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Community Rights Report Newsletter -
2003 Outrage of the Month Archive




DECEMBER 2003

Court Rejects Company's Efforts to Force State Buyout of Oil Leases

It would take considerable chutzpah for a venture oil company that has no income, no partners, and has never produced a drop of oil to seek a state buyout of oil and gas leases that most likely contain no mineral resources. But that's exactly what took place in the case of Coastal Petroleum Co. v. State, No. 02-4712 (Fla. Dist. Ct. App, Dec. 3, 2003) (per curiam). In a sharply-worded order, however, a Florida appellate court this month saw through the company's ruse and held that denial of an offshore drilling permit did not give rise to a taking.

The Coastal Petroleum Company acquired leases to potential oil resources in the Gulf of Mexico just north of Tampa Bay in 1941. The company made little effort to develop the resource and in 1976 entered into an agreement that obligated it to seek the necessary environmental permits before drilling. Although the Florida Department of Environmental Protection initially granted a permit in 1996, this permit was invalidated by a state court, which ruled that the environmental risks of drilling far outweighed the speculative potential of recovering oil from the lease. The company in turn filed a takings claim.

In 50 years of doing business, Coastal Petroleum has never produced any oil or made a profit, yet it sought hundreds of millions of dollars in compensation for its "losses." Circuit Judge Ralph Smith Jr. correctly rebuffed this transparent attempt to get rich off the back of Florida's taxpayers. In rescinding the permit, the court said, the state had merely exercised its contractual right to insist that the company secure permits under existing environmental laws.


NOVEMBER 2003

Property Rights "Scholar" Caught Plagiarizing PR Firm

Doesn't it seem like the property rights movement makes the same tired arguments over and over again? Now we have the explanation.

Samuel Staley is the president of a property rights "think tank" called the Buckeye Institute and a frequent apologist for sprawl. Recently, Staley and his colleague Joshua Hall submitted an op-ed to the Columbus Dispatch suggesting that Ohio privatize its workforce to save money. An alert reader noticed that the same basic text turned up two weeks earlier in a Baltimore Sun op-ed by Geoffrey Segal of the libertarian Reason Public Policy Institute.

Coincidence? No. In a meeting with the Dispatch's editorial page editor, Staley admitted that the research and text of his op-ed came from an Alexandria, Virginia, PR firm that prepares such pieces for people who will submit them (or a version of them) to newspapers in their columns.

Staley has now been barred from publishing again on the opinion pages of the Columbus Dispatch. For the full story, go to http://libpub.dispatch.com/cgi-bin/documentv1?DBLIST=cd03&DOCNUM=43688&TERMV=41566:6:46754:
6:51930:6:.


OCTOBER 2003

Let's Play Hardball

We thought we had seen it all. But the recent strong-arm tactic by the claimant's attorney in McCarran International Airport v. Sisolak, No. 41646 (Nev. S. Ct.) takes the cake.

Sisolak involves a takings challenge to county height restrictions around McCarran International Airport. The trial court awarded the landowner more than $16.6 million even though the County previously approved a development plan for the land that included a four-story resort hotel, a 33,050 square foot casino, and other structures. In light of the potential ramifications of an adverse ruling on appeal, several amici are supporting the defendants, including the American Planning Association (represented by Community Rights Counsel).

After the amicus briefs were filed, the claimants' counsel filed motions to conduct discovery on amici. That's right, discovery on amici, while the case is pending on appeal before the state supreme court. The defendants have filed hard-hitting oppositions representing to the court that amici forcefully object to this transparent effort to chill amicus participation. The court should summarily deny the motions.

UPDATE

Last month's Outrage reported on a paper by Professor Cass Sunstein and others that reached the counterintuitive conclusion that the party affiliation of judges makes no difference in the outcome of takings cases. In response to a letter expressing our concerns, we received a very generous reply from Professor Sunstein, thanking us for our views and indicating that he will take them into account as he prepares the final version of the paper.


SEPTEMBER 2003

Takings and Parties: A Skewed View from the Ivory Tower

Three academics, including Professor Cass Sunstein, have published a report concluding that while party affiliation correlates with how federal appellate judges rule on many issues, it plays no significant role in takings cases. The report (available at http://www.aei-brookings.org/publications/abstract.php?pid=374) concludes that "Republican and Democratic appointees vote essentially alike" in takings cases.

Our flabbers have never been so gasted. Consulting with other practictioners, we had a hard time thinking of a single, recent federal appeals court case finding a taking that did not involve a panel with a Republican majority. (We came up with one from 1992, Nixon v. U.S., a D.C. Circuit ruling involving presidential papers.) Deep ideological division characterized Tahoe-Sierra in the Ninth Circuit, with the denial of rehearing en banc pitting Judge Alex Kozinski and three other Republican appointees against Judge Stephen Reinhardt and other Democratic appointees. The Fifth and Ninth Circuits produced party-line divisions in takings challenges to IOLTA programs. These and other rulings led us to question how the report could reach such a counterintuitive conclusion.

First, we believe the Paper's methodology underemphasizes the role of ideology by focusing on absolute numbers, disregarding the relative importance of individual cases. Suppose a balanced mix of judges were to reject takings challenges to 100 routine land-use decisions, but Republican-appointed judges sustained three takings challenges that gutted key protections for endangered species, wetlands, and public lands. The absolute numbers might suggest no significant ideological influence, but the results could constitute a radical revolution in the law.

Second, the results might well be skewed by the rules imposed on takings claimants under Williamson County. Developers frequently disregard these requirements, resulting in a large number of federal appellate rulings rejecting takings claims on procedural grounds. These procedural dismissals, however, are explained not by a lack of sympathy for takings claims on the merits, but by a desire to avoid premature adjudication.

Third, the Paper appears to disregard rulings from the Federal Circuit, the court with exclusive appellate jurisdiction over the vast bulk of takings challenges to federal protections. Those who litigate in the Federal Circuit know all too well that party affiliation plays a significant role in takings cases. The same ideological division holds true at the U.S. Court of Federal Claims. Consider the rulings by this court that federal wetland protections constitute a taking; all but one were rendered by a single Republican-appointee, Judge Loren Smith.

We have expressed these concerns in a letter to Professor Sunstein and eagerly await his response.


AUGUST 2003

Rightly Criticizing for the Wrong Reason

In an August 1 speech on judicial nominees before the American Constitution Society, Senator Hillary Clinton criticized the Federalist Society for arguing that the 1954 ruling in Brown v. Board of Education created a "Constitution in Exile" that needs to be restored. And she implied that the Bush Administration is committed to appointing federal court nominees who would revive the Constitution in Exile and, among other things, undermine Brown. She's right to warn of the effort to revive this
so-called Constitution in Exile, but wrong about the alleged connection to Brown.

Chief Judge Douglas H. Ginsburg of the D.C. Circuit coined the phrase "Constitution in Exile" in a 1996 book review to describe the non-delegation doctrine and a host of other legal theories he believes courts have wrongly neglected. In addition to the non-delegation doctrine, Chief Judge Ginsburg highlighted an expansive takings jurisprudence and a revitalized approach to substantive due process as part of the Constitution in Exile whose return he is working to achieve.

In 1999, Chief Judge Ginsburg attempted to resurrect the Constitution in Exile by using an extreme application of the non-delegation doctrine to strike down clean air protections that prevent thousands of premature deaths each year. That decision was short lived, however, because Justice Antonin Scalia authored a unanimous opinion reversing the ruling, a repudiation aptly characterized by former Solicitor General Seth Waxman as a "thoroughgoing rebuke of the D.C. Circuit's little escapade."

Given the threat posed by the Constitution in Exile theory to environmental safeguards and other community protections, as well as its promotion of radical takings theories, we welcome public exposure of its many flaws. But Senator Clinton erred badly in linking the project to Brown. Elsewhere in the speech, she reprised her "vast right wing conspiracy" rhetoric to suggest that the conspiracy (presumably including the Bush Administration and its judicial nominees) would, among other things, return us to the days "before Brown when people were told that in this country we should try to integrate our schools and provide equal opportunity in fact, not just in theory." But when asked about Brown, nominees have tripped over themselves to explain why their views are consistent with that ruling. While some nominees are open in their desire to revise precedents in takings and other areas, there is no evidence that any of them would urge a reconsideration of Brown. Given Brown's preeminent place in our law and society, it is no small thing to accuse your political opponents of seeking to undermine it.

The Constitution in Exile theory no doubt deserves its own Outrage column, but credible opposition to the theory is undermined by ill-informed allegations. When evaluating judicial nominees, we should focus on threats that are real, not imagined.


JULY 2003

Property Rights Extremist Nominated to the D.C. Circuit

Our April 2002 Outrage was devoted to the latest in a series of wacky expositions on takings law written by California Supreme Court Justice Janice Rogers Brown. Justice Brown's dissent in San Remo v. San Francisco (2002) began with the assertion that "Private property * * * is now entirely extinct in San Francisco," (query: if this is true, why does a row house on Nob Hill cost $1 million?), and went downhill from there.

Responding then to rumors that Justice Brown had somehow found her way on to President Bush's short list of potential Supreme Court nominees, we expressed the hope that President Bush would think hard about this judge's radical views on property before nominating her to the U.S. Supreme Court. One might say we got our wish, but the net result is not much better. Last week, President Bush nominated Justice Brown to a lifetime position on the U.S. Court of Appeals for the D.C. Circuit.

While takings cases represent a miniscule part of the D.C. Circuit's caseload, the circuit has exclusive jurisdiction over many challenges to important health, safety, and environmental protections. Justice Brown's position that government regulation can only be sustained if property owners would agree in advance that the regulation is "appropriate and mutually beneficial" suggests that she could have a field day on the D.C. Circuit striking down such regulations. But as the majority declared in response to Brown's dissent, "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." The Constitution simply "does not enact the late Robert Nozick's 'Minimal State.'"

Justice Brown is not the only property rights extremist nominated by this President. Lawrence Block, a chief architect of the radical takings compensation legislation proposed as part of the Contract with America, is already a judge on the Court of Federal Claims. Victor Wolski, a former Pacific Legal Foundation lawyer and self-professed ideologue on property rights issues, was also confirmed to the CFC on July 9, 2003, by a contentious 54 - 43 vote. The nomination of Justice Brown, whose views often mirror those of extreme property rights theorist Richard Epstein, should be given the closest scrutiny by the U.S. Senate.


JUNE 2003

The Blame Game

Prior to Tahoe, during the many years that state and local officials endured a takings victory drought of biblical proportions in the U.S. Supreme Court, they generally took their lumps with civility. Disagreements with outcomes and rationales were expressed with dignity and decorum.

Not so with many developer lawyers, whose losses provoke howls of protest that question not only judicial reasoning but judicial integrity. For example, on the American Bar Association's LANDUSE Listserve, one member of the claimants' bar recently blamed his losses on judicial deception: "This treatment cannot be attributed to ignorance. It is uniform judicial mendacity stemming, I guess, from the judges' membership in the elite group that enjoys sovereign immunity, and, therefore, total unaccountability. * * * I think reform is impossible. Demonstrating mendacity to those who want to believe in our system of justice is too difficult because of the number of half-truths that obscure every case."

This diatribe is by no means an isolated example. Michael Berger and Gideon Kanner have accused the Eleventh Circuit of a "morally scandalous performance" and denounced the entire judiciary for "callous insensitivity to constitutional rights" and "years of quite deliberate judicial obfuscation of takings law." 38 Santa Clara L. Rev. at 874 n.145, 881-82. And as we noted in our July 2001 Outrage column, Pacific Legal Foundation questioned Justice Stevens' opinion in Palazzolo by dismissing him as senile.

Civility toward judges enhances public confidence in the judicial system. We applaud state and local government counsel for taking the high road and encourage our brethren on the other side to do the same.


MAY 2003

NAHB Nixes APA Award

Mary Umberger of the Chicago Tribune reports that Professional Builder, a developers' trade magazine, has revoked an award it planned to give to the American Planning Association to honor the APA's "Growing Smart Legislative Handbook," a collection of model ordinances designed to promote smart growth.

The magazine had planned to present the award at the 2003 convention held by the National Association of Home Builders in Las Vegas, but it was pressured to quash the prize after howls from some of its readers and the NAHB. Umberger writes that the NAHB, which has no official connection to the magazine, has devoted an entire section of its website to criticism of the APA's Guidebook, and so it comes as no surprise that they would not tolerate developer praise for the APA's work. What does surprise and outrage is that the editors of Professional Builder, who obviously saw some merit in the APA's work, could be so easily bullied. Many developers embrace reasonable smart-growth initiatives like those advanced by the APA, and it's a shame that the developer press is not allowed to speak this simple truth.


APRIL 2003

A Red Under Every Bed?

In February, we described the proposed agenda of the "Preserving the American Dream" conference, which was recently convened in our Nation's capital by the property rights movement. In an on-the-scene update, Philip Langdon of the Hartford Courant reports that the conference was marked by over-the-top rhetoric and unseemly proposals. Langdon writes:

"David Strom of the Taxpayers League of Minnesota, urged opponents of smart growth to 'be relentless in undermining the credibility of your opponents.' Strom depicted pro-transit leaders as practitioners of of social engineering. * * * 'We made it sound like they were a bunch of commies.' Strom told smart-growth opponents to wage merciless attacks. 'We often make the mistake of assuming this is a battle over who has the better facts,' he said. Quite the contrary, whether smart-growth policies are adopted will hinge, he asserted, on whether voters can be persuaded that the typical smart-growth leader is 'a pointy-headed intellectual fascist' trying to ruin people's lives."

Not to be outdone, Jon Caldara from the Independence Institute urged anti-smart-growth forces to avoid looking like "cranky white men" by casting smart growth as harmful to minorities and women. While it comes as no surprise that the property rights movement is substituting rhetoric for facts, Langdon deserves kudos for laying the strategy bare in dramatic fashion. His article appears at http://www.ctnow.com/news/opinion/commentary/hc-plclangdon0302.artmar02.story


MARCH 2003

A Bad Month For the CFC

Community Rights Counsel and a broad coalition of public interest groups adamantly opposed Larry Block when he was nominated to serve on the U.S. Court of Federal Claims (CFC) primarily because he was a leading promoter of extreme federal takings compensation and ripeness bills.

Our main concern, that Mr. Block (now Judge Block) would issue extreme takings rulings, has proven unfounded to date. A check of the CFC website suggests that Mr. Block has not yet issued a single ruling on any case in his five months as a CFC Judge. According to a statement by Senator Patrick Leahy, the real concern appears to be that Block is up to his old tricks:

I understand that [Judge Block] has spent a great deal of time working on legislative matters from the bench in the past few months, which causes me some concern as well, given our Constitution's separation of powers and the need for confidence that judges are not engaging in the political process or continuing past political activities.

This adds support to our December 2002 Takings Watch report, which discussed the relative paucity of cases for CFC judges. We seem to have a Takings Watch reader at The Washington Post, because many of the issues raised in our December issue were echoed in a March 26 Post editorial calling for CFC to be abolished. Meanwhile, the Senate is rushing to confirm four new judges to the CFC, including Victor Wolski, an avowed libertarian and former attorney for the radical Pacific Legal Foundation who has bragged that "every single job I've taken since college has been ideologically oriented, trying to further my principles." What a mess.


FEBRUARY 2003

Dream or Nightmare: You Make the Call

On February 23, property rights activists gathered in our nation's capital to attend a three-day conference on "Preserving the American Dream." Keith Schneider, a regular contributor to The New York Times and Deputy Director of the Michigan Land Use Institute, rightly denounces the conference as designed to promote the "right to build anything, anywhere."

According to Schneider, the proposed American dream is based "on cars, cheap fuel, and suburban sprawl" and will be advanced by "opposing public transit, ending zoning, paving over farmland, and taking other measures to ensure that sprawl survives." Agenda topics include "Selling the Idea of Autos and Highways" (newsflash: they're already pretty popular). Among those encouraged to attend are "opponents of traffic calming measures," presumably because their right to careen around our neighborhoods has been deeply eroded by speed bumps.

Conference cosponsors included unbiased, middle-of-the-road groups like the Tennessee Road Builders Association and the omni-present homebuilders. To read Keith Schneider's excellent critique, go to http://www.mlui.org/growthmanagement/fullarticle.asp?fileid=16423


JANUARY 2003

Massachusetts Cigarette Disclosure Law Goes Up in Smoke
Philip Morris v. Reilly, 312 F.3d 24 (1st Cir. Dec. 2, 2002) (en banc)

The First Circuit ruled last month en banc that a Massachusetts law requiring tobacco companies to give the state detailed lists, including relative amounts, of the ingredients of cigarettes and tobacco products sold in the state was an unconstitutional condition that took the companies' property in violation of the Fifth Amendment.

The law, which allowed for public disclosure of these ingredient lists in the interest of reducing risks to public health, "essentially destroys the tobacco companies' trade secrets," Judge Juan Torruella wrote in the lead opinion. In a blatant example of judicial second-guessing of reasonable legislative determinations, Torruella concluded: "I simply am not convinced that the Disclosure Act . . . really helps to promote public health." Torruella noted that while two other states, Minnesota and Texas, require some disclosure of additives to tobacco products, neither makes complete product content and ingredient ratios available to the public.

The decision's rejection of what seemed settled law is surprising and disturbing. As far back as 1919, the U.S. Supreme Court held that manufacturers who sell goods in the stream of commerce can be required to disclose the ingredients. In Corn Prods. Refining Co. v. Eddy, the Court said "it is too plain for argument that a manufacturer or vendor has no constitutional right to sell goods without giving to the purchaser fair information of what it is that is being sold." Likewise, in Ruckelshaus v. Monsanto Co. (1984), the Court held that the government could disclose trade secrets submitted by a company in exchange for the ability to sell a product to the general public. So long as the company is aware of the government's ability to reveal the information and the regulation is rationally related to the government's legitimate interest in protecting public health, under Monsanto there is no taking.

The original three-judge panel in the case, which included a senior judge and district court judge, rejected Philip Morris's takings claim. In an unusual rehearing en banc with only three judges participating, Judge Selya concurred in the result but rejected Torruella's reasoning, and Judge Lipez dissented. Because the three judges on the en banc panel could not agree on a rationale, the precedential effect of the ruling is questionable. The state has until March to decide whether to petition the U.S. Supreme Court for review.

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