Takings

A Texas court has ruled that a city ordinance prohibiting all drilling of gas wells in the city took the property of a company that had leased land for gas drilling purposes and been given permits in the past to do so. The company claimed that the denial of new permits to drill and the ordinance permanently prohibiting drilling rendered their lease without any value. The court agreed since the lease was limited to a use that was now illegal. No finding was made on whether gas drilling was a private or public nuisance that would justify prohibiting the activity without compensation — despite the fact that the citywide ban effectively declared drilling to be harmful to the public. City of Dallas v. Trinity E. Energy, LLC, 2022 WL 3030995 (Tex. Ct. App. 2022). Because the court determined that the permit denials and the prohibition on drilling rendered the lease without …

City repeal of gas drilling permits held to be a Lucas taking Read More »

After the Indiana Supreme Court held that private property rights end at the high tide land, giving the public the right to use the wet sand area between the low and high tide lines, see Gunderson v. State, 90 N.E.3d 1171 (Ind. 2018), an owner sued state officials to have that judicial ruling declared to be a taking of property rights without just compensation. But the Seventh Circuit held that the state courts were competent to determine whether private property ownership extended to the tidelands in the first place and because they did not, no property rights were taken from the owner. Pavlock v. Holcomb, 2022 WL 1654038 (7th Cir. 2022). The converse, however, may not be true. Since the high courts of both Massachusetts and Maine have limited public rights in the tidelands, a statute recognizing such rights might be held to take away vested property rights. On the other hand, …

State court affirmation of public rights below the high tide line do not take property without compensation in violation of the 14th amendment Read More »

In Alford v. United States, 961 F.3d 1380 (Fed. Cir. 2020), owners complained that the Army Corps of Engineers took their properties by temporarily flooding a nearby lake, knowing it would damage the plaintiffs’ property but doing so to avoid even greater damage to their property from a breach of the levee that was almost certain to occur if the Corps had not acted and which would have resulted in the complete destruction of plaintiffs’ properties. The Federal Circuit applied the “relative benefits” doctrine and reversed the Claims Court’s finding of a regulatory taking. It found that the plaintiffs’ properties “would have been far worse off and suffered more serious damage if the government had not acted” and, for that reason, the government’s action protected, rather than took, property.

The Michigan Supreme Court has condemned the practice of keeping all the proceeds of a tax sale of property (done because of failure to pay property taxes) when the city keeps all the proceeds of the sale, even though those are far more than needed to pay the taxes that were due. Rafaeli, LLC v. Oakland County, 2020 Mich. LEXIS 1219 (Mich. 2020)

Several courts has addressed the question of whether temporary business closure orders to protect the public from Covid-19 constitutes regulatory takings of property. So far, the answer has been “no” as evident in a prominent decision of the Pennsylvania Supreme Court. Friends of DeVito v. Wolf, 227 A.3d 872 (Pa. 2020) (relying on Tahoe-Sierra Pres. Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002)).

The Federal Circuit held that two federal statutes may have effected takings of property without just compensation by preventing owners from exercising contractual rights to prepay government-insured mortgages on their housing projects which would have the effect of terminating government rent restrictions designed to keep the housing affordable by low-income families. Anaheim Gardens, L.P. v. United States, 953 F.3d 1344 (Fed. Cir. 2020). The Federal Circuit distinguished between owners who purchased the properties after enacted of the statutes from those who had purchased before the statutes were enacted. The initial agreements involve promises by developers to limit rent increases in exchange for obtaining low-cost mortgages insured by HUD (Department of Housing and Urban Development). The mortgages lasted 40 years but the developer/borrower was entitled to prepay the mortgage after 20 years and be freed from the restrictions on raising the rents. The federal “preservation statutes” were passed to eliminate the prepayment option because Congress was worried …

Federal Circuit finds potential taking of property when federal statutes denied developers the right to prepay mortgages to escape limits on rent increases Read More »

The Hawai’i Supreme Court held in Leone v. County of Maui, 404 P.3d 1257 (Haw. 2017), that a building prohibition does not constitute a per se or categorical taking of property without just compensation. “[A] regulation could potentially require land to be left substantially in its natural state and still not be considered a taking” because the land could still have significant market value and the evidence at trial was conflicting on the question of the whether the land did retain economically beneficial use. In addition, the owners had bought the property for sale for $3 million, put it up for sale at a listing price of $7 million, and received two offers at $4.5 and $4.6 million which they turned down. There was also evidence that the property could have been used for commercial purposes as a private park.

The Tenth Circuit has held that the police may destroy a home if they deem it necessary to apprehend a suspect, and that doing so triggers no obligation to pay just compensation under the fourteenth amendment. Lech v. Jackson, 2019 WL 5581699 (10th Cir. 2019). Citing a precedent from the Court of Federal Claims, Bachmann v. United States, 134 Fed.Cl. 694 (2017), the court held that the police were acting within the “police power” rather than the “eminent domain” power and cannot be burdened with the condition that they compensate whomever is damaged by their actions along the way. See also Amerisource Corp. v. United States, 525 F.3d 1149 (Fed. Cir. 2008).

The Court of Federal Claims has held the United States responsible for a regulatory taking because it created reservoirs and dams that it knew, or should have known, would overflow onto neighboring property and did nothing to stop that from happening. In re Upstream Addicks and Barker (Texas) Flood-Control Reservoirs, 2019 WL 6873696 (Fed. Cl. 2019). The case is significant because the government is not normally liable for failing to act. But as with any private tort, an omission can be a tortious act if someone has a duty to act or acts to create a situation that is inherently dangerous. In this case, plaintiff property owners claimed that the project design was defective because the Army Corps of Engineers knew that flooding was possible and that the surrounding government-owned land was insufficient to contain those waters so that neighboring property would likely be flooded in a major storm. The court …

Regulatory takings claim against United States for reservoir design that foreseeably flooded upstream properties after Tropical Storm Harvey Read More »