Friday, February 10, 2006

Craigslist and the FHA

David Bernstein at the VC has a very interesting post on a suit against Craigslist for violating the anti-discrimination provisions of the FHA.  Discrimination in ads for roommates is always a big topic of discussion when I cover the FHA, and this case might make a good teaching tool for first-year property.  Like Bernstein, I don't have an informed view of whether the FHA should apply to on-line forums like Craigslist, but the case does highlight the consequences of not explicitly exempting roommates and houseshares from the advertising provisions of the FHA.

Ben Barros

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February 10, 2006 in Teaching | Permalink | Comments (0) | TrackBack (0)

Thursday, February 9, 2006

Iowa Restrictions on Sex Offender Residency

Over at Sentencing Law and Policy, Douglas Berman has a very interesting post on a statement by an Iowa prosecutors' group opposing Iowa's sex offender residency restrictions.  (A while ago, I linked to a NPR story that illustrates just how out-of-control these restrictions have become; I've also posted on private covenants against sex offenders).  Berman's post includes a number of useful links, including a link to the document issued by the Iowa County Attorney's Association.  Also, over at Concurring Opinions, Dan Filler has some good thoughts on the issue.

Ben Barros

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February 9, 2006 in Land Use | Permalink | Comments (0) | TrackBack (0)

Plantation Workers and Their Homes

Alfred Brophy sent along a pointer to an article in the Hawaii Advertiser about the impact of Del Monte pulling out of the Hawaii pineapple market.  To me, the most interesting thing about the story is the suggestion that pineapple workers might be able to buy for a below-market price the homes they have been renting from Del Monte:

If developer Peter Savio's idea becomes reality, pineapple workers who live in plantation housing at Kunia Camp will not be thrown into O'ahu's pricey real estate market when Del Monte Fresh Produce pulls out of the Islands.

Savio has been working for the past year to allow other Del Monte workers to buy 63 plantation homes at nearby Poamoho Camp at about one-third market price. Yesterday, Savio said he is putting together a nearly identical plan for the Del Monte workers at Kunia Camp in Central O'ahu who would otherwise likely lose their homes along with their jobs.

Del Monte workers who live in Kunia Camp's 70 to 90 plantation homes pay $200 to $300 in monthly rent, Savio said.

He estimated the homes are worth $150,000 to $200,000. According to Savio's plan, Del Monte pineapple workers would be able to buy the homes and land for $50,000, with no money down.

As Brophy noted, this scenario raises some issues that come up in the first year Property course.  To me, the efforts to allow the workers to stay in their homes bring to mind both Radin's personhood theory and Singer's reliance theory.  But what is particularly interesting to me is that it seems that a potential developer, rather than the former employer/landlord Del Monte, is making the effort to allow people to stay in their homes.  Assuming that the developer is a rational economic actor, I'd guess that he must see a benefit in allowing the workers to buy their homes at such dramatically below-market prices.  Perhaps this benefit would be in the form of goodwill that would reduce local community and regulatory opposition to his development plan.  This in turn makes me wonder whether a similar dynamic is present in condo-conversion situations.

As always, comments are welcome, but I'd particularly welcome thoughts from anyone who has more detail about what might be happening with the Del Monte property.

Ben Barros

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February 9, 2006 in Property Theory, Real Estate Transactions | Permalink | Comments (2) | TrackBack (0)

Cole on Kelo and Planning

Daniel H. Cole (Indiana University School of Law) has posted Why Kelo is Not Good News for Local Planners and Developers on SSRN.  Here's the abstract:

When the Supreme Court announced its 2005 decision in Kelo v. City of New London, few legal scholars were surprised at the outcome, which was premised on precedents extending back to the middle of the 19th century. Legal scholars were surprised, however, by the intense political reaction Kelo caused (fueled substantially by Justice O'Connor's hyperbolic dissent), as property-rights advocates, legislators (at all levels of government), and media pundits assailed the ruling as a death knell for private property rights in America.

Kelo's combination of relative legal insignificance and high political salience makes it an interesting case study in cross-institutional dynamics, i.e., the study of how the combination (and recombination) of political, legal, economic, and social forces determine the content of our laws. In this case, the Supreme Court's legal ruling in Kelo generated a political controversy, which is leading to legislative changes in the law. Those legislative changes, in turn, will affect future court decisions.

The primary purpose of this article is to explain the aftermath of Kelo as a socio-legal phenomenon, which is every bit as important as (perhaps more important than) the Supreme Court's ruling in the case. By paying close attention to the political and legislative aftermath of Kelo, we can understand why the Supreme Court's decision is not good news for local planners and developers, who are finding it significantly more difficult to engage in urban (re)development throughout the United States. By contrast, the plaintiffs who lost the Kelo battle, may have won the battle to keep their homes.

This article also has a secondary purpose, which is the place Kelo and its political reception in a larger, comparative institutional context. That context (which I develop fully in Political Institutions, Private Property and Judicial Review: A Comparative Institutional Analysis, forthcoming 2007 in the Supreme Court Economic Review) examines how political bodies, as well as courts, substantially protect private property rights. Along with other evidence from the United Kingdom and the several United States, Kelo's aftermath supports the proposition that, even in the absence of constitutional protections assiduously enforced protected by judges, the institution of private property would almost certainly survive.

Ben Barros

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February 9, 2006 in Land Use, Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 8, 2006

Proposed Kelo "Compromise"

The Washington Post reports that the Mayor of New London has offered a compromise to four of the homeowners who are still resisting the Fort Trumbull redevelopment plan:

The mayor of New London, where a fight over government seizing property led to a controversial U.S. Supreme Court ruling, is proposing a compromise for a group of homeowners.

Under a plan presented to the City Council Monday night, four people whose homes were seized for a private development would be allowed to stay. The city would own their properties and the residents would have to pay the city to live there.

Unsurprisingly, the homeowners aren't interested:

One of the property owners who sued over the Fort Trumbull seizures, Susette Kelo, said the mayor's proposal shows that the houses and the private development can coexist. But she and another plaintiff, Michael Cristofaro, said they aren't interested in paying rent for homes they owned.

"The ongoing battle of the last eight years has not been to allow us to live in our homes and pay rent to the city of New London until we die," Kelo said.

Hat tip:  Larry Eubanks

Ben Barros

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February 8, 2006 in Takings | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 7, 2006

Taking Blighted Property To Give To A Religious Institution

The Pennsylvania Commonwealth Court (an intermediate appellate court) decided an interesting takings case yesterday.  As described by the court, the core issue was "whether the Redevelopment Authority of the City of Philadelphia may exercise eminent domain power to condemn a private homeowner's property, located in an area of North Philadelphia that was certified as blighted, and then turn over the acquired property to a purely private religious organization to construct and operate a private independent school."  In a 4-3 decision authored by Judge Doris A. Smith-Ribner, the majority held that the taking violated the Establishment Clause.  The court applied a three-factor Establishment Clause test :  "[A] legislative enactment does not contravene the Establishment Clause if it has a secular legislative purpose, if its principal or primary effect neither advances nor inhibits religion, and if it does not foster an excessive government entanglement with religion."

The application of the three-part test shows unequivocally that the Authority's taking contravened the Establishment Clause.  First, the Authority's primary purpose was to acquire land for the Hope Partnership to make it available for the construction and operation of a private school.  Although the Authority argued that no contract is yet executed between the Authority and the Hope Partnership, such evidence is immaterial where the redevelopment proposal included the religious organization as the developer, the Planning Commission approved the proposal, City Council enacted the required ordinance and the Authority then proceeded with its taking.  Second, the Authority's land acquisition for the Hope Partnership had a primary religious effect because it directly aided the religious organization's mission to provide faith-based educational services, among other things, to residents in blighted areas.  The land acquisition had the primary effect of advancing religion.  Third, there is no dispute that the Authority jointly worked with the Hope Partnership in effectuating the taking.  The evidence shows that the Hope Partnership designated the land that it wanted and requested the Authority to acquire it, and the Authority proceeded to do so.  This joint effort demonstrates the entanglement between church and state.

Judge Dan Pellegrini authored the dissent.  He first asserted that even if there was an Establishment Clause problem it should only invalidate the transfer of the property to the Hope Partnership and not invalidate the taking.  He then argued that there was no underlying Establishment Clause violation:

First, it is well-settled that after the property is acquired and the blight is eliminated, that property can be conveyed to a private developer.  What the majority is suggesting is that the Authority, or for that matter, any governmental entity could not convey property that it has in its possession for a church, school or nursing home, a college run by a religious group or a shelter run by the Salvation Army because that would aid religion and violate the Establishment Clause.  To the contrary, what that outcome suggests is "viewpoint discrimination" against religious groups, which is an impingement on their First Amendment rights that has been condemned by the United States Supreme Court in Good News Club v. Milford Central School, 533 U.S. 98 (2001).

Second, based on what has been pled about the project, there is no possible Establishment Clause violation because there is no proof that the project is a religious enterprise, but only that is its being run by groups who have religious motivations to educate the poor.  Holy Child, Brothers of the Christian Schools and Sisters of Mercy, the religious orders that are sponsoring the project, state in their Vision Statement that the project is for the purpose of "creating an intergenerational, independent educational center in an economically depressed and educationally underserved area of North Philadelphia," with the intent to serve "a variety of religious backgrounds and beliefs."  Because Holy Partnership has not yet shown its intentions are otherwise, until such time we must take it at its word and give it the opportunity to provide the middle school, after-school programs and adult center for students from a variety of religious backgrounds and beliefs.

I am not knowledgeable enough on Establishment Clause issues to have a view on the merits, and would welcome comment from anyone with an informed (or uninformed) view on the issue.  I expect that the case will go up to the Pennsylvania Supreme Court.  Whatever the result, the case makes an interesting counterpoint to post-Kelo controversies about economic development takings of church properties.

UPDATE:  The Philadelphia Inquirer has a story on the case.

UPDATE 3/31:  The Redevelopment Authority of Philadelphia has filed a Petition For Appeal to the Pennsylvania Supreme Court.

Ben Barros

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February 7, 2006 in Takings | Permalink | Comments (1) | TrackBack (0)

Monday, February 6, 2006

Penalver on Kelo and Home as Castle

Eduardo Penalver (Fordham Law School) has posted Property Metaphors and Kelo v. New London:  Two Views of the Castle on SSRN.  Here's the abstract:

Much of the public outcry against the Supreme Court's decision in Kelo v. New London can be understood in terms of the public's commitment to the conception of the home as a castle. This familiar metaphor is typically viewed as aligned with libertarian conceptions of property and of the right to exclude, a conception that rules out the exercise of eminent domain altogether. A different understanding of the castle metaphor is possible, however, one rooted in notions of the dignity of homeownership. While such a dignitary understanding of the home as the castle remains true to the intuitions underlying the metaphor, it yields a more flexible stance towards eminent domain.

Ben Barros

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February 6, 2006 in Takings | Permalink | Comments (0) | TrackBack (0)

Radin From Stanford to Michigan

Brian Leiter reports that Margaret Jane Radin is retiring from Stanford and taking a position at Michigan.  The sad part of Leiter's post is his description of Radin's areas of expertise (intellectual property, Cyberlaw, feminist legal theory), which just reinforces the fact (already clear for a number of years) that the most interesting property theorist of the last thirty years (IMHO) has given up property for other fields.

Ben Barros

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February 6, 2006 in Law Schools | Permalink | Comments (0) | TrackBack (0)

Sunday, February 5, 2006

Weare Voters Decide Not To Try To Take Justice Souter's Home

From the Concord Monitor:

Weare voters put an end to plans to seize the home of U.S. Supreme Court Justice David Souter yesterday.

“He’s one of ours,” Walter Bohlin said, adding: “Why would we take something from one of ours?”

For seven months, Souter’s brown farmhouse and eight acres on Cilley Road have been the focal point of a nationwide response to a controversial U.S. Supreme Court decision. In June, Souter sided with a 5-4 majority in allowing a Connecticut city to seize private property by eminent domain and offer it to developers who could bring the community greater economic benefit.

Logan Darrow Clements, a California man who was incensed with the court’s ruling, devised a plot to give Souter his just desserts: take the justice’s property and convert it into a “Lost Liberty Inn.” Local residents petitioned to put the issue on the town’s March ballot.

The article asked the town to seize the land and create two trust funds: one to pay for any legal expenses and another to compensate Souter. The money would be raised by private donation.

The idea captured national media attention. Clements, a Los Angeles native, flew to Weare twice to hold rallies. Supporters deluged town officials with emails; some even sent checks and asked to reserve rooms at the inn.

Bohlin, who said the article was vengeful, recommended negating it by inserting the word “not.” Voters approved Bohlin’s suggestion by a secret ballot vote of 94-59.

Then another resident, Paul Doscher, suggested adding language to the article that urges state lawmakers to further restrict land seizures by eminent domain. The Legislature is considering several such proposals. The amended article forbids the town from seizing Souter’s land and asks Gov. John Lynch and lawmakers to bar the transfer of private property to private interests for economic development.

The amended article passed by a unanimous voice vote, followed by a loud cheer. Residents will vote on the measure next month.

Hat tips:  Dave Hoffman and Cheryl Humes (who really should be studying for the bar, not surfing the web).

Ben Barros

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February 5, 2006 in Takings | Permalink | Comments (1) | TrackBack (0)

So Much For Planning

Today's NY Times has a story on the ad hoc rebuilding of New Orleans:

Every day the line snakes down a spartan corridor on the eighth floor of City Hall here, as hundreds of people clutch a piece of paper inscribed with a fateful percentage that could force them to abandon their home.

The number is always over 50, and it means a house was so damaged in the flooding after Hurricane Katrina — more than half-ruined — that it faces demolition, unless the owner can come up with tens of thousands of dollars to raise it several feet above the ground and any future floodwaters.

But there is a way out, and that is why so many people stand in line every day, collectively transforming this battered city. "What you need to do is talk to a building inspector and get that lowered below 50 percent," a city worker calls out to the crowd. And at the end of the line, in a large open room down the hall, that is exactly what happens, nearly 90 percent of the time, New Orleans officials say.

By agreeing so often to these appeals — more than 6,000 over the last few months — city officials are in essence allowing random redevelopment to occur throughout the city, undermining a plan by Mayor C. Ray Nagin's rebuilding commission to hold off on building permits in damaged areas for several months until more careful planning can take place. That plan, greeted by widespread opposition, including from the mayor himself, is now essentially dead.

House by house, in devastated neighborhoods across the city, homeowners are bringing back their new-minted building permits and rebuilding New Orleans. As many as 500 such permits are issued every day, said Greg Meffert, the city official in charge of the rebuilding process.

And there is no particular rhyme or reason to who gets a permit, or consideration of whether their neighborhoods can really support its previous residents. One city building inspector, Devra Goldstein, called the proceedings on the eighth floor "really fly-by-night, chaotic, Wild West, get-what-you-want."

The floor, she said, represents "a plan by default." . . .

But there may be a steep price to the city's largess in allowing so many people to move back into flood plains without having to elevate their homes. Past federal flood insurance directors say the practice violates the program, which established the 50-percent rule to guide safe building in flood-prone areas. Most communities have adopted it as a minimum standard, say officials of the Federal Emergency Management Agency, which runs the flood program.

Ben Barros

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February 5, 2006 in Land Use, New Orleans | Permalink | Comments (0) | TrackBack (0)

Friday, February 3, 2006

Weekly Top Ten

All of the entries from 7-10 are new on our Weekly Top Ten list of the most-downloaded recent property papers on SSRN.

1. (347) Teaching Law Students About Sprawl, Michael Lewyn (George Washington University Law School)

2. (136) What a Strange Place to Put a Church: The Political Economy of 'Just Compensation', Nicole Stelle Garnett (Notre Dame Law School)

3. (97) Human Nature, the Laws of Nature, and the Nature of Environmental Law, Richard James Lazarus (Georgetown University Law Center)

4. (78) Three Reasons Why Even Good Property Rights Cause Moral Anxiety, Emily L. Sherwin, (Cornell University - School of Law)

5. (68) Did Reform of Prudent Trust Investment Laws Change Trust Portfolio Allocation?, Max M. Schanzenbach & Robert H. Sitkoff (Northwestern University - School of Law and New York University School of Law)

6. (67) It's Not About the Fox: The Untold History of Pierson v. Post, Bethany Berger (Wayne State University - School of Law)

7. (64) Controlling the Grasping Hand: Economic Development Takings after Kelo, Ilya Somin (George Mason University - School of Law)

8. (55) Report Regarding the Pacific McGeorge Workshop on Globalizing the Law School Curriculum, Franklin A. Gevurtz, Linda E. Carter, Julie Davies, Brian K. Landsberg, Thomas O. Main, Michael P. Malloy, and John G. Sprankling (all of the University of the Pacific - McGeorge School of Law)

9. (51) Perpetual Trusts, Conservation Servitudes, and the Problem of the Future, Susan Fletcher French (UCLA School of Law)

10. (51) Do Courts Matter? Rental Markets and the Law, Pablo Casas-Arce and Albert Saiz (University of Oxford - Department of Economics and University of Pennsylvania - The Wharton School - Real Estate Department)

Ben Barros

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February 3, 2006 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

New Chicago Predatory Lending Law

Marcus Cole has an interesting post at BlackProf about a new Illinois law requiring all mortgage applications in certain neighborhoods to go through a government review process:

Nevertheless, Tuesday was a key moment in African-American History.  On Tuesday, in addition to Mrs. King’s passing and Justice Alito’s elevation, the State of Illinois enacted a law that requires all mortgage applications within nine Chicago zip codes to undergo a process of review by the state’s Department of Financial and Professional Regulation.  The department’s review process determines whether mortgage applicants in these neighborhoods must undergo compulsory credit counseling.  If they must, then the mortgage lender must pay the cost of the counseling.

Anyone familiar with Chicago geography and demography knows these nine zip codes.  They are all neighborhoods on the South and Southwest side of Chicago.  They are predominantly African-American neighborhoods. These neighborhoods are some of the most impoverished in the City of Chicago, and indeed, the nation.  On Tuesday, they suddenly became much poorer.

Although the legislators responsible for the new law were motivated by good intentions, they failed to consider the inevitable consequences of their bill.  They wanted to protect poor homeowners in certain neighborhoods from high interest rates and predatory lending practices.  The new law, however, necessarily increases the costs, time and uncertainty associated with mortgage applications in these black neighborhoods.  The cost of credit counseling will be born by and charged to mortgage applicants.  This, in turn, will necessarily decrease the price that new home-buyers can afford to pay for homes in these neighborhoods.  If they can choose to buy in other neighborhoods, where housing money is more affordable, they, on the margin, will.  Furthermore, recent studies of credit counseling programs suggest that these programs have little effect on borrower behavior.  The end result is that homeowners in these poor black neighborhoods suddenly have less equity in their homes than they had on Monday.

Legislation like this is often motivated by an unspoken belief that poor black people are incapable of making important decisions for themselves.  We see this belief reflected in the protection of failed public schools, and now with respect to personal finances.  But the very people for whom such a law was enacted were responsible and wise enough to save to make the down payments necessary to buy these homes in the first place.  Suddenly, these same people must have their choices reviewed and second-guessed by state bureaucrats who have no stake in the outcome, or accountability for incorrect or unresponsive decisions.  It is hard to imagine the fate of a similar but broader law imposing credit counseling upon all Illinois residents, including white professionals residing in the Chicago suburbs of Evanston, Winnetka, or Kennilworth.  Would there have been enough votes in Springfield to impose these “benefits” on everyone, rather than just the residents of the Southwest side of Chicago?

Ben Barros

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February 3, 2006 in Real Estate Transactions | Permalink | Comments (1) | TrackBack (0)

Thursday, February 2, 2006

The Case of the Disappearing Condos

Al Brophy pointed me to an interesting story in the NY Times (unfortunately Times Select access only) about a number of condo projects in Las Vegas that were canceled after the developer had collected deposits from buyers.  The developer sent refund checks to the buyers, but some buyers are taking legal action to try to get the benefit of their bargain:

But Mr. Verdnikov wants more than the [deposit of] $73,672.81. Since he agreed in May 2005 to buy the 1,400-square-foot, two-bedroom apartment near the Las Vegas Strip for $728,900, its value, he says, has increased. "To purchase something similar, we would need to pay $200,000 more," said Mr. Verdnikov, who has been looking for a new apartment with his girlfriend, Gitty Stone. So Mr. Verdnikov is suing for the gain he would have realized if the apartment had been built.

"He deserves to get the benefit of the bargain," said Will Kemp, a lawyer with Harrison, Kemp & Jones in Las Vegas, who is representing Mr. Verdnikov and a dozen other Icon buyers . . .

But whether Mr. Verdnikov — or any buyer — can receive more than a refund of his deposit depends on a number of factors. Some contracts for unbuilt condos allow the seller to back out if it cannot obtain proper financing (a phrase sometimes so vague as to constitute a get-out-of-deal-free card, lawyers say). The contracts for Icon Las Vegas contained no such financing contingency. Related did claim the right to back out if it failed to sell at least half of the units in the project. But observers say the company far exceeded the 50 percent goal, and statements made last year by Mr. Burger support that view.

Other contracts specifically limit damages for cancellation to the amount of the deposit, or to that amount plus interest. Such provisions are generally enforceable, said Eric Glazer, a Hallandale, Fla., lawyer who often represents condo buyers. Someone planning to buy a condo that hasn't been built yet might try to delete that clause from the contract of sale. But in most cases, condo developers will not negotiate provisions. "They have a standard contract; it's take it or leave it," Mr. Glazer said.

The contract at Icon included no limitation on damages, Mr. Kemp said, which is why he believes his clients could win "benefit of the bargain" if the case goes to court. "It's a standard measure of damages in contract law," he said, though he said he had not seen it applied in a case involving an unbuilt condo building.

Ben Barros

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February 2, 2006 in Real Estate Transactions | Permalink | Comments (1) | TrackBack (0)

New Book On Right To Housing

Rachel G. Bratt, Michael E. Stone and Chester Hartman have edited a new book titled A Right To Housing.

In the 1949 Housing Act, Congress declared "a decent home and a suitable living environment for every American family" to be our national housing goal. Today, little more than half a century later, upwards of 100 million people in the United States live in housing that is physically inadequate, unsafe, overcrowded, or unaffordable.

The contributors to A Right to Housing consider the key issues related to America's housing crisis, including income inequality and insecurity, segregation and discrimination, the rights of the elderly, as well as legislative and judicial responses to homelessness. The book offers a detailed examination of how access to adequate housing is directly related to economic security.

With essays by leading activists and scholars, this book presents a powerful and compelling analysis of the persistent inability of the U.S. to meet many of its citizens' housing needs and a comprehensive proposal for progressive change.

Ben Barros

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February 2, 2006 in Books, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 1, 2006

Houston Conference on Natural Gas

The University of Houston Law Center has announced a conference titled Should We Site It Here:  The Environmental Issues Assoicated With Liquefied Natural Gas:

The Expansion of the use of Liquefied Natural Gas (LNG) and how that utilization will occur is probably the most important energy issue that our country has faced since the first widespread adoption of Nuclear Energy. Energy shortages and the accompanying increasing price of natural gas, along with new federal legislation about siting of LNG terminals ensure that LNG will have an enormous future effect on our energy security, energy usage patterns, prosperity and the environment. The University of Houston Law Center's Environmental & Energy Law & Policy Journal will address this important topic at its second annual symposium entitled "Should we Site it Here: Environmental Issues Associated with LNG Development" on Friday, March 3, at the Hilton Hotel on the University of Houston Campus.

This symposium will specifically address the environmental issues associated with the increasing use of LNG in terms of extraction, importation and utilization, and the appropriate body to make siting decisions. This will be the first academic symposium to address these questions and will feature law professors Peter Appel, Eileen Gauna, and Irma Russell addressing federalism, environmental justice, and environmental impacts of fuel switching. The keynote address will be delivered by the Honorable Danny J. Boggs, of the U.S. Sixth Circuit Court of Appeals and former Deputy Secretary of Energy in the Reagan Administration.

Ben Barros

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February 1, 2006 in Conferences, Land Use, Natural Resources | Permalink | Comments (0) | TrackBack (0)