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Community Rights Report Newsletter -
2004 On the Horizon Archive


Update on Kelo v. City of New London (U.S. No. 04-108)

On December 3, the Petitioners in Kelo filed their opening brief on the merits, arguing that New London's condemnation of land for an economic redevelopment project is not a "public use" and thus violates the Just Compensation Clause of the Fifth Amendment. The Petitioners ask the Supreme Court to rule that economic development alone is never a public use, or alternatively that governments condemning land for economic development must show to a "reasonable certainty" that the land will be used for development and the project will succeed.

The Petitioners are supported by more than twenty amicus briefs, a testament to the sympathetic facts of their case. CRC is weighing in on the side of New London, though, because of the importance of eminent domain for communities' ability to create jobs for their citizens and much-needed revenue for police departments, school districts, and other local services. CRC is preparing an amicus brief for a broad coalition of state and local officials.

New London's opening brief on the merits is due January 21, 2005. Oral argument is scheduled for February 22, the same day as the argument in another takings case, Lingle v. Chevron.


Oregon's Measure 37

Oregon has long been recognized for its progressive land use regulations, which restrain urban sprawl, protect the environment, and preserve farmland. But things changed on November 2nd.

On Election Day, Oregon voters passed Measure 37, a ballot measure requiring state and local governments to compensate property owners when their land loses value due to regulations enacted after their purchase of the property.

Fortunately, Measure 37 is narrower than its predecessor, Measure 7, an amendment to the state constitution that the Oregon Supreme Court ultimately invalidated on procedural grounds. Measure 37 contains key exceptions to its compensation mandate, including a nuisance exception and a provision that limits compensation to those who purchased their land before enactment of the challenged regulation. For successful claims, government will have the choice of either paying compensation or waiving application of the challenged regulation to the claimant. And unlike Measure 7, Measure 37 is statutory, not constitutional.

It remains to be seen exactly how Measure 37 plays out in court. It has been estimated, however, that the costs to local governments could be substantial.

Property owners can start filing claims December 2nd, and all claims must be answered within 180 days. Property owners have until late 2006 to file claims based on existing regulations, but if a new land use regulation is enacted, the affected property owners have two years from the enactment date to file a claim.

It will be interesting, if not nerve-wracking, to see what Measure 37 brings in the months ahead. Because the Measure requires compensation only for those who owned affected land before the challenged regulation was enacted, it remains unclear just how much land is covered. At a minimum, state and local officials might well be gun-shy about enacting new community protections for fear of triggering compensation claims.


Nevada High Court Ruling Will Assist Future Airport Expansions

Because many major airports were designed decades ago and did not adequately anticipate future growth, they must expand to keep up with increased demand. A recent Nevada ruling will assist local officials who face regulatory takings challenges to these expansion efforts.

In County of Clark v. Tien Fu Hsu, No. 38853 (Nev. Sept. 30, 2004), the Nevada Supreme Court overturned a $22 million takings judgment in a challenge to height restrictions around McCarran International Airport, rejecting the claimants' per se, physical invasion theory of liability and ruling that their regulatory takings claim under Penn Central is unripe.

The height restrictions at issue covered the "transition zone," a federally mandated buffer zone along the approach path that provides an extra margin of safety. These restrictions did not authorize any physical invasion of the transition zone, but rather prohibited structures above a certain height in case a plane accidentally left the approach path. A group of landowners challenged the restrictions, alleging that the rules worked a physical taking. The trial court agreed.

On appeal, the Nevada Supreme Court held that "a rule supporting the notion that airport height-restriction ordinances, of necessity, effect per se physical takings, is overbroad in its reach" and embraced what it called "the modern trend" that such ordinances "as a valid exercise of police power, are not the definitional equivalent of a per se physical taking." The court noted that the property could still be further developed and that the landowners had not availed themselves of variance procedures that might yet permit taller structures.

Takings challenges involving airports are being brought across the country, and this case will be helpful precedent for municipalities. Community Rights Counsel filed an amicus brief in the case on behalf of the American Planning Association and the Tahoe Regional Planning Agency.


Smoke Did Not Cause a Taking, Idaho Court Rules
Moon v. North Idaho Farmers Assoc., 2004 WL 1717533 (Idaho, Aug. 02, 2004)

The Idaho Supreme Court rejected a takings challenge last month to a state law that limited the liability of grass seed growers who burn crop residue to recharge the soil in the late summer. Anti-burning advocates alleged that smoke from the seasonal burns impaired the use of their property and claimed that a new state law designed specifically to shield grass growers from damages claims worked a taking of their property rights.

In June 2003, a trial court ruled that the measure violated the state constitution and worked a taking of private property rights because for two months "the burning invades and destroys two of the three fundamental aspects of the plaintiff's property rights … possession and use." The Idaho Supreme Court disagreed, ruling 4-1 that the smoke at issue is not a taking because it does not impact access or complete use of the property. The court distinguished this case from Bormann v. Board of Supervisors, 584 N.W.2d 309 (Iowa 1998), which held that the right to maintain a nuisance action is an easement under Iowa law, finding no similar authority in Idaho law.

While we have sympathy for those who are harmed by the seasonal burns, regulatory takings doctrine is a blunt and dangerous implement to use to seek redress. Given that the state constitution permits the legislature to modify common law remedies, this takings challenge faced an uphill battle from the start. Anti-burning advocates are considering whether to file a petition for certiorari with the U.S. Supreme Court and may bring a new action asking a federal district judge to enjoin the burning as a health hazard, according to press reports. But if Moon is any indication, we can expect other states to enact similar legislation in the future, as well as accompanying takings challenges by property owners to defeat such measures.


Michigan Supreme Court Overturns Poletown:
County of Wayne v. Hathcock, 2004 WL 1724875 (Michigan, Jul. 30, 2004)

There are few more famous cases in property law than the Michigan Supreme Court 1981 ruling in Poletown Neighborhood Council v. Detroit. As a generation of law students knows, the ruling permitted Detroit to condemn large portions of the Poletown neighborhood and give this land to General Motors for use as an assembly plant. Well, property case law books now have to be updated, because last month the Michigan Court overruled Poletown.

In County of Wayne v. Hathcock, Wayne County sought to assemble 1,500 acres of land near the Detroit airport for a high-tech office park. A handful of landowners rebuffed the County's efforts to buy their land, so the County started condemnation proceedings. The trial and intermediate appellate courts in Hathcock upheld the condemnations as promoting a valid public use as defined by Poletown. The Supreme Court, however, called Poletown "a radical departure from fundamental constitutional principals" and declared, "we must overrule [it] in order to vindicate our constitution, protect the people's property rights, and preserve the legitimacy of the judicial branch as the expositor - not creator - of fundamental law."

Notwithstanding its blistering rhetoric, the Court left open three avenues for the use of eminent domain. A government can condemn property needed for a road, a railway, pipeline, or other "vital instrumentalities of commerce," or when the property will be owned by a private entity but still publicly regulated or publicly accessible, or when the property is dangerous or harmful to the public. This leaves room for a fair number of urban revitalization projects in struggling neighborhoods, and most likely for things like waterfront redevelopment schemes, in which public access to a place-specific amenity is central.

Poletown was celebrated by government officials for its ringing endorsement of the power of local governments to help bring jobs and hope to downtrodden communities. For many others, however, Poletown has stood for an excess of government power. Indeed, the decision has further fueled a campaign by anti-eminent domain activists who are trying, state by state, to shrink public use, and therefore eminent domain, to its narrowest possible scope.

Condemnation authority, like any government power, can be abused, but government officials must stand up to the sweeping anti-eminent domain challenges being brought across the country. Otherwise, Hathcock could signal an unwarranted, broad-based crippling of constitutionally granted government power.

JULY 2004

New York's High Court to Consider if Dolan Applies to Conservation Easements
In the Matter of Smith v. Town of Mendon

The New York Court of Appeals has agreed to hear a challenge that could have significant implications for municipal planning in the state. At issue in Smith v. Town of Mendon is the Town's requirement as a condition of approval of a site plan to construct a single-family home that the Smiths accept a conservation restriction on those portions of their site that lie within legislatively-imposed Environmental Protection Overlay Districts. The Smiths challenged the restrictions as an unconstitutional permit condition under Dolan v. City of Tigard.

The trial court rejected the Smiths' position, and on appeal the court ruled that Dolan's "rough proportionality" test is inapplicable to a condition of this type, which does not impact the Smiths' right to exclude others from their property. Aided by the Pacific Legal Foundation, which has vowed to take the case to the Supreme Court if necessary, the Smiths convinced New York's highest court to consider the question. CRC is considering amicus participation.

JUNE 2004

Court Nixes Patients' State Law Remedy But Two Justices Urge Future Fix

On June 21, the Supreme Court ruled in Aetna Health Inc. v. Davila that a federal benefits law completely preempts, and thus compels removal of, lawsuits brought in state court under state law by patients against HMOs for injuries due to unreasonable decisions not to provide insurance coverage for treatment recommended by the doctor. Community Rights Counsel filed an amicus brief in support of the patients (see our January 2004 issue), arguing that the state law claims were independent from the federal Employee Retirement Income Security Act (ERISA) and thus should not be removed from state to federal court. The Court disagreed, unanimously. It's the kind of ruling that makes you thankful there are only nine Justices on the Court.

The HMO industry is hailing the ruling as a victory for consumers because they say it will lower premiums, but it's bad news for patients who suffer harm when their health plans unfairly refuse to pay for needed medical services. If the patients sue in federal court, ERISA limits their recovery to reimbursement for the benefits they were denied; they may not recover compensation for any resulting physical harm. Ten states had passed statutes similar to the Texas law, and the ruling invalidates them all.

But the battle might not be over. Justices Ginsburg and Breyer wrote separately to "join the rising judicial chorus" urging the Congress or the Court to "revisit what is an unjust and increasingly tangled ERISA regime." They lamented the "regulatory vacuum" created by sweeping ERISA preemption coupled with cramped readings of ERISA's remedial provisions, and recommended "fresh consideration" by Congress or the Court of prior determinations that preclude make-whole relief. The issue remains very much on the horizon.

It's disappointing, from a federalism perspective, that the Court so readily allowed these cases to be snatched out of state court, thereby negating the state court's prior investment of resources and precluding that court from voicing an opinion on the case. But because ERISA preemption seems to be a world unto itself, we're hopeful that the ruling does not have much spillover effect on preemption doctrine generally.

MAY 2004

Unprecedented Test Applied in Eighth Circuit Commerce Clause Case
Klingler v. Missouri, 2004 WL 936687 (8th Cir. May 3, 2004)

As we noted in our January 2004 inaugural issue of Community Rights Report, we are now participating in challenges to federal protections that provide minimum safeguards for all communities. The Commerce Clause is the lynchpin of federal safety, environmental, and anti-discrimination legislation. In a troubling ruling involving the Americans with Disabilities Act, the Eighth Circuit recently called into question the scope of Congress's power under the clause.

At issue is a Missouri regulation requiring the disabled to pay $2 to obtain a placard denoting their right to park in spaces reserved for their use. Disability advocates challenged the regulation as a violation of Title II of the ADA and its implementing regulations, which prohibit imposition of fees based on disability status.

Over a strong dissent, the Eighth Circuit held that Congress lacked Commerce Clause authority to prohibit the state from imposing the fee because it is unclear that the fee would dissuade a substantial number of people from engaging in commerce. Given that the aggregated fees exceeded $400,000 annually, this kind of individualized economic effects test seems unprecedented. One wonders how the court would distinguish a case involving a nominal toll imposed to recoup the cost of a wheelchair ramp, or a restaurant that charges white males 10 cents less than other patrons for a meal. The plaintiffs have requested a rehearing. Stay tuned.

APRIL 2004

Lake Tahoe Scenic Review Ordinance Not a Taking
The Committee for Reasonable Regulation of Lake Tahoe v. Tahoe Regional Planning Agency,
2004 WL 718954 (D. Nev. Mar. 29, 2004)

Whole books could be written on the takings precedent emerging from Lake Tahoe. Scene of some of the most significant takings battles of the past decade, the beautiful Tahoe region is spawning still more litigation. This time, a U.S. District Court in Nevada rejected a facial takings challenge to a regional scenic review ordinance designed to regulate the appearance of residential housing along the lake's majestic shoreline.

Although the ordinance has not yet been implemented and no permits have been denied under the plan, the complaint alleged lost property values of $100 million, a figure derived by estimating a 50 percent reduction in value for reduced views. Taking this figure at face value, the court noted that the Tahoe Regional Planning Agency has been exercising "tremendous power" conferred by Nevada, California, and the federal government since 1980. In such a highly regulated environment, the court found no interference with reasonable investment-backed expectations.

The court also considered whether the regulation was "substantially related to a legitimate government interest." Applying an intermediate level of scrutiny, the court found that the ordinance was substantially related to curbing scenic degradation while allowing landowners three distinct levels of review, depending upon the impact of the development proposal. We will keep readers informed of any appeal or as-applied challenges in this latest round of Lake Tahoe litigation.

MARCH 2004

Expect Another Cert. Petition (and Denial) Regarding Species Protections

On March 1, the U.S. Supreme Court denied certiorari in a Commerce Clause challenge to federal endangered species protections for the arroyo southwestern toad. See Ranch Viejo, LLC v. Norton, 124 S. Ct. 1506 (denying cert. in No. 03-761). But just days earlier, the Fifth Circuit teed up a similar case by denying rehearing en banc with a six-judge dissent that almost certainly will prompt another petition for certiorari. See GDF Realty Investments, LTD v. Norton, 2004 WL 396975 (5th Cir. Feb. 27, 2004) (denying rehearing and rehearing en banc).

In GDF Realty, the court rejected a Commerce Clause challenge to federal protections for various species of invertebrates that reside in underground caves in central Texas. The protections undermined plans for commercial development of a 216-acre tract. Rejecting the approach used by the D.C. Circuit in Rancho Viejo, the Fifth Circuit concluded it would be improper to focus on the commercial nature of the activity being regulated, but nonetheless ruled that the protections are valid under the Commerce Clause because they promote the interdependent web of all species, which as a whole has a sufficient connection to interstate commerce to justify regulation.

On February 27, the court denied rehearing en banc, but six judges dissented, arguing that the panel's rationale is
unfaithful to recent Supreme Court teachings on the proper scope of the Commerce Clause. Because there is no genuine circuit split on the validity of these protections, the Supreme Court should, and probably will, deny cert. once again.


Principled State Amici Defend Federal Authority

In last month's issue, we mentioned that in Alaska Department of Environmental Conservation v. U.S. EPA (2004) (AEC), 13 States filed an amicus brief opposed to the position of the State of Alaska and in favor of EPA. This intriguing development by these State AGs was by no means an isolated occurrence, and we expect similar briefs to be filed in future cases.

In AEC, a bipartisan coalition of the 13 State amici -- Vermont, California, Connecticut, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Wisconsin, and the Pennsylvania Department of Environmental Protection -- successfully argued that EPA had authority to trump Alaska's determination specifying pollution control technology under the Clean Air Act. While recognizing that it might seem "counterintuitive" for States to take a position against another State, they insisted that EPA's oversight role "provides a necessary backstop and contributes to consistent application of the Act," and promotes the interest of all States "by assuring that each State carries out its obligations under the Act."

Likewise, in South Florida Water Management District v. Miccosukee Tribe of Indians (No. 02-626), a coalition of 14 States argued against the water district, contending that the Clean Water Act allows federal authorities to manage water diversions even where the source of the diversion is not the original source of the pollutants in the water. "[B]ecause watersheds do not respect political boundaries," they argued, "downstream States have a substantial interest in protecting their water bodies through the uniform processes and remedies provided by the Act against the transfer of pollutants
originating in upstream States."

State amici similarly supported federal authority in the 2001 SWANCC wetlands case and in the 2000 Morrison case involving the Violence Against Women Act, and even more remarkably they argued against sovereign immunity under the Family and Medical Leave Act in the 2003 Hibbs case. We applaud these visionary efforts by the States to look beyond the knee-jerk, federal-state power struggle, and to support the national floor of minimum protections that every community deserves.


How Consistent Are the Court's "Friends of Federalism"?

On January 21, four of the Supreme Court's so-called "friends of federalism" let out a war whoop of Deanian proportions, complaining in dissent that the Court's ruling in Alaska Department of Environmental Conservation v. Environmental Protection Agency "relegate[s] States to the role of mere provinces or political corporations, instead of coequal sovereigns entitled to the same dignity and respect." Justice Kennedy's opinion -- joined by Chief Justice Rehnquist and Justices Scalia and Thomas -- lambasted the majority's conclusion that the federal Clean Air Act authorizes the Environmental Protection Agency to override a decision by the State of Alaska determining the air emissions technology required to allow a 40 percent expansion of a large zinc mine. Specifically, the court ruled that the Act authorizes EPA to block construction or expansion of a facility when EPA decides that the State specification of "Best Available Control Technology" is unreasonably lax, even though the Act directs the States to make those determinations. The opinion is available at

Put aside, for the moment, the amicus brief filed by 13 States in support of EPA and against Alaska. A more fundamental question arises: Is the dissent's professed allegiance to federalism genuine and consistent or, as some commentators have suggested, simply a guise to advance an anti-regulatory agenda? Another Clean Air Act case before the Court this term could provide an intriguing glimpse into whether federalism still has friends among the Justices when industry groups argue against it.

In Engine Manufacturers Ass'n v. South Coast Air Quality Management District (U.S. No. 02-1343), auto manufacturers are challenging modest rules by a regional authority in southern California that require large public and private fleets to purchase cleaner vehicles. In the Los Angeles Basin, vehicles produce 80 percent of the emissions that form smog, and diesel engines account for 70 percent of the total cancer risk from air pollution. The rules are expected to reduce nearly 5000 tons of emissions per year by 2010 by introducing cleaner school buses, airport shuttles, garbage trucks, street sweepers, and other fleet vehicles.

Industry argues that the rules are preempted by section 209(a) of the Clean Air Act, which prohibits state and local governments from adopting any "standard" relating to the control of emissions. But it's clear from the Act that "standard" is a term of art that applies to limitations imposed on car manufacturers and sellers, not purchasers. Industry basically urges the court to read the Clean Air Act as creating a centralized command-and-control regime under which the federal government, rather than the affected localities, must play the lead role in addressing local pollution problems. In contrast, the courts below held that state and local authorities may pursue innovative pollution control programs targeted at vehicle purchasers, so long as they do not impose emission limits on manufacturers. Community Rights Counsel worked with the State and Local Legal Center to prepare a brief on behalf of our nation's cities, air officials, and other state and local officials in support of South Coast.

The Court heard argument on January 14. We were delighted when counsel for South Coast, Seth Waxman, expressly referred to our brief during the argument. By the end of June, we'll learn whether federalism as applied in this Term's Clean Air Act cases is a one-way street in favor of industry.


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