issues in Common Interest Communities
Register at http://ambar.org/professorscorner
Our October program, “Current Issues in Common Interest Communities,” features three outstanding scholars and three timely topics in the field of common interest development.
Paula Franzese is the Peter W. Rodino Professor of Law at Seton Hall University School of Law in Newark, NJ. Prof. Franzese will explore the uneasy intersection of takings law and shorefront redevelopment in the context of the New Jersey Supreme Court’s recent decision in Borough of Harvey Cedars v. Karan. In this case, a New Jersey shorefront town used its takings powers to condemn part of a family's oceanfront property to build an enhanced 22-foot-high dune to protect against the sorts of calamities wrought by Superstorm Sandy. Although the dune provides protection against future storm damage, it partially blocks the home's beach and ocean views. A jury’s award of $375,000 for reduction in view and value was reversed by the New Jersey Supreme Court, which held that the jury must assess not only the diminution in value suffered by the affected property owner but also the benefit conferred. To the extent that oceanfront owners reap the benefits, at taxpayers’ expense, of the dunes’ protection, how should that benefit be quantified appropriately to accommodate the loss of owners’ investment-backed expectations?
Shelby Green is an Associate Professor of Law at Pace Law School in White Plains, NY. Prof. Green will discuss the appropriate role of alternative dispute resolution within a common interest community. Disputes within CICs are inevitable, but their amicable and efficient resolution is not. Prof. Green will discuss two California cases, Chapala Management Corporation v. Stanton, 186 Cal. App. 4th 1532 (2010) and Grossman v. Park Fort Washington Ass’n, 212 Cal. App. 4th 1128 (2012), and how the cases demonstrate that two formal mechanisms—(1) the deferential standard of review (the business judgment rule) over decisions by managing boards and (2) the potential award of attorneys’ fees to the prevailing party—fail in their aim to channel disputes away from courts. Prof. Green will also discuss whether current reform proposals, such as statutory ombudsman programs and ADR requirements as a prerequisite to suit, can readily facilitate the need for more amicable and efficient dispute resolution within CICs.
Andrea Boyack is an Associate Professor of Law at Washburn University School of Law in Topeka, KS. Prof. Boyack will discuss the extent to which the law should enforce transfer restrictions in common interest declarations. The law has traditionally enforced such transfer restrictions despite their impact on alienability, viewing such restrictions as appropriate means to address or control maintenance of property within the community and behavior of the community residents. Prof. Boyack will argue that these concerns are better directly controlled through community use regulations and that courts should invalidate covenant restrictions that unjustifiably constrain the right to transfer, particularly when the community’s legitimate objectives could be accomplished through less intrusive means.
Register for this FREE webinar at http://ambar.org/professorscorner!
Thursday, October 4, 2012
A couple weeks ago, the South Africa Supreme Court issued a landmark ruling in a case involving Mugabe’s controversial land reform program in Zimbabwe. The Court ruled that a white Zimbabwean farmer (Mike Campbell) who has been dispossessed by the government could take possession of government property as compensation. The case and the context of the farmer’s dispossession offer particularly troubling illustrations of how the postcolonial dilemma regarding land reform has unfolded in Zimbabwe.
Zimbabwe and the Dilemma of Postcolonial Land Reform, briefly
While many postcolonial states (for example, South Africa and India) struggled during the early years of their independence with how to enact land reform and simultaneously recognize a right to property (in a context of concentrated elite landholdings), Zimbabwe’s experience with land reform has been particularly inequitable and violent.
Unlike many other postcolonial states, the newly independent government of Zimbabwe had its hands tied when it came to distributing land to the large numbers of landless citizens. As a condition of independence in 1980, Zimbabwean leaders agreed to protect the large arable tracts of land held by
white landowners for ten years under the Lancaster House Agreement with Britain. After the ten-year period, the Zimbabwe government could compulsory acquire this land by providing compensation. (Britain agreed to provide some of the government compensation for both the voluntary sales during the first ten years and the compulsory acquisition afterwards.)
Unfortunately, when land reform was possible in the 1990s, the government took action very slowly, and often acquired land that was not ideal for farming. Then, in the early 2000s, the Mugabe government began to encourage violence and land invasions for personal gain through a change in law that allowed for “fast-track land redistribution”:
“To appease the landless masses and maintain political popularity, Mugabe's government officially encouraged veterans to occupy white-owned farms. In some instances, members of the army helped facilitate land grabs and police were told not to respond to landowners' complaints or to remove squatters. As a result of the land grabs, many white farmers and their black workers were killed or subjected to violent attacks.” (PBS)
“Mugabe. . . present[ed] the policy as a “redistribution” of land to the poor and as a triumph over greedy white imperialists. In reality the policy, spearheaded by a ragbag army of armed thugs — the so-called “war veterans” — was a ruse to cement Mugabe’s hold on power through the distribution of patronage. It thus became a scramble for the plum, mainly (though not exclusively) white-owned, estates among the country’s elite, most of whose members had little interest in farming.” (Telegraph)
Not surprisingly, this “program” did little to alleviate the vast inequity of landholdings throughout the country. In 2002, Human Rights Watch reported that:
“The fast track program has . . . violated rights to equal protection of the law, nondiscrimination, and due process. The violence accompanying land occupations has created fear and insecurity on white-owned commercial farms, in black communal areas, and in “fast track” resettled areas, and threatens to destabilize the entire Zimbabwean countryside.” (Human Rights Watch)
As a result of this violence, Zimbabwe, a once-richly agricultural country, is now dependent on food aid.:
"Farms seized in Zimbabwe often have landed up in the hands of Mugabe's cronies and inner circle and have been left to lie fallow, turning the country that once was the breadbasket of the region into a net food-importer where the poor often go hungry." (Associated Press)
The Case of Mike Campbell’s Farm
In 1974, Mike Campbell, a white South African, moved to then-Rhodesia and purchased the Mount Carmel farm. He expanded on it subsequently, and built it into a profitable enterprise. In his obituary last year, the Telegraph noted that
He “plant[ed] mangoes, citrus trees, maize, tobacco and sunflowers, establish[ed] a herd of Mashona/Sussex cattle and dedicat[ed] a large area to a wildlife reserve, complete with herds of giraffe, impala and other animals. Their Biri River Safari Lodge became a popular tourist destination.
Campbell was described as a model employer, and by the end of the 1990s Mount Carmel farm was the largest mango producer in Zimbabwe, helping to generate much-needed export earnings. The farm sustained the livelihoods of more than 500 people...”
During the violence that ensued throughout the 2000s, Campbell’s farm was repeatedly invaded and significantly damaged. Attempts to gain relief in Zimbabwean courts did not yield results. In 2007, he brought his case to the inter-governmental Southern African Development Community (SADC) Tribunal, the highest court in the region. Before that court issued its judgment (in favor of Campbell and other dispossessed white farmers), Campbell and his family were kidnapped and tortured. (He passed away last year as a result of deteriorated health caused by the torture and did not live to see the recent judgment from South Africa.)
The ruling from the South African Supreme Court attempts to enforce the SADC Tribunal’s order.
The Recent Ruling from the South African Supreme Court
On September 20, South Africa's Supreme Court ruled that:
“[A] white Zimbabwean farmer can take possession of a Zimbabwe government property to compensate for the seizure of his farm.
. . .
A tribunal of the Southern African Development Community in 2008 ruled that the takeovers of white-owned farmland in Zimbabwe were illegal and racist. President Robert Mugabe's government argued it was part of a land reform process to redress colonial wrongs. Hundreds of farmers were forced off their property in often violent government-sponsored seizures.
Zimbabwe refused to act on the tribunal's order to restore the farms to their owners, and the Southern African community dissolved the tribunal earlier this year.
In 2010, a South African High Court attached a Zimbabwe government property in Cape Town to satisfy the tribunal's order for punitive costs to pay for farmer Mike Campbell's legal expenses.
[The recent] dismissal upholds that ruling.” (Associated Press)
Enforcing this ruling will be a challenge in Zimbabwe – the Zimbabwean government has already “dismissed” it. Even if it is enforced, it sidesteps the issues of the thousands of landless black Zimbabweans and farm workers for whom a path to property, much less protection of that
property, has never been available.
Priya S. Gupta
For more on Mike Cambpell’s story (including the lawsuit), readers are encouraged to watch the 2010 film, Mugabe and the White African. The film, which is not without fault, especially with regards to its race, gender, and historical framing, does provides some visual context to the legal case and what has been at stake.
Wednesday, June 6, 2012
As I mentioned last month, the Real Property Trust and Estate Law Section of the ABA will host monthly "Professor's Corner" Conference Calls featuring three property professors who will discuss recent cases. You do not need to be a member of the section or the ABA to participate in the call, but we certainly hope that you will consider joining.
The June call will be held on June 13th at 12:30 eastern/11:30 central and so on. The call-in information is:
Dial in number: 866/646-6488
Participant Pass code: 9479109954
I will moderate the June call, which will feature:
Ray Brescia, Visiting Clinical Associate Professor of Law at Yale, currently on leave from Albany Law, will discuss recent developments in "Reverse Redlining" litigation in the wake of the financial crisis. He will focus on recent settlements of actions against Wells Fargo and Countrywide Financial, and provide a brief overview of other ongoing litigation.
Shelby Green, Associate Professor at Pace Law School will discuss Italian Cowboy Partners, Ltd. v. The Prudential Ins., Co. Of Am., 341 S.W.3d 323 (Tex. 2011). In this case, the court considered whether disclaimer-of-representations language in a lease contract precludes a fraud in the inducement claim.
John V. Orth, William Rand Kenan Jr. Professor of Law at University of North Carolina School of Law will discuss RBS Citizens, N.A. v. Ouhrabka, 30 A.3d 1266 (Vt. 2011) in which the court considered a creditor’s challenge to the doctrine of tenancy by the entireties.
If you are interested in participating in future calls, please let me know!
Wednesday, November 9, 2011
Harrison v. Mayor and Board of Alderman of City of Batesville (Supreme Court of Mississippi)
Facts: A gravel company applied for a zoning variance to expand its mining operation to property adjacent to its current operation. Neighboring property owners opposed the action. The mayor and city board of aldermen approved variance, with certain restrictions. Property owners appealed.
Holding: The company failed to manufacture evidence of unnecessary hardship required for zoning variance, and the board of aldermen failed provide specific findings of fact and conclusions of law to support their decision.
Wednesday, October 19, 2011
Westpac Aspen Investments, LLC v. Residences at Little Nell Development, LLC (Colorado Ct. of Appeals)
Issue: Does the merger of title doctrine extinguish a prescriptive easement when the sole owner of the servient estate holds title to the dominant estate in joint tenancy with his spouse?
Holding: No. The common ownership necessary to trigger the merger doctrine “must be absolute, not defeasible or determinable, and coextensive, rather than owned in different fractions.” A joint tenant, however, lacks absolute dominion over the jointly held property. “Upon the death of one of the co-tenants in joint tenancy, the entire undivided interest of the deceased passes, by operation of law, to the surviving co-tenant.” Moreover, the joint tenant may not alienate, encumber, or transfer the interest of the other joint tenant.
Wednesday, October 5, 2011
Shashoua v. Zien (Massachusetts Land Court)
Background: Parties are next door neighboors and were "best of friends." Shashoua, however, brings suit claiming adverse possession over a slice of Zien's backyard. The case does a very nice job laying out the requirements for adverse possession and demonstrates how a trial judge teases out whether one party's use of property is "adverse" or "continuous."
Holding: The Judge found that Shashoua's use (cutting grass, planting flowers, children playing, walking dogs, setting up a tent for a bar mitzvah party) failed to meet the continuos and adverse prongs of the test for adverse possession. The judge also ordered Shashoua to remove improvements she had installed that encroached on Zien's land.
Wednesday, September 28, 2011
Harrington v. Metropolis Property Management Group, Inc. (Supreme Court of New Hampshire)
Background: Harrington signed a lease commencing on July 1, 2007, and ending “60 days after written notice has been given.” In August of 2009, Harrington, angry about the barking of a neighbor's dog, gave 30 days notice and vacated the premise. The property management company claimed Harrington violated the terms of the lease and retained his security deposit. Harrington sued to recover the deposit, citing a series of New Hampshire laws indicating that: “30 days' notice shall be sufficient in all cases.”
Holding: "The use of the term “sufficient” in the statute connotes that the legislature intended that thirty days be the minimum period of time necessary for such notice." Nothing in the state's law "prevents parties to a lease from agreeing to a longer notice period than that provided by the statute to secure greater protection for themselves."
Wednesday, September 14, 2011
Background: This case is a real life, modern example of a landlocked piece of property and an owner seeking an easement by necessity. Lewis owned a landlocked parcel and brought a private condemnation proceeding against Glenelk to obtain an easement over Glenelk's land.
Holding: The party seeking the private condemnation must state the purpose of the condemnation in a way that enables the trial court to examine the scope and necessity of the proposed easement.
Thursday, June 23, 2011
Over at Land Use Prof, Tim Mulvaney has a nice write-up on PPL Montana v. State of Montana, a recent property/enviro case that the Supreme Court has decided to grant cert on. The central issue in the case is who owns the beds and banks of three Montana rivers that play a significant role in state's economy. Whether the rivers are privately owned or belong to the state under the public trust doctrine depends on whether the rivers were “navigable” when Montana was admitted to the Union in 1889.
As Tim points out, there may also be a looming judicial takings issue. Tim writes: "In its petition for certiorari, PPL Montana cited to Stop the Beach in asserting that, '[b]ecause [the Montana Supreme Court was] the operative force behind this land transfer [from private ownership to state ownership], it remains to be seen whether property owners in general have a Takings Claim or due process objection to [such a] land grab.'" Moreover, the Cato Institute is arguing that the "Montana Supreme Court adopted a retroactive rule that destroyed title already accrued in violation of the Takings Clause," and calls the Court’s ruling a “thinly-disguised judicial taking.”
Wednesday, May 4, 2011
For all those following the happenings in Severance v. Patterson (important case on the Texas Open Beaches Act), our friends at Land Use Prof have a few updates:
2. Matt Festa gives his two cents and a posts video of a panel discussion on the case.
Monday, April 4, 2011
Scott Kieff (George Washington) has posted Removing Property from Intellectual Property and (Intended?) Pernicious Impacts on Innovation and Competition SSRN. Here's the abstract:
Commentators have poured forth a loud and sustained outcry over the past few years that sees property rule treatment of intellectual property (IP) as a cause of excessive transaction costs, thickets, anticommons, hold-ups, hold-outs, and trolls, which unduly tax and retard innovation, competition, and economic growth. The popular response has been to seek a legislative shift towards some limited use of weaker, liability rule treatment, usually portrayed as “just enough” to facilitate transactions in those special cases where the bargaining problems are at their worst and where escape hatches are most needed. This essay is designed to make two contributions. First, it shows how a set of changes in case law over just the past few years have hugely re-shaped the patent system from having several major, and helpful, liability-rule-pressure-release-valves, into a system that is fast becoming almost devoid of significant property rule characteristics, at least for those small entities that would most need property rule protection. The essay then explores some harmful effects of this shift, focusing on the ways liability rule treatment can seriously impede the beneficial deal-making mechanisms that facilitate innovation and competition. The basic intuition behind this bad effect of liability rules is that they seriously frustrate the ability for a market-challenging patentee to attract and hold the constructive attention of a potential contracting party (especially one that is a larger more established party) while preserving the option to terminate the negotiations in favor of striking a deal with a different party. At the same time, liability rules can have an additional bad effect of helping existing competitors to coordinate with each other over ways to keep out new entrants. The essay is designed to contribute to the literature on IP in particular, as well as the broader literatures on property and coordination, by first showing how a seemingly disconnected set of changes to the legal rules impacting a particular legal regime like the patent system can have unintended and sweeping harmful consequences, and then by exploring why within the more middle range of the spectrum between the two poles of property rules and liability rules, a general shift towards the property side may be preferred by those seeking an increase in access and competition.
Friday, March 18, 2011
Thursday, March 17, 2011
Troy Rule (Missouri) has posted Airspace in a Green Economy on SSRN. Here's the abstract:
The recent surge of interest in renewable energy and sustainable land use has made the airspace above land more valuable than ever before. However, a growing number of policies aimed at promoting sustainability disregard landowners' airspace rights in ways that can cause airspace to be underutilized. This article analyzes several land use conflicts emerging in the context of renewable energy development by framing them as disputes over airspace. The article suggests that incorporating options or liability rules into laws regulating airspace is a useful way to promote wind and solar energy while still respecting landowners' existing airspace rights. If properly tailored, such policies can facilitate renewable energy development without compromising landowners’ incentives and capacity to make optimal use of the space above their land. The article also introduces a new abstract model to argue that policymakers should weigh the likely impacts on both rival and non-rival airspace uses when deciding whether to modify airspace restrictions to encourage sustainability.
Monday, November 8, 2010
Over at the Land Use Prof blog, Matt Festa has a great post on Severance v. Patterson, an important Texas Open Beaches Act case recently decided by the Florida Supreme Court.
[Comments are held for approval, so there will be some delay in posting]
Wednesday, September 1, 2010
Distinguishing Between Private-Public and Private-Private Transfers in Judicial and Regulatory Takings
I've been working on a fairly lengthy post-Stop the Beach article on judicial takings. I will probably post the article on SSRN in a week or so. In the meantime, I wanted to blog about a distinction that is at the core of my arguments in the article. As I explain further below the fold, government actions that mandate the transfer of property interests from private property owners to the public ("private-public transfers") should be distinguished from government actions that mandate the transfer of property interests between private persons ("private-private transfers"). I argue that judicial takings, and regulatory takings more broadly, should apply only to private-public transfers, but not to private-private transfers.
I touched on this distinction way back in my first post on the grant of cert in Stop the Beach (see point 5). Immediately after Stop the Beach was decided, Jerry Anderson asked the following question:
I am curious about Justice Scalia's position that courts may not eliminate "established private property rights." What do such rights consist of? For example, assume that a state court decides to move from a "good faith" approach to adverse possession to an "objective" standard, which will allow some possessors to prevail, even though they knew the land they were occupying was not theirs. This is a standard "evolution" of common law, yet it does, under Justice Scalia's rigid formulation, result in a party losing property that it would not have lost under the old common law test. Is that a "taking"? Can the court NOT change such a common law test without having to compensate property owners?
To me, such a change in adverse possession law involves a private-private transfer, and should not fall within the judicial takings analysis. In excellent posts taking up Jerry's question, Lior Strahilevitz and Eduardo Penalver both discussed the private-private nature of the change in adverse possession law.
What follows below the fold is a very lengthy treatment of this issue. The rest of the post is taken from a few sections of my draft article, with the footnotes removed. I'd very much welcome any comments on the argument. In particular, I'd be interested in references to similar arguments, if any, that have been made in the existing regulatory takings literature.
Friday, June 25, 2010
The New York Court of Appeals today upheld the use of eminent domain for an expansion of Columbia University. Ilya Somin comments at the VC; Matt Festa comments at the Land Use Prof Blog; Tim Sandefur comments at the PLF's blog; and Robert Thomas comments at the Inverse Condemnation Blog.
[Comments are held for approval, so there will be some delay in posting]
Thursday, June 17, 2010
The Supreme Court today ruled in the Stop the Beach judicial takings case. In an opinion by Justice Scalia, the Court rejected the judicial takings claim. The Court's judgment was unanimous, but there were fragmented opinions on various issues, as described further below. For background on the case, see this post. For a recap of the oral argument, see this post. For a great description of the social conflicts behind the dispute, see this article from the New York Times Magazine.
I will be updating this post with analysis of the Court's opinions and with links to commentary about the case.
A Quick Summary of the Opinions
Justice Scalia delivered the Opinion of the Court, which was unanimous, for Parts I, IV, and V. These parts together hold that the Florida Supreme Court's opinion was sufficiently consistent with Florida caselaw that the takings claim should be rejected. Justice Scalia's opinion, however, is not the Opinion of the Court for Parts II and III. These Parts reach the issue of judicial takings, and assert that under the correct circumstances, a judicial action can violate the takings clause. Justice Scalia was joined in these Parts by the Chief Justice and Justices Thomas and Alito. Justice Stevens did not participate in the case (because he owns Florida beachfront property), and the four other Justices (Kennedy, Ginsburg, Breyer, and Sotomayor) declined to join in Parts II and III of Justice Scalia's opinion. Justice Kennedy wrote a concurring opinion, joined by Justice Sotomayor, and Justice Breyer wrote a concurring opinion, joined by Justice Ginsburg. Together, these concurrences suggest that it was unnecessary to reach the issue of whether it is ever possible to have a judicial taking. So on this critical issue, the Court split 4-4. Because of the tie, Justice Scalia's opinion is not controlling precedent on this issue. The overall issue of whether there can ever be a judicial taking is therefore still open as a matter of Supreme Court caselaw.
(1) What is the standard for judicial takings? As noted above, the big question of whether there can ever be a judicial taking is still open. If the ultimate answer to this question proves to be "yes", what would be the standard for deciding whether there is a judicial taking? Four justices objected to even considering this issue, but Justice Scalia's opinion proposes the following standard: "If a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property . . ." (Slip op. at 10, emphasis original). Later in his opinion (at 23), Justice Scalia rejects the standard suggested by Justice Stewart's Hughes v. Washington concurrence that a decision that "constitutes a sudden change in state law, unpredictable in terms of relevant precedents" would be a taking. So the focus of Justice Scalia's proposed standard is on whether there is an established right of private property, not on whether the outcome was predictable. There might often be a congruence between clear establishment of a right and predictability of an outcome, but Justice Scalia gives a few examples (at 23-24) where that might not be the case.
(2) What is the future of judicial takings litigation? One fear about allowing judicial takings is that the federal courts will become the courts of last resort for property disputes. Justice Scalia suggests that a litigant who loses before a state supreme court can only raise a judicial takings challenge through a cert petition to the United States Supreme Court. (Slip op. at 23). But property owners who were not a party to the original litigation could challenge the state supreme court's decision as a judicial taking in the lower federal courts: "And where the claimant was not a party to the original suit, he would be able to challenge in federal court the taking effected by the state supreme-court opinion to the same extend that he would be able to challenge in federal court a legislative or executive taking previously approved by a state supreme-court opinion." (at 23). I am not at all an expert on Williamson County and San Remo, so I can't yet fully evaluate the impact of this statement. And, of course, Justice Scalia's opinion is not binding on this point. But Justice Scalia certainly seems to invite property owners to (a) bring cert petitions claiming judicial takings if they lose in state supreme court; even though cert petitions have a low chance of being granted, a petition claiming a judicial taking would get a sympathetic read from at least some of the Justices' chambers; and (b) bring lower court judicial takings cases if they were not litigants before the state supreme court. These invitations, combined with the lack of clear guidance on any of these issues from the Court, suggest that we will see a lot of litigation on these issues in the near future.
[UPDATE: Some further thoughts about the litigation that we're likely to see. First, I think that state supreme courts might be especially careful after Stop the Beach to paper up their property opinions well. As the actual outcome in Stop the Beach showed, state property law often allows a substantial amount of wiggle room. Another way of putting this is that state law property rights might not always be as clear as many people suppose. Second, it may be that the statute of limitations has not yet run on judicial takings claims based on some recent state supreme court decisions. I don't have any specific case in mind, but property owners who were not parties to the initial litigation might start bringing claims in the lower federal courts. Third, although the denial of cert would preclude a takings claim by the litigant in the state supreme court, the cert denial would have no precedential value, so every cert denial in a judicial takings case might be followed by claims brought in the lower federal courts by similarly situated property owners. Fourth, these claims are going to be very challenging for the lower federal courts. Not only is the standard for judicial takings unclear, but the procedural propriety of bringing judicial takings claims in the lower federal courts is not even clear -- Justice Scalia suggested that these claims could be brought, but his opinion is not controlling precedent on this point. It could turn out in some case down the road that these kind of claims cannot be brought in federal court. Faced with this mess, lower federal courts would do well to do what the Supreme Court ultimately did in Stop the Beach: look for some precedential support for the state supreme court opinion that is being challenged, and reject the constitutional challenge.]
(3) Justice Kennedy's concurrence could be very important. Justice Kennedy raises a number of interesting issues in his concurrence. I want to focus for now on just one. Consistent with his approach in a number of other takings cases, Justice Kennedy has advocated for a relatively robust role for due process analysis. The most important statement in Justice Kennedy's concurrence might be this: "The Court would be on strong footing in ruling that a judicial decision that eliminates or substantially changes established property rights, which are a legitimate expectation of the owner, is 'arbitrary or irrational' under the due process clause." (Slip op at 4). Like Justice Scalia's proposed judicial takings test, this one focuses on clearly established property rights. So it is possible to count six votes for the proposition that a state supreme court opinion that eliminates clearly established property rights is unconstitutional: the Chief Justice and Justices Scalia, Thomas, and Alito on judicial takings grounds, and Justices Kennedy and Sotomayor on due process grounds. I also think it is very interesting that Justice Sotomayor joined Justice Kennedy's opinion, rather than Justice Breyer's. This may be a hint that Justice Sotomayor may be more protective of property rights than many of the Court's liberal justices have been over the last few years. It is worth remembering in this context that both Justice Brennan and Justice Marshall wrote a number of takings opinions that were very pro-property owner (e.g., the San Diego Gas & Electric dissent by Justice Brennan, the Loretto opinion by Justice Marshall).
(4) Justice Stevens may have been missed by the pro-government side. Justice Stevens has been the intellectual leader of the pro-government side on regulatory takings issues since at least 1987. This is speculation (though informed speculation), but I would have expected Justice Stevens to have made the case against recognizing a doctrine of judicial takings had he not recused himself. Justice Breyer was satisfied with making the case that this issue shouldn't be decided now. I think that Justice Stevens would have said more. [UPDATE: Tony Mauro at the BLT has some additional thoughts on the impact of Justice Stevens' recusal].
(5) Potential impact on the broader regulatory takings issue. There are two notable things about the plurality portion of Justice Scalia's opinion for regulatory takings more broadly. First, it continues to emphasize the concept of equivalence that has been a theme in recent regulatory takings cases. By "equivalence" I mean the idea that a regulation or other government action is a taking if it is the equivalent of an exercise of eminent domain. (See slip op. at 8). This idea was a major theme in Lingle v. Chevron. I think that this is a potentially important concept in that it may circumscribe the scope of regulatory takings - regulations that lead to a total diminution in value of property are easy to equate to an exercise of eminent domain; regulations that result in a lesser diminution in value seem much less like the equivalent of an exercise of eminent domain. Second, Justice Scalia's opinion includes a shot across the bows of state supreme courts that might want to use the background principles exception from Lucas to insulate a regulatory action from a takings claim. After quoting the relevant language from Lucas, he states that "A constitutional provision that forbids the uncompensated taking of property is quite simply insusceptible of enforcement by federal courts unless they have the power to decide what property rights exist under state law." (Slip op. at 22). In other words, in Justice Scalia's view, federal courts shouldn't be too deferential to state court characterizations about the scope of property rights.
(6) Some classic Scalia. In taking on Justice Breyer's argument that there was no need to address the core judicial takings issues, Justice Scalia makes a reference to a classic tongue twister: "JUSTICE BREYER must either (a) grapple with the artificial question of what would constitute a judicial taking if there were such thing as a judicial taking (reminiscent of the perplexing question how much wood would a woodchuck chuck if a woodchuck could chuck wood?) or (b) answer in the negative what he considers to be the 'unnecessary' constitutional question whether there is such a thing as a judicial taking." Justice Scalia treats the question of the woodchuck as open, but it of course has an answer: a woodchuck would chuck as much wood as a woodchuck could chuck if a woodchuck could chuck wood.
(7) The Euclid cameo. Michael Allan Wolf, who knows a lot about Euclid, just pointed out to me that Justice Scalia badly miscites Euclid - see the slip opinion at p. 12, describing Euclid in a parenthetical as "recognizing that block zoning ordinances could constitute a taking, but holding that the challenged ordinance did not do so." As Michael pointed out, this is clearly wrong on a number of levels. Most importantly, in my humble opinion, is that Euclid is not a takings case. It is a substantive due process case, as Justice Kennedy suggests in his concurrence (slip op. at 3). I really don't think that it is helpful to Justice Scalia's broader agenda to treat Euclid as a takings case, and in any event it is simply wrong to do so.
A couple of random points. First, in my first big post about this case, I wrote: "I would guess that Justice Scalia was instrumental in obtaining the cert grant. I predict that the Supreme Court will find a taking in Stop the Beach and that Justice Scalia will write the opinion of the Court." Well, I was at least half right. My predictions after oral argument were a little more on target re: the outcome. Second, it has frequently been observed that blogs have compressed the cycle of analysis on Supreme Court opinions. Having just tried to put together some cogent thoughts in about three hours really drove that point home for me. Third, Justice Scalia showed academics no love at all, and did not cite the leading law review articles on judicial takings. Justice Kennedy did cite some, but not all, of the leading articles on point. Fourth, I noted before that I advocated in the past (albeit as a law student) for federal judicial takings review of state court property decisions. Here is what I said in my student note (63 Fordham L. Rev. at 1881-82) on the judicial takings standard:
The Court should explicitly adopt Justice Stewart's Hughes v. Washington test, while avoiding the problematic "reasonable expectations." State court findings in just compensation cases should be reviewed to ensure that they define property using legitimate statutory and common law precedent, rather than using the inherent flexibility of common law to define property rights out of existence. If the state courts previously have recognized a property interest, either between private individuals or between an individual and the state, then the state cannot destroy that interest without compensation. Such a requirement would accommodate the desire to have the state's property law serve as the primary source of the definition of property, while maintaining the protection of liberty required by the Just Compensation Clause.
This is somewhat close to the standard that Justice Scalia proposed, which is kind of cool. The problem is that I'm not sure that I still agree with what I said as a law student. I'll have to sort that out sometime soon.
Further thoughts on the case from around the blogosphere and the media (to be updated periodically):
Lior Strahilevitz has a thoughtful analysis of the question raised by Jerry Anderson (on the property listserv and in the comments here) at the University of Chicago Law School Faculty Blog.
Timothy Sandefur comments on the case at the Pacific Legal Foundation's blog. [UPDATE: Tim has a second post with some further thoughts on the case.]
Josh Blackman is happy that Justice Sotomayor may be more protective of property rights than Justices Breyer or Ginsburg.
Robert H. Thomas collects some links at the Inverse Condemnation Blog.
Ilya Somin comments on the case at the VC.
Ilya Shapiro of the Cato Institute discusses the case.
NPR's Nina Totenberg has a story on the case.
Steve Eagle comments here at PropertyProf.
UPDATING the list of commentary a few days later:
Eduardo Penalver has some excellent thoughts at Prawfs.
Tim Mulvaney has an op-ed on the case.
[photo of Destin, Florida beach via Wikicommons]
[Comments are held for approval, so there will be some delay in posting]
Friday, April 9, 2010
Earlier this week, the Supreme Court denied a petition for certiorari filed by Marshall Islanders seeking to reverse a 2009 ruling of the Federal Circuit. The case has a fascinating factual context and raises interesting questions about the relationship between the Takings Clause and sovereign immunity.
As explained here by the WSJ Law Blog, the litigation was based on damages resulting from U.S. nuclear testing in the Marshall Islands in the 1940s and 1950s. In the early 1980s, groups representing descendants of the Bikini and Enewetak Atolls sued the federal government for just compensation, asserting that the destruction of land occassioned by the testing constituted a taking of property under the Fifth Amendment. During the course of this litigaiton, the United States and Marshall Island governments entered a Compact of Free Association, subsequently adopted by Congress, that purported to settle the takings claims. In exchange for the United States' acceptance of responsibility and the establishment of a tribunal to administer the just compensation claims, the Marshall Islands agreed to settle all past, present, and future claims based on the testing. Additionally, the compact documents provided that no United States court would have jurisdiction to entertain such claims.
The tribunal subsequently awarded a total of $949,210,000 to the plaintiffs, even though Congress only appropriated $45,750,000 for payment of awards. See People of Bikini v. United States, 554 F.3d 996, 998 (Fed. Cir. 2009). To date, less than 1% of the tribunal's award has been paid, and only $1,000,000 remains in the claims fund. See id. In 2006, the plaintiffs again brought suit, asserting that they still had not received just compensation for the takings of their property. In 2009, the Federal Circuit affirmed a decision of the Court of Federal Claims to dismiss the suit, holding that the claims had been waived by the plaintiffs and that the federal courts had been stripped of jurisdiction to hear them in any event.
The cert briefs, which can be found on SCOTUSBlog (scroll to the bottom of the page), raise interesting issues concerning the Tucker Act, sovereign immunity, and the "self-executing" nature of the Takings Clause (for those who like that sort of stuff).
[Comments are held for approval, so there will be some delay in posting.]
Monday, March 29, 2010
I'm sorry to keep beating this drum, but when the news demands it . . .
Today the newswires and blogs are crackling with outrage over the 4th Circuit's ruling that the man who sued Westboro Church for demonstrating at his son's funeral must pay Westboro's court costs ("Should Phelps' vile attacks on dead soldiers be rewarded with court fees? Court says yes").
As I posted earlier (see post on 3/26, below) about the Westboro demonstrations, when behavior -- including the use of public property -- is legal but normatively unacceptable, the inability of legal institutions to prevent it (even if that inability is appropriate) can lead to popular outrage and dangerous informal sanctions. In the case of Westboro, it already has. Expect more.
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