SCOTUS &

PROPERTY RIGHTS

By: Anthony H. Misseldine, JacksonWhite, P.C.

“NO PERSON SHALL…be deprived of life, liberty or property without the due

process of law; nor shall private property be taken for public use

without just compensation.”

The Fifth Amendment, U.S. Constitution

Koontz v. St. Johns River Water Management District, 2013

Koontz v. St. Johns River Water Management District 133 S. Ct. 2586 (2013)

The Property and Proposed Development

• Mr. Koontz owned approximately 15 acres of undeveloped wetlands.

• He desired to develop 3.7 acres and offered to grant a conservation easement over the remaining 11.3 acres to the River District.

• Mr. Koontz applied for a dredge and fill permit with the River District.

• The River District countered with two options: a) reduce the development down to one acre and grant a conservation easement on the remaining 14 acres, or b) pay for the cost of improvements located miles away on land having nothing to do with the planned development.

• Mr. Koontz refused and filed an inverse condemnation action.

The Florida trial court found the District’s actions unlawful as they failed the requirements of two Supreme Court cases: Nollan v. California Coastal Comm’n, 483 U.S. 825, and Dolan v. City of Tigard, 512 U.S. 374.

These cases held that the government may not condition the approval of a land permit on the owner’s relinquishment of a portion of their property unless there is a nexus and rough proportionately between the government’s demand and the effects of the proposed land use.

Justice Alito explained that the Court’s precedents…

“…still forbid the government from engaging in ‘out-and-out extortion’ that would thwart the Fifth

Amendment right to just compensation.”

Koontz v. St. Johns River Water Management District 133 S. Ct. 2586 (2013)

“It makes no difference that no property was actually taken in this case. Extortionate demands for property in the land-use permitting context

run afoul for the Takings Clause not because they take property but because they impermissibly

burden the right not to have property taken without just compensation.”

Koontz v. St. Johns River Water Management District 133 S. Ct. 2586 (2013) (Syllabus)

“Property is surely a right of mankind as real as liberty.”

“The moment the idea is admitted into society that property is not as sacred as the laws of God, and there is not a force of law and public justice to protect it, anarchy and tyranny commence.”

John Adams, American, 2nd United States President (1797-1801)

Horne v. United States Dept. of Agriculture, 2013

Your raisins or your life…

Horne v. United States Department of Agriculture, 133 S. Ct. 2053 (2013)

The Hornes became frustrated with a Federal depression-era program (1937) designed to stabilize raisin prices by controlling the amount of raisins sold in the market.

• The regulation requires all CA raisin “handlers” to turn over ownership of a significant portion of their raisin crop each year to the government.

• Raisin “handlers” must store and segregate the donated raisins on their property.

• The Hornes grew and developed the crop, cut out the “handlers” and sold raisins.

• The regulation obligated the Hornes to donate 47% of their crop harvested in 2003 and 30% of their crop in 2004 (approximately $700,000).

• USDA sued Horne to enforce compliance for civil penalties.

“[W]e are growers that will pack and market our raisins. We reserve the right under the Constitution of

the United States…[T]he Marketing Order Regulating Raisins has become a tool for grower

bankruptcy, poverty, and involuntary servitude. The Marketing Order Regulating Raisins is a complete

failure…We will not relinquish the crop. We put forth the money in an effort to grow it, not the Raisin

Administrative Committee. This is America, not a communist state.”

Horne’s letter to the U.S. Secretary of Agriculture

Justice Scalia commented during the oral arguments:

“Your raisins, or your life. Right?”

The government’s lawyer countered…

“It’s not a choice.”

Justice Kagan suggested…

…that they remand to the 9th Circuit to determine whether the program constituted an unconstitutional

taking of private property or “was the world’s most out-dated law.”

Oral arguments before SCOTUS on March 20, 2013

9th Circuit Update on Horne CaseThe Hornes make the claim that the Raisin Marketing Order constitutes a physical taking because the Order results in a “direct appropriation” annually of their raisin inventory. The Circuit rejected this argument stating, “Though the simplicity of their logic has some understandable appeal, their raisins are personal property, personal property is protected by the Fifth Amendment, and each year the RAC ‘takes’ some of their raisins, at least in the colloquial sense—their argument rests on a fundamental misunderstanding of the nature of property rights and instead clings to a phrase divorced from context.”

Instead the panel suggested, “the Raisin Marketing Order applies to the Hornes only and insofar as they voluntarily chose to send their raisins into the stream of interstate commerce. Simply put, it is a use of restriction, not a direct appropriation. The Secretary of Agriculture did not authorize a forced seizure of 47% of the Hornes’ 2002-03 crops and 30% of their 2003-04 crops, but rather imposed a condition on the Hornes’ use of their crops by regulating their sale.”

9th Circuit: May 9, 2014

“Next to the right of liberty, the right of property is the most important individual right guaranteed by the Constitution and the one which, united with that of

personal liberty, has contributed more to the growth of civilization than any other institution established by the

human race.”

William Howard Taft, American, 27th President of the United States, (1909-13)

Estate of Hage v. United States

Estate of Hage v. United States, 687 F.3d 1281 (Fed. Cir. 2012)

This case involves grazing permits. Hage has 7,000 acres of privately owned land in Nevada, on which he raised cattle. He also used another 750,000 acres of federal land. The relationship between Hage and the Feds was contentious.

Hage filed a suit against the Feds in 1998, alleging that water rights had been taken which allowed vegetation to accumulate in streams and created fencing that prevented his cattle from reaching their water source. A jury trial awarded Hage $4.2 million for water rights and damages to improvements. With interest included, the total was over $14.2 million.

The 9th Circuit reversed.

• The claim for failure to maintain ditches was not ripe because Hage failed to obtain a permit to maintain the ditches on his own. Despite the fact that every other permit Hage had sought for decades had been denied by the Feds.

• The claim of physical taking for blocking the cattle from water was rejected because Hage failed to show a protected property interest.

“THE RIGHT OF PROPERTY is the guardian of every other right, and to deprive a people of this, is in fact to deprive them of their liberty.”

Arthur Lee, An Appeal to the Justice and Interests of the People of Great Britain, in the Present Disputes with America (London: Printed for J. Almon, Opposite

Burlington-House, 1775), 19.

Riviera Beach v. That Certain Unnamed Gray, Two-Story Vessel Approximately Fifty-Seven Feet in Length

Don’t call it a houseboat…

Lozman v. City of Riviera Beach, 133 S. Ct. 735 (2013)

• The Court did not consider this a taking case, but it is a good property rights saga. Why…because the government destroyed private property and got caught.

• Lozman irritated the local officials and fell behind in his moorage payments at the local marina.

• Riviera Beach tried to evict him.

• The City lost in the State of Florida court and then decided it was an admiralty case and sued in federal court.

• Federal Marshalls “arrested” the vessel and towed it away. The City acquired it at auction and destroyed it.

• After summary judgment proceedings, the court found that the floating home was a “vessel” and concluded that the admiralty jurisdiction was consequently proper.

• The judge then conducted a bench trial on the merits and awarded the City $3,039.88 for dockage along with $1 in nominal damages for trespass.

• Nothing about Lozman’s home suggests that it was designed to any practical degree to transport persons or things over water.

• Lozman has claim for the value of the “unnamed grey vessel.”

“A people averse to the institution of private property is without the

first element of freedom.”

John Emerich Edward Dalberg Acton, English, Historian (1834-1902)

Arkansas Game & Fish Commission v. United States

Arkansas Game & Fish Commission v. United States, 133 S. Ct. 511 (2012)

• The Corps of Engineers had blown up a dam which—in the CFC’s words “unleash[ed] a flood that caused damage to the plaintiff’s land, crops, equipment, and infrastructure.”

• The property taken was timber/logging land. For six consecutive years, flooding occurred during the growing season. Old federal rule was that flooding is not a taking if the flooding is not permanent.

• Rule changed: First English Evangelical Lutheran Church v. City of Los Angeles, 482 U.S. 304 (1987). SCOTUS ruled that the Fifth Amendment protects against temporary takings.

• After the SCOTUS’ decision, the CFC asked the parties to brief that decision’s impact. The trial court concluded that there was no impact.

• Why? “Arkansas Game did not eliminate the requirement that to state a takings claim based on flooding, the claimant must allege permanent or temporary flooding that is ‘substantial and frequent enough to rise to the level of a taking,’ rather than a tort…The Supreme Court did not address whether a single flood can give rise to a claim for a taking as opposed to a tort.”

• The Claims Court determined that the flooding was both substantial and predictable and awarded $5.7 million in damages for lost trees and reclamation costs. The Federal Circuit reversed, deciding to ignore it because “cases involving flooding and flowage easements are different.”

• The Supreme Court held that these cases are not different and reversed.

• The “flooding cases are different” reasoning was rejected. “No decision of this Court authorizes a blanket temporary-flooding exception to our Takings Clause jurisprudence, and we decline interest in declaring such an exception in this case.”

• “We rule today, simply and only, that government induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection.”

“Government has no other end, but the preservation of property.”

John Locke, English, Philosopher (1632-1704)

Galleon Bay Corp. v. Board of County Commr’s

Galleon Bay Corp. v. Board of County Commr’s, 105 So.3d 555 (Fla. App. 2012)

• The owners acquired vacant land in the 1960s and 70s on Florida’s No Name Key, approximately 33 miles NW of Key West with the intent of developing it.

• This case involves a 10.64-acre parcel comprised of 14 residential lots, a dedicated open space, and a land-locked lake.

• The county adopted a point system for restricting building permits. After filing plans and revision, the owners waited for four years, and then sought relief in the courts.

• The hearing officer concluded that they had “expended and obligated the sum of $578,670.00 to develop, permit, and sell the subject lots” and it would be unjust to hold the owners to the recently imposed restrictions.

“A local government may not whittle away a landowner’s property rights in

exchange for meaningless land use approvals.”

The owners had already “giv[en] up 44% of its density, and conserving

48% of its land…”Galleon Bay Corp. v. Board of County Commr’s, 105 So.3d 555 (Fla. App. 2012)

At trial, the court found the county liable.

A following jury trial awarded the owners $3,000,000.

“So great moreover is the regard of the law for private property, that it will not

authorize the least violation of it; no, not even for the general good of the whole

community.”

William Blackstone, English, Jurist (1723-1780)

Lavan v. City of Los Angeles

Lavan v. City of Los Angeles, 693 F.3d 1022 (9th Cir. 2012)

“The personal right to acquire property, which is a natural right, gives to property, when acquired, a right to protection, as a

social right.”

James Madison, American, 4th President of the United States (1751-1836)

State of Florida v. Stephen D. Basford

State of Florida v. Stephen D. Basford, 2013 WL 3814317 (Fla. App. 2013)

• Basford Farms ran a high volume pig production operation, which contained “gestation crates” (small enclosures that pregnant pigs were placed in until they gave birth).

• Because the business was based on volume, it could not operate competitively without confining the pigs.

• Florida’s “Pregnant Pig Amendment” to its Constitution made it unlawful to confine a pregnant pig in an enclosure. Basford Farms was forced to shut down operations, but continued growing some crops on part of its property.

• The owner sued the State of Florida for loss of business.

• The trial court ruled in favor of Basford Farms and awarded over $500,000.

“Ultimately property rights and personal rights are the same thing.”

Calvin Coolidge, American, 30th President of the United States (1872-1933)

Amisseldine@jacksonwhitelaw.com

jacksonwhitelaw.com

480-464-1111