October 28, 2017

Weekly litigation report — October 28, 2017

By James S. Burling Vice President for Litigation

City sells townhouse, demolishes it, and then sends new owner bill for the demolition

Representing David and Lourdes Garrett, PLF filed  this opening brief in the Fifth Circuit Court of Appeals to challenge New Orleans’ unconstitutional destruction of a townhouse on their property. The facts are outrageous: They bought property from the city itself, which then, four months later and without any notice to the Garretts, sent in a wrecking crew and demolished their building. When the Garretts complained, the city billed them $11,000 for the demolition. When they sued, a federal district court added insult to injury by tossing their lawsuit, which sought vindication of their due process, Fourth Amendment, and just compensation rights, on the theory that they had to pursue relief in state court instead. The appeal, Garrett v. City of New Orleans, argues that the Garretts deserve their day in court and compensation for the unconstitutional demolition of their property.

PLF files a motion for summary judgment challenging the constitutionality of Seattle’s tax on achievement

Earlier this week, PLF filed a motion for summary judgment in Shock v. City of Seattle, challenging the constitutionality of Seattle’s decision to levy an income tax targeting so-called “high earning” residents. The Washington State Constitution demands that any tax imposed on property—income is property—be uniform upon all citizens. Despite several State Supreme Court cases upholding this ban on discriminatory taxation, the City of Seattle adopted an income tax targeting those who earn total incomes in excess of $250,000 per year with a 2.25% tax rate, setting a 0% rate for everyone else. Sold as a “wealth tax,” the City’s income tax aims to punish achievement and success, while threatening poor and middle class families who could fall subject to new city, county, and state taxes if Seattle’s actions went unchallenged.

PLF’s motion argues that the City knowingly violated the law by seeking to exclude ‘income’ from the state constitutional protections for property. Indeed, the City is asking the trial court to overturn 70 years of Supreme Court case law characterizing an individual’s income as property, thereby stripping it of a whole host of statutory and constitutional protections. PLF argues that the constitution prohibits this type of cynical attack on individual rights. Moreover, PLF argues that the City’s decision to measure “high-earners” by their total income, rather than their actual take-home pay, subjects many middle class families to the “wealth” tax. For more on Shock v. City of Seattle, see our blog post here.

PLF comments on guide to California’s navigable waters.

On Tuesday, PLF submitted comments to the California State Lands Commission on its draft public access guide to California’s Navigable Waters. The Guide purports to restate the law related to public use of waterways within the state, but it leaves much to be desired – especially for property owners. Specifically, the Guide implies that California has much greater authority over private property than is justified by the relevant law. PLF’s comments focus on the limits of the common law public trust doctrine, and reiterates the strong protections the Constitution provides for property owners. PLF hopes that the Commission will amend its Guide to accurately state the law, and ensure that state agencies clearly understand their duties and obligations under the Constitution.

 PLF files motion to dismiss CBD challenge Congress’ use of the Congressional Review Act

On Friday, PLF filed a renewed motion to dismiss in Center for Biological Diversity v. Zinke, on behalf of itself and several sportsman clients. The case challenges Congress’ use of the Congressional Review Act to overturn a Department of Interior regulation that severely restricted certain types of hunting in Alaska. PLF was the first to appear in the case to defend the use of the CRA, and the first to file a motion to dismiss the case. CBD since amended its complaint, and PLF has once again filed a motion to dismiss. CBD’s amended complaint argues that Congress’s use of the CRA violates the Constitution’s separation of powers and interferes with the President’s constitutional requirement that he “take care that the laws be faithfully executed.” As PLF’s motions demonstrate, CBD’s arguments are based on a severe misunderstanding of the constitutional structure of the federal government

Appeal in $30 million takings case

This week we filed appellate documents in Pacetta v. Town of Ponce Inlet. In this case, three Florida appellate judges took a $30 million dollar takings award away from the Johnson family when it decided that the Johnsons really didn’t have their property rights taken away from them by their small town government. That’s despite the jury awarding the  Johnsons’ $30 million for the denial of their rights. To add insult to injury, the appeals court decided our clients didn’t even necessarily have a right to present a case to a jury, instead holding that they’d have to go back before a trial court judge to show they had a right to present their takings case to a jury. Like the trial court judge and jury, we think the government in this case unconstitutionally took our clients’ property and for this reason we are seeking review of the case by the Florida Supreme Court. For more on the history of this case, read our blog posts here and here.

Federal court issues mixed decision on jaguar critical habitat challenge

On Wednesday, the U.S. District Court for the District of New Mexico issued its decision in New Mexico Farm & Livestock v. U.S. Department of Interior.  In this case, we are challenging the federal government’s 2014 designation of thousands of acres in New Mexico as “critical habitat” for the jaguar.  The designation is absurd, because jaguars prefer the wet, tropical climates of Central and South America forests, to the dry, arid wilderness of the Southwest United States.  Under the Endangered Species Act, the federal government should only designate land critical habitat if the species “occupied” the area when it was listed, or if the land is essential to the conservation of the species. Congress intended an “extremely narrow definition” of critical habitat, in order to limit the reach of the burdensome label.  In this lawsuit, we argued that the jaguar critical habitat designation fails to satisfy the requirements of the Endangered Species Act.  The district court agreed that the government was wrong to declare the area was occupied by jaguar when it was listed as endangered in 1972, because all evidence showed that jaguars were not present in the United States at that time. The government can’t use recent sightings to say that there were jaguar in the Southwest in 1972.  But the court ultimately deferred to the government’s determination that the area is “essential” to jaguar, even though the government also admitted that the area is of only “marginal” importance to the jaguar. We will appeal to the Tenth Circuit. Read more here.

Michigan Court of Appeals holds that government may confiscate $24,215 when you underpay taxes by $8.41

In January 2013, Uri Rafaeli’s business—Rafaeli, LLC—tried to pay the delinquent balance owed for a modest rental home in Southfield, Michigan.  Rafaeli miscalculated the interest due for the delinquent 2011 taxes and underpaid by $8.41.  A few months later, Oakland County foreclosed on the property and then sold it for $24,500.  Rather than collect what was due and retain a little extra for the cost of the sale, the County kept every penny. Rafaeli sued, arguing that the County violated the Fifth Amendment, the Michigan constitution’s analogue, and other constitutional protections.  PLF filed this amicus brief as friend of the court in support of Rafaeli, explaining why the Constitution forbids government from confiscating more than it is owed in property taxes, penalties, interest, and fees.  This week, the Michigan Court of Appeal dismissed Rafaeli’s claim in Rafaeli, LLC v Oakland County.  Read more in this blog post.

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