Takings

California Supreme Court Upholds San Jose Inclusionary Zoning Ordinance Against a Takings Challenge

/ Antidiscrimination Law, Eminent Domain, Real Estate Transactions, Takings, Zoning

The California Supreme Court has upheld the inclusionary zoning ordinance of the City of San Jose against a challenge that it constitutes an illegal exaction and violates the state constitution’s takings clause or the federal constitution’s takings clause. Cal. Bldg. Indus. Ass’n v. City of San Jose, 2015 Cal. LEXIS 3905 (Cal. 2015). The ordinance required all new development projects containing 20 housing units or more to reserve 15 percent for sale at affordable prices to low- or moderate-income families. San Jose Mun. Code, §§ 5.08.010 to 5.08.730. The Court held that the municipal government had the power to enact reasonable land use regulations designed to increase the amount and dispersion of affordable housing and that this ordinance served those ends. Because it regulated land use, it did not constitute an “exaction” or forced donation of land to public use. The Court held that so long as a land use regulation does …

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City can demolish blighted structure it believes is financially unreasonable to repair

/ Due Process, Eminent Domain, Takings

The Michigan Supreme Court overturned a lower court ruling that had held it to be unconstitutional for a city to demolish a structure that the city believes is financially unreasonable to repair even if the owner claims to want to make the repairs. The court held that it does not constitute a deprivation of due process of law to require the demolition given the fact that the owner allowed the property to become dilapidated and the city could rationally believe that demolition was the best remedy to remove the public nuisance. Bonner v. City of Brighton, 848 N.W.2d 380 (Mich. 2014).

No easement by necessity when parcel is landlocked because of eminent domain

/ Servitudes, Takings

When a taking of property by eminent domain to build a highway bifurcated a parcel, one part became landlocked but obtained access to a public road by permission over neighboring property. When that permission ended many years later and the parcel became landlocked the owner sought an easement by necessity over the neighbor’s land but the court found the traditional requirements for such an easement to be lacking. Since the parcel had not become landlocked when severed from the neighboring land there was no basis for imposing an obligation on that neighbor to create an easement for access to the roads. Nor did the owner obtain a prescriptive easement because access to the land had been by permission. No claim was made for a constructive trust or easement by estoppel, alternative theories that might have been relevant if the owner of the servient estate had induced the owner of the …

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State did not dispossess owners and thus did not “take’ lands in violation of the constitution merely by asserting ownership

/ Takings, Title Issues, Trespass, Water Rights

The Texas Supreme Court affirmed its ruling that the border between state-owned submerged lands and private lands along the coast is the “mean higher high tide line” or the mean location of the high tide line over the regular tidal cycle of 18.6 years. Porretto v. Tex. Gen. Land Office, 2014 WL 2994436 (Tex. 2014). In various ways, agents of the state of Texas has acted so as to claim public rights in property that is on the “private” or landward side of the line. The Texas General Land Office (GLO) claimed that it owns lands that the Texas Supreme Court says are privately owned; that office also requested that tax records be changed to indicate state ownership of those lands. These statements have made it harder for private owners to sell those lands. However, since the GLO ended its bid to change the tax rolls to claim public ownership of those lands …

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Supreme Court taking cases from last Term

/ Takings

In Arkansas Game & Fish Comm’n v. United States, 133 S.Ct. 511 (2012), the Supreme Court unanimously overruled the Federal Circuit decision in Arkansas Game & Fish Comm’n v. United States, 637 F.3d 1366 (Fed. Cir. 2011), that had held that deviations by the Army Corps of Engineers from a flood management plan that resulted in temporary flooding of riverfront property did not constitute a taking of property without just compensation but might constitute a tort for which compensation could be sought. The Court held that the mere fact that the flooding was temporary did not immunize the government from a takings claim. Justice Ginsburg’s opinion reaffirmed the Court’s preference for “situation-specific factual inquires” in this area, emphasizing that, with only two narrow exceptions, “no magic formula enables a court to judge, in every case, whether a given government interference with property is a taking.” 133 S.Ct. at 518. Because permanent, government-induced flooding …

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State seizure of unused traveler’s checks survives substantive due process challenge

/ Due Process, Personal Property, Takings

Kentucky had a law declaring unused traveler’s checks to be abandoned property if they are not used after a period of fifteen years; such property escheated to the state. When the legislature reduced the period from fifteen to seven, the change was challenged as a violation of due process of law. The Sixth Circuit held that the legislation was consistent with the due process clause on the ground that substantive due process requires only that the legislation be rationally related to a legitimate government interest. In this case, the legislation shortening the period from fifteen years to seven was a legitimate revenue-raising measure. American Express Travel Related Services Co. v. Kentucky, 641 F.3d 685 (6th Cir. 2013). The court refused, however, to rule on the question of whether the law effected an unconstitutional taking of property without just compensation, unconstitutionally impaired American Express’s contractual obligations, or was unconstitutionally retroactive in application.

Right of entry held to be compensable under the takings clause

/ Estates and Future Interests, Real Estate Transactions, Takings, Title Issues

The Texas Supreme Court held that a transfer of land to a city with an option to repurchase if the property were ever used for non-park purposes constituted a fee simple subject to condition subsequent and that the right of entry was a property right for purposes of the takings clause and compensable when then city failed to honor the condition. El Dorado Land Co., L.P. v. City of McKinney, 395 S.W.3d 798 (Tex. 2013). The deed provided that the conveyance was “subject to the requirement and restriction that the property shall be used only as a Community Park” and gave the grantor the right to repurchase the property at the price the city paid for it or the current fair market value whichever was less if the property were not used for the designated purpose. Although the repurchase right was called an option to purchase, the Texas Supreme Court interpreted it …

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New Jersey Supreme Court rules benefits of dunes in protecting homes must be counted against the losses from a partial taking in determining just compensation for a partial taking

/ Takings

The Supreme Court of New Jersey has ruled that benefits to the property from a partial taking must be counted against the losses in determining just compensation. Borough of Harvey Cedars v. Karan, — A.3d —, 2013 WL 3368225 (N.J. 2013). In this case, the borough government took part of the beachfront owner’s property to construct dunes to protect the property from erosion or loss during storms. The court held that just compensation for the partial taking “must be based on a consideration of all relevant, reasonably calculable, and non-conjectural factors that either decrease or increase the value of the remaining property.  In a partial-takings case, homeowners are entitled to the fair market value of their loss, not to a windfall, not to a pay out that disregards the home’s enhanced value resulting from a public project. To calculate that loss, we must look to the difference between the fair market value …

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Low flying planes may effect an unconstitutional taking of property

/ Takings

The Wisconsin Supreme Court ruled that frequent, low-flying aircraft may so interfere with the use and enjoyment of property as to constitute an unconstitutional taking of property by the state. Brenner v. New Richmond Regional Airport Comm’n, 816 N.W.2d 291 (Wis. 2012). Owners located near an airport sued the airport authority when it extended a runway in a manner that created low overflights of their property. The court held that a taking could occur if the flights were “low enough and frequent enough to have a direct and immediate effect on the use and enjoyment of property.” 816 N.W.2d at 294.

Homeowners’ Association dues lost because the property was taken by eminent domain are held not to be compensable under the takings clause

/ Estates and Future Interests, Servitudes, Takings

When a government took 14 units from a homeowners association by eminent domain, the remaining owners lost the dues and assessments that those owners would have contributed to the homeowners association. However, the Fifth Circuit has ruled that those lost assessments represent mere “contractual rights” that are not compensable under the takings clause as lost property rights even though they ran with the land. United States v. 0.073 Acres of Land, — F.3d —, 2013 WL 322242 (5th Cir. 2013). The court looked to Louisiana law to determine whether the assessments should be considered to be “property” rights and found that they were. However, it interpreted the case of United States v. General Motors Corp., 323 U.S. 373 (1945) to mean that loss of future profits from land is not compensable. The court acknowledged that it was adopting a minority view and that most courts have held that covenants are property …

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