July 12, 2011

Santa Fe "affordable housing" case appealed to Supreme Court

By Santa Fe "affordable housing" case appealed to Supreme Court

Author: Paul J. Beard II

This week, the Supreme Court received our petition for writ of certiorari in Alto Eldorado Partnership LLC v. County of Santa Fe.  The petition asks the Court to consider whether federal civil rights claimants who allege an unlawful taking of private property by the government should—like all other federal civil rights plaintiffs—be able to have their claim heard in federal court.

Our clients are small property owners in Santa Fe County, New Mexico.  They have approvals to subdivide their parcels.  But a County ordinance requires them—as a condition of mere subdivision—to sign an agreement recorded against their properties that "affordable housing" units will be built and sold to County-approved buyers.  The property owners have challenged the ordinance in federal district court under the Civil Rights Act (42 U.S.C. section 1983), principally on the ground that the ordinance constitutes an unlawful taking of private property and is therefore facially unconstitutional. Because subdividing land does nothing to create or contribute to the alleged lack of affordable housing in the County, it is fundamentally unfair for the County to conscript a few property owners to build and sell homes on its behalf. Such a permitting exaction is, as the United States Supreme Court put it in Nollan v. California Coastal Commission, "an out-and-out plan of extortion."

Importantly, the property owners do not seek compensation.  They seek a declaration that the ordinance is unconstitutional, and an injunction preventing its enforcement.

Nevertheless, the federal district court threw out their case, based on a misreading of a United States Supreme Court precedent requiring federal taking claims for just compensation to be litigated first in state court before being litigated in federal court.  Because the property owners don't seek just compensation, the rule should not apply to them; but the district court, and the Tenth Circuit Court of Appeals, disagreed.  Combined with the well-settled rule that state court judgments have final, preclusive effect for purposes of federal court litigation, federal taking claimants, including the property owners in this case, are essentially barred from federal court! Once they litigate and lose in state court, the federal court will not hear their claims.

Is this what the Congress had in mind when it enacted Section 1983, whose very purpose was to provide a federal forum for all federal civil rights claimants?  Is there a reason that victims of property rights abuses should be treated differently than any other kind of civil rights plaintiff?  That's the main question posed in our petition to the Supreme Court. Stay tuned for updates.

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