PropertyProf Blog

Fed Cir Decision in Rose Acre Farms

The Federal Circuit issued a decision in the long-running Rose Acre Farms case.  Here are the first paragraphs:

In 1992, Rose Acre Farms, Inc. (“Rose Acre”) filed the present action in the United States Court of Federal Claims, claiming that United States Department of Agriculture (“USDA” or “the government”) regulations that restricted egg sales from its farms and caused the loss of egg-laying chickens that tested positive for the presence of salmonella bacteria effected a taking requiring compensation under the Fifth Amendment. In 2003, the trial court held that Rose Acre was entitled to compensation for a taking of the eggs affected by the regulations as well as for hens seized for testing.

In our previous appeal, we held that the court misapplied the standards governing regulatory takings claims under Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978). We vacated and remanded for appropriate reconsideration.  We must again decide whether the trial court correctly held that the government’s regulations, which restricted the sale of certain of Rose Acre’s eggs during the approximately two-year period, constituted a taking for which just compensation is due. As explained below, we hold that, upon a proper assessment of the Penn Central factors, the USDA did not commit a compensable taking. We therefore reverse the judgment of the Court of Federal Claims.

I need to spend more time with the opinion, but I think I disagree with the Court's discussion of the impact of Lingle on the character of the government act prong of the Penn Central test.  In any event, a very interesting opinion that really engages in Lingle's impact on takings law.

Ben Barros

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Montana S. Ct. Resolves Mitchell Slough Dispute

The Montana Supreme Court resolved a long-running water rights dispute, which focused on whether the Mitchell Slough was a natural watercourse:

In a case with statewide implications, the Montana Supreme Court ruled Monday that Mitchell Slough is open to recreation under the state's stream access law.

The court said the 16-mile-long slough roughly follows the historical course of a waterway mapped 130 years ago, and therefore is subject to public access and required permitting, as are other natural waterways.

The 54-page decision overturned two earlier rulings by state district courts that found the slough was not a “natural, perennial-flowing stream. . . .

Since nearly every river and stream in Montana has been affected in some manner by man, the high court concluded: “The District Court's dictionary-based definition, which essentially requires a pristine river unaffected by humans in order to be deemed natural, results in an absurdity: For many Montana waters, the SAL would prohibit the very access it was enacted to provide.”

The Supreme Court also overturned the lower court's conclusion that the water captured by the slough in return flows from irrigation was “artificial” and “not natural,” saying that many Montana streams carry discharged irrigation flows.

The court also disputed landowners' claims the slough was a “man-made water conveyance system” that exists only because of man's manipulations.

“The claim that man has made the Mitchell Slough is a bold one, indeed,” the court's decision reads.

The court did offer a caveat on the issue of public access.

The slough runs through private property and the public only has the right to recreate under the terms of the state streamside access law, which allows access on the water and up to the ordinary high-water mark on the slough's bank, the court said.

Ben Barros

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Never Forget The True Owner In Finding Cases

A while ago, we noted a dispute between a contractor and a homeowner about a bunch of 1920s currency found in a wall.  Classic finder v. owner of the locus dispute, right?  Well, the publicity generated by the dispute brought the true owner's descendents out of the woodwork, and they'll get a share.  Of course, the lawyers will probably get the biggest share.

Ben Barros

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New Jersey Case Invalidating Blight Taking

Ilya Somin has the details on City of Long Branch v. Anzalone at the VC.

Ben Barros

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Update on the Trees v. the Solar Panels

A while back, we noted an interesting California case that involved a conflict between redwoods and solar panels.  The Times has an update on the story.  An excerpt:

More than six months after two Santa Clara residents were convicted under a state nuisance law for letting their redwoods cast shade on a neighbor’s solar panels, the governor signed into law a bill that gives trees the right to grow as they please — as long as they predate any solar panels they might be shading. . . .

The new law is not retroactive; the original conviction stands. But the neighborhood fight is not over. Mr. Vargas has gone back to civil court, suing his neighbors in part because of the solar-panel issue, but also because he claimed the trees’ roots damage an underground storm drain and because they violate state laws prohibiting spite fences.

Ben Barros

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Heller and the Home

I just skimmed through the Supreme Court's decision in D.C. v. Heller.  I was struck by how narrow the opinion is, and how much it is focused on self defense in the home.  We talk a lot about homes here on Propertyprof.  It seems to me that Heller falls within the long tradition of cases that privilege homes as compared to other types of property.

Ben Barros

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Specific Performance of the Seattle Sonics' Lease

Out in Seattle Judge Marsha Pechman (W.D. Wash) has been conducting a trial over whether the Seattle Sonics must abide their lease with of the city's KeyArena for the next two years or whether they can move immediately to their new home of Oklahoma City.  Interesting stuff, whether the city can require specific performance of the lease; I think the case for specific performance is strong here.  It looks like there isn't a material breach of the lease by the city, only by the team, so the question is one of remedies. 

Which will it be, then, damages or specific performance?  Now, courts are obviously (and for good reason) reluctant to give affirmative injunctions.  I wouldn't be holding my breath for an affirmative injunction requiring the team to play in the KeyArena.  But I think here that a negative injunction--you can't play anywhere else when you're scheduled to play home games--may be appropriate.  Why would a negative injunction be superior to damages?

The question is whether harm is irreparable (with apologies to Doug Laycock!)--and irreparable injury is determined by whether we can measure the damage in dollars.  I don't think we can--or at least we can't with the specificity that we usually demand.  The damages to the city are going to be somewhat are to compute--how much lost revenue will there be (not just from the stadium lease, but from the Sonics overall)?  There's been a lot of talk in the trial of how difficult (or not) it will be to gauge the lost revenue--and no surprise here the Sonics' owners say it'll be easy and the city says it'll be hard.  The difficulty of computing damages is one of the key factors in determining whether you're entitled to an injunction and I think all the city needs to do here is make the case for computing damages look murky.

Of course, we also balance the equities in determining injunctive relief--do we think that the harm to the city of not granting the relief is substantially outweighed by the harm to the Sonics of granting relief?  On this there's some important evidence.  The city's interest is substantial--their beloved team is leaving; many people whose livelihood depends on the team are going to be hurt; the ripples will go out for a long way.  What about the harm to the team?  They claim they're going to lose $60 million over the next two years--that's a substantial harm, of course.  But remember two things--first, that's their allegation.  Second, that's balanced against the harm to the city. 

For me (fan of aloha jurisprudence and other populist strains in property law) perhaps the most exciting piece of this equity puzzle is the public interest--which we typically consider in cases where there are interests at stake beyond the parties to the litigation.  This is a great example of one of those cases and I think it points in favor of a negative injunction.  The community's interest here (and remember this is an equitable question of whether we're going to allow a company to breach a contract and only pay money damages) is in favor of keeping the team for the fans, as well as the people in the city who need the work the home games generate.  Anyway, we'll all know soon enough!

Jim Brunner of the Seattle Times has a great article in this morning's paper on the case.  You can also follow the trial on Jim's blog.

Alfred Brophy

Landlord Conversion of 20-unit Building Into Private Residence

Over at the Co-op, Frank Pasquale has an interesting post on a NYC dispute featuring a landlord who is trying to convert a 20-unit building into a private residence.

Ben Barros

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On-Line Ad Housing Discrimination Case

Eugene Volokh has a post on Fair Housing Council v. Roomates.com.  The case is mostly about some on-line immunity issues, but an underlying issue about expressing preferences for roomates will be a familar one to propertyprofs.

Ben Barros

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Supreme Court Decision in New Jersey v. Delaware

Yesterday, the Supreme Court ruled in favor of Delaware in its riparian use dispute with New Jersey.  The New York Times has an article on the case.  The opinions are available here.  Choice quote from the Times about Justice Scalia's dissent:

What was so “extraordinary” about a wharf to unload liquefied natural gas, he asked. “Would a pink wharf, or a zig-zagged wharf qualify? How about one for the transfer of “tofu and bean sprouts”?

Ben Barros

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Goldstein v. Pataki

Ilya Somin has a good post at the VC about this interesting Second Circuit case.  An excerpt:

The US Court of Appeals for the Second Circuit recently decided Goldstein v. Pataki, a case challenging the condemnation of homes and other property in Brooklyn for the purpose of transferring them to developer Bruce Ratner, owner of the New Jersey Nets. Ratner plans to use the land to build a new stadium for the Nets, as well as other facilities, including some 2250 new housing units.

Not surprisingly, the Second Circuit upheld the condemnations. Under Kelo v. City of New London, they had very little choice. As I discuss in great detail in this article, Kelo mandates very broad judicial deference to the government in determining whether a condemnation is a genuine "public use" under the Fifth Amendment. Any potential benefit to the general public is sufficient, even if it is greatly outweighed by the project's cost.

The case nonetheless reveals some of the serious shortcomings of Kelo and related precedents. Goldstein v. Pataki is a correct application of Kelo; it is also an example of the sort of abuse that more robust judicial protection of property rights could prevent.

Ben Barros

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Ceded Lands in Hawaii

In 1893, the government of the Kingdom of Hawaii, a constitutional monarchy, was overthrown by a group of mostly American planters and businessmen, supported by a contingent of U.S. Marines.  The revolutionaries subsequently established the Republic of Hawaii and entered into negotiations with the United States to seek Hawaii's annexation.  When Hawaii was annexed by the United States in 1898, the Republic of Hawaii ceded the public lands of Hawaii to the United States.  When Hawaii became a state in 1959, the United States conveyed more than a million acres of land this land to the new state, to hold in trust for five specified purposes, including "the benefit of native Hawaiians."  This "Ceded Lands Trust" is analogous to the school lands trusts established in the admission acts of most states admitted to the Union after about 1820.  Earlier this week, the Hawaii Supreme Court held that the State cannot convey lands from the Ceded Lands Trust to private parties until the claims of Native Hawaiians to these lands have been resolved.   Newspaper articles on the case can be accessed here and here. The opinion itself, Office of Hawaiian Affairs v. Housing and Community Development Corporation of Hawaii, can be accessed here (careful; the file is enormous). 

Carl Christensen
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Buyer Sues Broker for Failure to Disclose Declining Market

From a NY Times article; particularly notable for the impact of the recent shift to buyer's agents:

Marty Ummel believes she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.

What makes Ummel different is that she is suing her agent, saying it was all his fault.

Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.

Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.

"When your house appreciates $100,000 in the first six months, you're not quite as concerned that maybe the valuation was $25,000 or $50,000 off," said Clifford Horner of the law firm Horner & Singer. "But when your house goes down, you ask: 'Who might have led me astray here?'"

Agents representing buyers rarely had the opportunity to make mistakes during the last real estate boom, in the late 1980s, because the job hardly existed then. For decades, residential transactions almost always involved brokers who, whatever assistance they gave the buyer, legally represented only the seller. The long boom that began in the late 1990s put an end to that one-sided world. As prices spiked, buyer's agents and brokers became popular as sounding boards, advisers and negotiators. The National Association of Realtors estimates they are now involved in two-thirds of all residential purchases.

That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests. The Ummel case poses the question: In a relationship built on trust, where promises are rarely written down and where -- as in this case -- there is no signed contract, what are the exact obligations of these representatives in guiding their clients through a sizzling market?

"Agents have a lot of fiduciary duties, but they don't make money unless they close the sale," said Joel Ruben, a real estate lawyer in Manhattan Beach, Calif. "In an inflated market, there are built-in temptations to cut corners."

Ben Barros

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Purpresture in Hawaii

Thanks to the extraordinary Carl Christensen for calling to my attention what I did not know, but should have:  Hawaii v. Kerr, 16 Haw. 363 (1905), a case about purpresture.  Looks like purpresture may be a piece of aloha jurisprudence.  In this case, a structure encroached on a public beach.  The syllabus to the case states:

The defendant whose lot, as shown by its land commission award, is bounded “along the sea” constructed a concrete wall on the shore in front of his lot between high and low water, a corner of the wall projecting a few feet beyond low water, and was filling the space enclosed by the wall with coral and sand so as to raise the surface above the low water line, with the intention of making a house lot for a seaside residence. Held: Following Gay v. Halstead, 7 Haw. 587 (1889), that the defendant's land extended to and along the line of high water.

The defendant's concrete wall is a purpresture, encroaching upon public territory and rights in the shore. A bill for injunction requiring the removal of the obstruction caused by the wall and enjoining its renewal can be maintained by the Territory under the provisions of section 91 of the Organic Act, giving it the possession, control, maintenance and care of all public property ceded to the United States by the Republic of Hawaii. The bill sufficiently avers irreparable damage.

Time to dust off this doctrine and put it up there alongside spite fences and cemetery access--and, of course, implied trust beneficiaries, as doctrines that protect community rights in property.

Carl writes:

For a look at a modern purpresture case (though it doesn't use the word), also in the beach context, look at Diamond v. State of Hawaii, Board of Land and Natural Resources, 145 P.3d 704 (Hawaii 2006).  Here the unauthorized purpresture is in the form of vegetation artificially induced to grow out onto a publicly owned sandy beach by a shoreline landowner who hopes to gain a more favorable shoreline setback line based on the new vegetation.

In fact, this doctrine is surprisingly vibrant.  Carl continues:

A WestLaw search in the Allstates database on "Purpresture & beach" yields 93 hits, among them Trepanier v. County of Volusia, 965 So.2d 276 (Fla. App. 2007), Lowcountry Open Land Trust v. State, 552 SE.2d 778 (S./C. App. 2001), and Scott v. City of Del Mar, 68 Cal. Rptr. 2d 317 (Cal. App. 1997). 

It seems, one might conclude, that the dern' things pop up all over the place.

Al Brophy
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Finding Law in the News

From an AP Story:

A contractor who helped discover bundles of cash totaling $182,000 hidden behind bathroom walls says the homeowner should turn the money over to him — or at least share it.

Bob Kitts said his feud with the owner of the house, a former high school classmate, has deteriorated to the point where they speak to each other only through lawyers.

Kitts said his lawyer has drafted a lawsuit that he hopes will force Amanda Reece to turn over the money she has kept. Meanwhile, Reece accuses Kitts of shaking her down.

Most of the currency, issued in 1927 and 1929, is in good condition, and some of the bills are so rare that one currency appraiser valued the treasure at as much as $500,000, Kitts said.

The fight began in May 2006 when Kitts was gutting Reece's bathroom and found a box below the medicine cabinet that contained $25,200.

"I almost passed out," Kitts recalled. "It was the ultimate contractor fantasy."

He called Reece, who rushed home. Together they found another steel box tied to the end of a wire nailed to a stud. Inside was more than $100,000, Kitts said. Two more boxes were filled with a mix of money and religious memorabilia.

"It was insane," Kitts said. "She was in shock — she was a wreck."

The bundles had "P. Dunne" written on them, probably a reference to Peter Dunne, a businessman who owned the home during the Depression.

Kitts said he took some of the currency for an appraisal and learned that many of the $10 bills were rare 1929-series Cleveland Federal Reserve bank notes, worth about $85 each. There also were $500 bills and one $1,000 bill.

John Chambers, an attorney for Reece, said Kitts rejected his client's offer of a 10 percent finder's fee and demanded 40 percent of the small fortune.

Kitts asserts he found lost money, and court rulings in Ohio establish that a "finders keepers" law applies if there's no reason to believe any owner will reappear to claim it.

I don't know enough about Ohio law to comment on that last sentence.  The prior cases that Kitts referenced may not have presented facts like this one, where the finder was on the property as an agent of the property owner.  Finding cases are all over the place in their results, but this one reminds me of the case involving two workers who found gold on Jann Wenner's property; the judge awarded the gold to Wenner in part because the workers were on the property to act on Wenner's behalf.  These issues are discussed in notes 3 and 4 on p. 106 of the sixth edition of Dukeminier & Krier.

Ben Barros

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Private Road Act Litigation

Pennsylvania has a Private Road Act that allows owners of landlocked parcels to condemn a private road for access to a nearby public road.  The Pennsylvania courts have interpreted the Private Road Act as requiring a degree of necessity that is short of strict necessity but that still imposes a fairly high hurdle for the petitioner.  In re Packard, 926 A.2d 557 (Comm. Ct. 2007) is an interesting example.  Petitioners had access to their property through a run-down private road.  They argued that use of this road was impractical; the court rejected their claim because they had not met their burden to prove necessity.  The case is discussed in this story from the Harrisburg Patriot News, though the story doesn't really capture the role of necessity in the court's analysis.

Ben Barros

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Prescriptive Easement Beach Access Case From My Hometown

From the Boston Globe:

In a case that may send legal ripples across the South Shore, some Hingham homeowners have won the right to use a crescent-shaped sliver of beach, defeating property owners who erected a locked gate and tried to deny them access.

The three-year legal battle ignited a storm of controversy in the quiet Crow Point section of town, pitting neighbor against neighbor in a battle over who could use the rocky beach, which has spectacular views of the harbor and its islands.

The Dec. 12 ruling by Land Court Judge Alexander H. Sands III was in some ways a split decision. He ruled that the plaintiffs had no deeded rights to the beach. However, those who had used the beach for 20 years or more had established a right-of-way and could continue using it.

The ruling meant that seven families obtained an easement to the beach, while three families did not, including one family that had used the beach for 19 1/2 years. The easement continues with their houses when they are sold.

Ben Barros (Hingham High School '87)

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Federal Court Imposes Large Inverse Condemnation Award

The case is Yamagiwa v. City of Half Moon Bay.    Ilya Somin has a post on the case at the VC.  Gideon Kanner also has two posts on the case, here and here.  In case you're wondering why this case was in federal court, it appears that the City removed it from state court.

Ben Barros

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Third Circuit RLUIPA/Eminent Domain Case

A divided Third Circuit panel recently decided Lighthouse Institute for Evangelism v. City of Long Branch, a RLUIPA case with a redevelopment/eminent domain twist.  The New Jersey Eminent Domain Blog has a recap of the case.  An excerpt:

In its precedent setting 96-page opinion, the Third Circuit ruled 2-1 in favor of the City of Long Branch against Reverend Kevin Brown and the Lighthouse Institute for Evangelism in their attempt to establish a church at 162 Broadway within the Broadway Corridor Redevelopment area. However, the court remanded the case to Judge William Walls in the U.S. District Court for further findings on the plaintiff's challenge to the C-1 ordinance, the zoning for the subject property prior to the adoption of the redevelopment ordinance and plan, under RLUIPA's Equal Terms provision. The court was unanimous that the C-1 ordinance violated RLUIPA. This will entitle the plaintiffs to damages, counsel fees, and costs. . . .

The majority opinion, written by senior Judge Jane Roth, affirms the entry of summary judgment by Judge William Walls of the U.S. District Court. The dissent, filed by Judge Kent A. Jordan, disagreed with the majority regarding the redevelopment plan ordinance. Judge Jordan said that both ordinances failed to treat religious and non-religious assemblies on equal terms and, therefore, violate the very purpose for which the RLUIPA statute was enacted.

Judge Jordan noted that both ordinances, as interpreted by Long Branch,  prohibit religious use categorically. Judge Jordan reasoned that, if the majority reading of RLUIPA were correct, local governments could effectively render RLUIPA meaningless. Both the Becket Fund for Religious Liberty and the Department of Justice Civil Rights Division argued as amicus in support of Reverend Brown and the Lighthouse Mission. This decision is at odds with other decisions regarding RLUIPA in other circuit courts and may well end up before the United States Supreme Court.

The location of houses of worship, temples, mosques, and evangelical congregations is an issue that comes up frequently in New Jersey. Protracted battles in Rockaway Township ensued over the site selection by Dr. David Ireland, pastor of the 5000-member Christ Church. That church, a predominantly African American evangelical congregation, sought to move from its Montclair location to the former Agilent site in Rockaway. The relocation of the church was vigorously contested by a group of local residents. In Wayne, an Albanian mosque pursued litigation against the township of Wayne because the planning board delayed the plaintiff’s land use application.

Ben Barros

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PA Supreme Court Overrides Zoning Objections to Casinos

The Pennsylvania Supreme Court recently ordered Philadelphia to approve the zoning for a casino.  From the Philadelphia Inquirer:

The Pennsylvania Supreme Court went over Philadelphia's head yesterday and cleared the way for construction to begin on the $550 million SugarHouse casino in Fishtown and Northern Liberties.

Finding "deliberate inaction" in City Council's longstanding failure to vote on SugarHouse's zoning and land-use requests, the court took it upon itself to issue the go-ahead. . . .

The city "ultimately has no discretion to preclude gaming," the court's opinion stated. "We conclude that the undisputed documentation establishes the deliberate inaction by Council for the purposes of delay."

The court ordered that SugarHouse's site, approved last December by the Pennsylvania Gaming Control Board, be granted the requisite zoning as a commercial entertainment district.

It also declared that SugarHouse's development plan, approved in May by the city Planning Commission, be given final approval with no further input from Council. . . .

"This really does not deter us. This actually infuriates us," said Debbie King, vice president of the Northern Liberties Neighbors Association. "We are outraged by the courts and the city government officials that are trying to jam these casinos down our throats. Where are our rights?"

Ben Barros

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