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Takings Watch Newsletter -
2002 Outrage Of The Month Archive


Hold Your Nose Around These Takings Claims

It's bad enough when mining companies, developers, and other landowners abuse the Takings Clause for financial gain. But it is both short-sighted and hypocritical when municipalities and other public agencies do the same.

Officials in Kings County, California, advise that takings challenges are being brought against county protections prohibiting the use of certain kinds of sewage sludge as fertilizer on farms. Although the county still allows the application of "Exceptional Quality" sludge (an oxymoron if there ever was one), sludge that contains excessive pathogens and other contaminants that threaten public health are banned, subject to appropriate amortization periods. One might expect aggressive applicators to sue, and they have. But a large sanitation district also has sued the county under the Takings Clause. And the real parties in interest behind the applicators' lawsuits are large urban municipalities that want cheap disposal of their sewage sludge.

We hope that the public agencies pushing these suits come to their senses before they establish takings precedent that will come back to haunt them in the future.


The Devious Dog in the Manger

As noted in last month's Takings Watch, the claimants in the IOLTA takings case pending before the Supreme Court suffer no economic harm from IOLTA and thus have nothing to gain economically from their campaign against the program. This circumstance prompted one judge to compare the claimants to the dog in Aesop's fable who refused to let the cow into the manger to eat hay, even though the hay was no use to the dog.

In recent months, Washington Legal Foundation's barking has become even more mean-spirited. In a September 2002 fundraising letter, WLF tells potential donors that IOLTA supports "radical legal groups all across the country" and suggests that IOLTA funding goes to left-leaning political groups. The truth is that IOLTA funding goes to groups that provide legal services to the impoverished. In other words, WLF is misleading its supporters about the nature of IOLTA-funded legal services in order to raise money to support its anti-IOLTA crusade. An amicus brief filed by AARP and others accurately describes WLF's fundraising letter as a "gross mischaracterization" of IOLTA and provides many real-world examples of how IOLTA has helped poor people fight unjustified evictions from their homes, protected the elderly from fraud, assisted the indigent in coping with medical crises, and addressed myriad other legal issues faced by those who otherwise could not afford representation.

Hats off to AARP and its fellow amici for setting the record straight. And shame on WLF for distorting the truth for the sake of a buck.


An Argument for the Birds

At CRC, we are all for military readiness, and we believe that land use and environmental laws should be flexible enough to ensure a strong national defense. That said, in Center for Biological Diversity v. Pirie, 191 F.Supp.2d 161 (D.D.C. 2002), the Bush Administration went off the deep end in seeking to exempt certain Department of Defense activities from federal environmental protections.

At issue was the venerable Migratory Bird Act of 1918, one of the oldest and least controversial environmental statutes on the books. As Rep. Dingell has observed, "We have fought two World Wars, the Korean War, Vietnam and the Persian Gulf War with this law in place, and there is no demonstrated need to exempt the Department of Defense now."

When environmental groups and bird-watchers filed a lawsuit under the Act claiming that Navy bombing exercises in the Pacific were killing native bird populations, the U.S. Department of Justice responded by adopting some jaw-dropping arguments advanced in an amicus brief whose filing was rejected by the court. DOJ maintained that live-fire exercises protect wildlife by keeping people off the island. DOJ also contended that bird-watchers would actually benefit from decimated bird populations, asserting: "In some respects, bird-watchers get more enjoyment spotting a rare bird than they do spotting a common one."

Federal District Court Judge Emmet Sullivan pointedly instructed DOJ lawyers to "refrain from making or adopting such frivolous arguments in the future." We hope they get the message.


Company's SLAM Suit Threat Riles Texas Community

The aluminum manufacturing giant Alcoa reportedly has turned to threats to coerce local officials in Bastrop County, Texas to approve its mining plan, and local citizens and officials are feeling the heat.

Alcoa wants to mine lignite in an area transversed by county roads and two state highways. Alcoa wants the roads moved. It is willing to pay relocation costs, but that is not the point.Local officials want to go slow, if at all, because the proposed mine would dramatically impair 16,000 acres in Bastrop and adjacent counties, and could seriously impact groundwater in the region. Alcoa's aluminum smelting plant in Rockdale, Texas is the largest in the country and is thought to emit more air pollution than any other industrial facility in the state.

Alcoa wants a deal right away, and they're playing hardball to get one. Alcoa's lawyers are saying Bastrop County could be liable for up to $120 million in takings compensation if the company is not allowed to mine lignite under the county's roads. The threat of such a huge judgment has county officials nervous since their total annual budget is roughly $10 million.

This imbalance is nothing new for local governments. Most small cities and towns in America are like Bastrop County, generating less than $10 million in annual revenue. Indeed, 90 percent of these communities maintain populations of less than 10,000 people and cannot afford even one full-time municipal lawyer to defend against the well-financed litigation efforts of the development industry and the so-called property rights movement. We call these frivolous legal actions SLAM (Strategic Litigation Against Municipalities) suits, and we are seeing more and more SLAM suits every day.

County officials are reportedly seeking the advice of outside counsel to help them assess Alcoa's takings threat. Let's hope they get some good advice. And shame on Alcoa for turning to threats and bluster to intimidate local officials seeking to protect the public interest.


An Advocate's Spin on Tahoe-Sierra

Counsel of record for the claimants in Tahoe-Sierra recently gave new meaning to the term "zealous advocacy." Offered space for his views in the June 2002 issue of the American Planning Association's "Land Use Law and Zoning Digest," Michael Berger used the opportunity to blast the APA for filing an amicus brief in support of the Tahoe Regional Planning Agency in Tahoe-Sierra, accusing the APA of "moral nonsense," suggesting that it is "a hired gun for local government," and exhorting it "to grow up." Mr. Berger ends his rant by comparing professional planners to Senator Joseph McCarthy (!?!), asking the APA: "Have you no shame?"

It's Mr. Berger who appears to have some growing up to do. Mr. Berger should at least acknowledge that his theory of the case - that any temporary ban on all use, no matter how reasonable, is a taking - was an extreme one. Mr. Berger argued that a ten-minute denial of all use is a taking, a theory so radical that even the dissent refused to embrace it. Plainly the APA, concerned with the efficacy of land-use moratoria, a commonplace and important planning tool, had reason to oppose this argument and side with TRPA.

Mr. Berger also needs to check his facts more carefully. His excoriation of the APA is strewn with the same misstatements that characterized his briefs. He asserts, for example, that TRPA permanently prohibited any use of "virtually all" of the lots at issue. Yet, as noted at oral argument, a pretrial order shows that many of the claimants may build under the 1987 Regional Plan now in effect. And at trial, an expert appraiser testified that even during the moratorium, restricted lots retained reasonable economic value on the open market.

To these errors, Mr. Berger adds a remarkable new misstatement, asserting that landowners subject to the moratorium were "randomly selected individuals." Every parcel of land at issue in the case was included in the moratorium based on extensive scientific evidence showing that uncontrolled development of the lot would contribute to the continued destruction of Lake Tahoe. The claimants never seriously questioned the science that supports the selection of their lots for land-use controls. Indeed, the trial court found "that further development on high hazard lands such as the plaintiffs' would lead to significant additional damage to the lake. * * * There is a direct connection between the potential development of plaintiffs' lands and the harm the lake would suffer as a result thereof. * * * Although unwilling to stipulate to the fact that TRPA's actions substantially advanced a legitimate state interest, the plaintiffs did not seriously contest the matter at trial."

In the face of this finding, uncontested on appeal, Mr. Berger now asserts that TRPA selected the restricted lots at random. We trust that planners and others who read the APA "Land Use Law Digest" will be able to discern the difference between truth and spin.

JULY 2002

For several months, the American Bar Association's Committee on Ethics and Professional Responsibility has been considering whether to issue new ethical guidance for judges regarding the dubious practice of accepting free seminars at resort locations funded by corporate litigants or ideological philanthropists, seminars that frequently present a slanted view of the issues. Although CRC has been at the forefront of investigating and criticizing this practice, we have played no role in the ABA's substantive deliberations.

So we were more than a little surprised to learn that Leonidas Ralph Mecham, Executive Director of the Administrative Office of the U.S. Courts, recently sent a memo to the Chief Justice of the United States and members of the Judicial Conference accusing the ABA of "relying almost entirely" on CRC in formulating its ethics opinion and accusing CRC of opposing judicial junkets to "advance the interests of its financial contributors."

We're flattered that Mr. Mecham would think that the 400,000-member ABA needs to rely "almost entirely" on our five-person shop. But his memos to the Chief Justice need some rudimentary factchecking. In follow-up correspondence, the ABA forcefully refuted the notion that CRC or any other organization has played a role in the formulation of the ethics opinion. Indeed, the ABA does not discuss such deliberations with any outside group except for the judges that serve on the Ethics Committee's judicial advisory board.

Moreover, Mr. Mecham's assertion that CRC's judicial watchdog activities seek to advance the interests of its financial contributors is, simply put, Orwellian. We have exposed these trips because they advance the interests of those who fund them at the expense of the appearance of impartiality. CRC's funding comes entirely from independent foundations that care about environmental protection, land use policy, and judicial independence. And our clients include groups like the American Planning Association and the National Governors Association, not organizations typically viewed as having a particularly nefarious philosophical and economic agenda. Our goal is to promote a judiciary that is independent, impartial, and above reproach.

Mr. Mecham seems bent on opposing any additional ethical restrictions on judicial junkets, an opposition so vehement that he shoots first and asks questions later. We won't hold our breath waiting for an apology.

JUNE 2002

California Takings Initiative Qualifies for Ballot

Smart growth advocates in California's pristine Nevada County face an ominous challenge in November. The Nevada County Elections Office announced May 24 that the "Property Owner Claims Reimbursement Process Initiative" had qualified for the ballot in this year's election. The initiative, promoted by the California Association of Business, Property and Resource Owners, would require the county to pay property owners for land-use regulation that diminishes the value of their property (subject to a narrow nuisance exception). The initiative would also allow property owners to present such "takings" claims directly to the Superior Court, without first seeking lower court review.

Such a "one-size-fits-all compensation mandate" would seriously increase the cost of community protections, hindering the county's ability to manage its growth and react to changing conditions. Moreover, by bypassing normal procedural and legal requirements for establishing a takings claim in the courts, the proposed initiative threatens to displace 200 years of takings jurisprudence. All of this has the American Planning Association "watching in horror" and the Pacific Legal Foundation, which helped with early drafts of the proposal, predictably cheering.

If passed, the initiative would serve as a dangerous precedent for municipalities throughout the region. Nevada County voters will decide the fate of this referendum - and the county's community planning efforts - in November.

MAY 2002

"Takings Retreat Report" Rears Its Ugly Head

Readers may recall that a few years ago, the International Municipal Lawyers Association, the U.S. Department of Justice, and many others persuaded the ABA Section of State and Local Government Law not to ratify something called the "Takings Retreat Report." The report proposed changes to takings law that would have greatly benefited claimants at the expense of state and local governments. Of particular concern were recommendations that tracked arguments made by the National Association of Home Builders in support of NAHB's federal takings bill, which purported to rewrite the ripeness requirements articulated in Williamson County Reg'l Planning Comm'n v. Hamilton Bank (U.S. 1985).

The report's bias was no surprise given the developer lobby's disproportionate influence at the retreat. Due to the robust opposition to the retreat report voiced by IMLA and others, the ABA Section declined to approve it. Some might have concluded that we could move on to other things.

Not so fast. Like the hockey-masked killer Jason in the "Friday the 13th" movie series, the retreat report has returned from the dead. In a brief recently filed with the U.S. Court of
Appeals for the Eighth Circuit, Michael Berger, Gideon Kanner, and NAHB cite the retreat report in an effort to get the Court to ignore Williamson County's clear mandate that takings claims against state and local governments be filed in state court.

Because Berger and Kanner were part of the retreat organizing committee, surely they know that the report states that "the Retreat did not advocate change in the essentials of the Williamson County ripeness requirements [because] there was no consensus on such changes." They also must know that when the ABA recently published the report (along with IMLA's comprehensive opposition) as part of a larger collection of essays on takings, the ABA included a disclaimer that "the retreat report should not be cited as reflecting the position of the ABA or the ABA Section of State and Local Government."

CRC plans to file an amicus brief to apprise the Eighth Circuit of these details. If readers encounter citations to the retreat report in other contexts, CRC asks that you let us know immediately so that we may make an appropriate response. Together, hopefully we can usher Jason to his final resting place.

APRIL 2002

Is Private Property "Extinct" in California?

Pop quiz! Who recently wrote the following? "Private property, already an endangered species in California, is now entirely extinct in San Francisco. * * * [T]he property right is now -- in California, at least -- a hollow one."

Given the over-the-top tone, one might guess that the author was Gideon Kanner, one of the shrillest pro-developer voices in the takings debate, or perhaps Richard Epstein, who candidly acknowledges that his vision of the Takings Clause casts into doubt the constitutionality of zoning, progressive taxation, and many other reforms of the 20th Century.

But this jarring pronouncement comes not from an overcharged advocate or detached academic, but from a jurist, Justice Janice Brown of the California Supreme Court, who is reputed to be on the short list of potential nominees to the U.S. Supreme Court. Justice Brown reached this startling conclusion in her lone dissent in San Remo v. San Francisco (2002), a case in which the Court upheld San Francisco's efforts to address its affordable housing crisis by limiting the ability of residential hotels to convert to tourist use (see Feature Case in the March 2002 Takings Watch).

This result was too much for Justice Brown, who seems prepared to deem many community protections to be takings. After accusing San Francisco of being a "kleptocracy," she stressed that in her view the "[r]estriction of any one of the several rights that constitute private property in effect takes that property." This radical view of takings would call into question myriad land use controls. The San Remo majority flatly rebuffed Justice Brown's activism: "However strongly and sincerely the dissenting justice may believe that government should regulate property only through rules that the affected owners would agree indirectly enhance the value of their properties, nothing in the law of takings would justify an appointed judiciary in imposing that, or any other, personal theory of political economy on the people of a democratic state."

One hopes that the President will think hard about her radical views on property - and the turmoil that her nomination would cause - before nominating her to the highest court in the land.

MARCH 2002

According to the Newark, NJ Star-Ledger, James Burling of the Pacific Legal Foundation believes that in the wake of Palazzolo v. Rhode Island (U.S. 2001), smart growth is now "doomed." Burling also is quoted as saying that "the best characterization of smart growth is that smart growth is dumb takings" and that smart growth is "ultimately incompatible with the protection of property rights."

This hyperbolic assessment of the impact of Palazzolo is remarkable because Burling and PLF have yet even to win a victory for Mr. Palazzolo. The Supreme Court's remand of the case is yet another limited ruling from which both sides of the debate may draw support.

Far from being incompatible with property rights, smart growth enhances the property rights and property values of most Americans by making our communities better places to live. Smart growth will easily survive Palazzolo and the overheated exaggerations of developers' lawyers.


A Takings Claim for the Birds

The so-called property rights movement is famous for using the proverbial “widow in a wheelchair” to put a sympathetic face on their efforts to roll back health, safety, and environmental protections. Well, it may be that the community rights side has found a poster child of its own: his name is Tony Silva. Mr. Silva is a convicted criminal seeking compensation under the Takings Clause for the value of his ill-gotten booty in Silva v. United States, 2002 WL 62982 (Fed. Cl. Jan. 11, 2002).

Tony Silva's brazenness was extraordinary even before he filed his takings claim. According to the U.S. Department of Justice, Silva is one of the world's most ruthless wildlife smugglers, conspiring with his mother and others to run a nine-year, multimillion-dollar ring in which rare hyacinth macaws and other exotic birds were captured from the Brazilian rainforest and sold in the U.S. for as much as $10,000 apiece. The birds were transported in the false bottoms of suitcases and in other inhumane ways. All the while, Silva established himself as an internationally renowned author and advisor to bird owners, regularly denouncing wildlife smuggling in his writings.

Illegal wildlife trade like Silva's is a $5-billion-a-year business, the second most profitable black market in the world (behind drugs and ahead of arms smuggling). In 1996, Silva pleaded guilty to conspiracy and tax evasion. The trial court sentenced him to 82 months in prison.

During its investigation, the United States executed a search warrant and collected 103 of Silva's parrots. According to the trial court, Silva then abandoned the birds, and they were distributed to various persons and institutions for research. Silva filed a habeas corpus petition requesting return of the parrots, but the trial court denied relief.

Silva then filed a takings claim seeking compensation for the value of the 103 parrots and their potential progeny. On Jan. 11, 2002, the U.S. Court of Federal Claims ruled that it did not have jurisdiction under the Tucker Act to hear the claim because it was, in essence, a request that the court "intervene in the district court's enforcement of the criminal law in the guise of a takings claim." The court concluded that "it is unreasonable to hold that, in enacting the Tucker Act, the Congress intended [the Court of Federal Claims] to intervene in the conduct of criminal trials * * *."

If accepted, Silva's radical takings theory could generate claims by drug dealers, arms smugglers, and others who regularly deal in contraband. Because Silva is representing himself pro se, it would not be surprising to see an appeal before this claim finally flies away.


PERC vs. Osama bin Laden?

In our September 2001 newsletter, we lamented that certain politicians and special interest groups were exploiting the tragic events of September 11th to promote their policy agendas. As galling as those early exploiters were, they were pikers when compared to PERC, the Political Economy Research Center in Bozeman, Montana, which bills itself as the "Center for Free Market Environmentalism."

PERC's radical brand of free market environmentalism goes far beyond emissions trading and other market-based proposals that merit thoughtful attention. For example, PERC supports passage of a federal takings bill that would gut federal environmental protections, and it advocates auctioning off much of the nation's public land to the highest bidder.

So, what does selling the Grand Canyon to Disney have to do with Osama bin Laden? We're given the answer in a November 29, 2001 fundraising letter by PERC Chairman John Tomlin, who has the temerity to make an explicit appeal for donations to PERC based on the September 11th attacks. Mr. Tomlin begins the letter by observing: "At PERC, we have asked ourselves what is the role of free market environmentalism in a world rocked by terrorism and a sense of insecurity." As one wag put it, you might as well ask: “What is the role of broccoli in an MRI exam?” None, as far as we can see.

Undeterred, Mr. Tomlin continues: "When we thought about what is under attack, we realized that the terrorists are threatened by those core principles on which PERC was founded." Huh? The terrorists have proffered a number of bogus excuses to justify their evil actions, but so far free market environmentalism has not made the list.

Then comes the monetary appeal: "As we stand strong against this menace * * * we need your continued support, now more than ever.” We hope that any recipient of the PERC fundraising letter will instead direct a donation to one of the charitable groups providing assistance to the September 11th victims and their families.

Our thanks goes to Dick Schneider, professor at Wake Forest Law School, for bringing PERC’s letter to our attention.

To read Outrage of the Month from our 2001 issues, click here.

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