June 10, 2016

A win for property rights in North Carolina

By Mark Miller Senior Attorney

The North Carolina Supreme Court handed down a victory for property rights this morning in a case Pacific Legal Foundation tracked closely for several years. The facts of the case are straightforward, as we explained in our amicus brief* supporting  the property owners:

The North Carolina Department of Transportation (DOT) created
“transportation corridors” on private land pursuant to the state’s Map Act. Within these corridors, “no building permits shall be issued for any building or structure or part thereof . . . nor shall approval of a subdivision . . . be granted.” N.C. Gen. Stat. §§ 136-44.50 to 136-44.54 (2013). There is no time limit on the resulting, de facto moratoria imposed in the designated transportation corridors and, as a result, the DOT has been able to freeze large tracts of land for years without condemning them or paying compensation to their owners.

All told, the government of North Carolina thought it could freeze about 4,500 different properties, with a value of around $600 million dollars, indefinitely, and then decide when to build its highway through those properties on the government’s own clock, any time in the next 60 years. Meanwhile, the state would buy the properties frozen by the Map Act, and the Act’s transportation corridors, at the government’s convenience and on its own time-table. On this egregious set of facts, the landowners had no choice but to ask the courts to intervene. PLF argued in its amicus brief that the impact on the use and value of the owners’ property amounts to an unconstitutional taking of that property, and North Carolina’s High Court agreed.

On its way to the holding of the case, the Court emphasized the importance of property rights since the inception of our country:

From the very beginnings of our republic we have jealously guarded against the governmental taking of property. See John Locke, Two Treatises of Government 295 (London, Whitmore & Fenn et al. 1821) (1689) (“The great and chief end, therefore, of men’s uniting into commonwealths, and putting themselves under government, is the preservation of their property.”); James Madison, Property (1792), reprinted in 6 The Writings of James Madison 101, 102 (Gaillard Hunt ed., 1906) (“Government is instituted to protect property of every sort; as well as that which lies in the various rights of individuals, as that which the term particularly expresses.”).

If you read a line like that early in an opinion, then you know that the Court likely reached the right result. The Court’s conclusion is worth quoting in full:

By recording the corridor maps at issue here, which restricted plaintiffs’ rights to improve, develop, and subdivide their property for an indefinite period of time, NCDOT effectuated a taking of fundamental property rights. On remand, the trier of fact must determine the value of the loss of these fundamental rights by calculating the value of the land before the corridor map was recorded and the value of the land afterward, taking into account all pertinent factors, including the restriction on each plaintiff’s fundamental rights, as well as any effect of the reduced ad valorem taxes. See, e.g., Nantahala Power & Light Co. v. Moss, 220 N.C. 200, 205-06, 17 S.E.2d 10, 13-14 (1941) (discussing principles involved in fair market valuation); see also Beroth II, 367 N.C. at 343-44, 757 S.E.2d at 474-75. Accordingly, the trial court improperly dismissed plaintiffs’ inverse condemnation claim. Therefore, we affirm the decision of the Court of Appeals, which reversed the trial court’s ruling to the contrary and remanded this case for further proceedings as described above.

Three cheers for the North Carolina Supreme Court. And congratulations to Matthew Bryant, the excellent attorney who represented the property owners in the case— known as Kirby v. North Carolina Department of Transportation—from its infancy in trial court through today’s ruling.

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*PLF thanks Elliot Engstrom, formerly of the Civitas Institute for Law and Freedom in North Carolina, for his contributions to the brief and for serving as local counsel in North Carolina.

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