Monday, July 23, 2018

John Nolon on Contemporary Issues in Teaching Land Use: Question 8: Hot Topics in Takings

While updating the recently released ninth edition to the casebook Land Use and Sustainable Development Law, the four co-authors engaged in numerous spirited discussions about teaching land use. We wanted to open this discussion to others to get their comments and thoughts as we continue to rethink the teaching of this important subject. Each month on this blog, we will introduce a new topic relevant to teaching land use. The topics will loosely follow our casebook chapters, and we are now up to Chapter 3. We'll explore each topic through four blog posts, one from each of us. We hope you find the discussion enriching, and encourage you to contribute to the conversation in the comments section below or off-line.  -- John Nolon, Patricia Salkin, Stephen Miller, & Jonathan Rosenbloom

Contemporary Issues in Teaching Land Use

Question 8:  Hot Topics in Takings

by John Nolon

While Stephen and Jonathan explore upcoming cases and concepts, my focus here is on the fundamental aspects of takings cases. I find that the basics are tough and need a patient hand to be turned so that students truly understand constitutionally protected property rights and remedies for their violation.  I spend a lot of time on Lingle, which, along with Palazzolo, handle the basics well.

In Lingle, the majority dispenses with the two-part, disjunctive Agins test, including the incomprehensible notion that a regulation can be a taking if fails to substantially advance legitimate state interests.  “Correcting course,” Mrs. Justice O’Connor, writing for the majority, properly characterizes that test as a due process standard. Understanding due process claims is as critical for students as understanding takings jurisprudence. Many, many of the cases in our book are disposed of on due process grounds, beginning with Euclid. These waters should not be cloudy and Lingle does an excellent job of separating due process from takings cases and explaining the prevailing rules of interpretation in each category.

The district court decision in Lingle held that a taking occurred because it found Chevron’s economist more credible than the state’s expert who argued that no state interest was advanced by the state’s control of rents charged to lessee-dealers by oil companies. It reasoned that the substantially advance test of Agins was violated because the law was ineffective and that a taking had occurred, even though no damages were proved. 

This is a can of worms. If there are no damages, what is the remedy if the Constitution provides that just compensation must be paid for the taking by the offending regulating entity?  What does the Constitution mean when it says no person shall be deprived of property without due process of law?  How is that different from the provision that protects private property from being taken for a public use, without just compensation? What is a court doing choosing the plaintiff’s expert over the one relied on by the state legislature, to which it owes deference?.   In addition to dispensing with the substantially advance rule for takings, O’Connor also reminds us that courts do not heavily scrutinize substantive due process challenges to government regulation?

Having clarified takings waters this much, the Justice further explains that there are four categories of takings including per se cases like Loretto and Lucas (“two relatively narrow categories”) and Penn Central, which articulates specific factors for resolving regulatory takings claims that do not fall within the other categories.  The fourth type of takings case she mentions is “the special context of land-use exactions” that arise mostly in context of conditions imposed by adjudicatory bodies, like planning boards, as part of the project review and approval process. Although Koontz rendered this fourth category fundamentally cloudy, the categories themselves are clear enough to guide law students’ understanding of this field of law. 

In explaining the Penn Central factors, Justice O’Connor refers us to the Court’s 2001 Palazzolo case, in which a developer was approved to build one residence on two dryland acres in a 20 acre tidal wetland site that he owned.  He had asked the relevant agency for permission to build 74 homes on individual lots and claimed damages of over $3 million, which he claimed constituted a total taking under Lucas. The Court disagreed finding that “the petitioner failed to establish a deprivation of all economic value [one of the Penn Central factors] for it is undisputed that the parcel retains significant worth for the construction of a residence.” In other words, the Court considered the Lingle takings categories and placed this in the Penn Central rather than Lucas bucket.  On remand, the Rhode Island Superior Court affirmed that there was no taking -- under Lucas there was no total taking and under Penn Central the petitioner’s investment backed expectations were not frustrated.  

Although takings law is anything but free of nuance and ad hoc applications, there is a degree of clarity in these categories and the Lingle decision. .  Most takings cases fall into the Penn Central category, rather than the relatively narrow per se categories, unless they involve an exaction.  Within Penn Central, the Court imposes the burden of proving the taking on the challenger, defers to legislative discretion, and presumes the validity and constitutionality of its actions.  If the other categories are narrow or specific and most takings cases are decided under Penn Central,  one would expect that takings claims are hard to win.  This is affirmed in a recent William and Mary Law Review article by Professors James Krier and Stewart Sterk who conduct “An Empirical Study of Implicit Takings.” They find that “takings claims based on government regulation almost invariable fail.” 

If students can be taught this much, they will know more than land use attorneys who advise their clients that regulations that prevent the highest and best use of their properties are takings or that simple diminution of property values caused by regulations should be actionable under the takings clause.  Unfortunately there are too many such cases, suggesting that lawyers don’t understand the basics or are misrepresenting the law to their frustrated clients.

The ninth edition of Land Use and Sustainable Development Law, is now available for the 2018-19 academic year.  Feel free to contact any of the co-authors if you would like to discuss the book--or just teaching land use law in general.

Land Use Book Image

Previous posts in the Contemporary Issues in Teaching Land Use series

Question 1: Teaching the Crossroads Where Nuisance & Zoning Meet [Rosenbloom | Nolon | Salkin | Miller]

Question 2:  Teaching the 1916 NYC Zoning Ordinance and the Standard State Zoning Enabling Act [Rosenbloom | Nolon | Salkin | Miller]

Question 3:  Teaching the Economics of Land Use Regulation and Ethics [ Salkin | Nolon | Miller | Rosenbloom]

Question 4:  Teaching about the Comprehensive Land Use Plan [Salkin | Nolon | Miller | Rosenbloom] 

Question 5:  How to Create a Practical Context for Learning? [Nolon | Miller | Rosenbloom | Salkin]

Question 6:  Introducing the Common Law and the Power of the Pen [Salkin | Miller | Rosenbloom | Nolon]

Question 7:  How to Teach the Contract Transformation in Land Use Regulation?  [Miller | Nolon | Rosenbloom | Salkin

Question 8:  Hot Topics in Takings [Miller | Rosenbloom | Nolon | Salkin]

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