July 8, 2017

Weekly litigation report — July 8, 2017

By James S. Burling Vice President for Litigation
  • California Supreme Court tells landowners to watch homes fall into the sea
  • Land use in Florida: If you can’t dazzle them with brilliance ….
  • PLF, other organizations, ask Arizona Supreme Court to properly define “tax”
  • Can government condemn a business operation and hand it over to a competitor?
  • Washington court limits reach of public trust doctrine
  • Property rights are a grave matter in the 3rd Circuit

California Supreme Court tells landowners to watch home fall into the sea

The California Supreme Court ruled against landowners in Lynch v. California Coastal Commission. The court held that two homeowners, Thomas Frick and Barbara Lynch, could not sue over the Coastal Commission’s onerous restrictions on a new seawall to protect their property, because they had gone ahead and built the seawall to replace the earlier one that was destroyed by a devastating 2010 storm. Of course, they were anxious to rebuild the seawall because the next big storm could totally destroy their homes. The commission proposed to issue only a 20-year permit, which the homeowners argued violated its statutory duty to allow property owners to protect their property.

The court said that perhaps the homeowners should have applied for an emergency permit, and then a regular permit. Only then could they sue over any unlawful conditions. Ironically, the Commission had already told the homeowners not to get an emergency permit because a regular permit would be forthcoming.

As our blog post notes, this decision makes it harder for property owners to fight when the Coastal Commission imposes unlawful conditions on permits. It is particularly bad for small property owners. The Court has shrunk their right to move forward with projects under protest while litigation proceeds. Instead, they will be forced to put their lives and projects on hold for years while a court battle over an unlawful condition proceeds. The result is predictable: many property owners will be forced to accept unlawful, even unconstitutional restrictions on their property simply because they can’t afford to fight.

Land use in Florida: If you can’t dazzle them with brilliance ….

Florida’s Second District Court of Appeal issued a bad decision on Friday in GolfRock, LLC v. Lee County. In 2005, GolfRock sought a permit to mine its land in Lee County. Several years and five application supplements later, the County amended local comprehensive plan to preclude mining on GolfRock’s land. But the County still refused to reach a final decision on GolfRock’s application, so in 2013, GolfRock filed an action for declaratory relief asking a court to declare their whether a takings claim was ripe. The trial court held that the takings claim was not ripe, because the County never reached a final decision on the permit application. Thus GolfRock would have to apply again. We supported GolfRock on appeal with an amicus brief, explaining why the court should find the claim ripe. Two years later, the court of appeal issued a baffling decision saying that it would not decide whether the claim was ripe, because the plaintiffs’ complaint failed to sufficiently allege that GolfRock was in doubt about whether their claim was ripe. We hope this decision is corrected, clarified, or overturned soon, because it is as baffling as it is bad for property owners. Read more about this decision on our blog.

PLF, other organizations, ask Arizona Supreme Court to properly define “tax”

 Pacific Legal Foundation, along with the Howard Jarvis Taxpayers Association and the Green Valley Hospital, filed an amicus brief in Biggs v. Betlach in support of a group of Arizona legislators that are challenging the imposition of a hospital tax to pay for state Medicaid expansion. The charge at issue, which was passed by a simple majority of the Arizona legislature, requires hospitals like Green Valley to pay an “assessment” on hospital revenues, discharges, and bed days. Yet, Article IX Section 22 of the Arizona Constitution, which was added by voter initiative, requires a 2/3 vote before the state legislature can impose any new taxes. In the brief, the organizations urge the court to review the case, and point to California’s repeated “tax-revolts” as an example of what happens when government officials and courts ignore the will of the voters.

Can government condemn a business operation and hand it over to a competitor?

PLF filed an amicus brief with the Louisiana Supreme Court in the eminent domain case, St. Bernard Port, Harbor & Terminal District v. Violet Dock Port, Inc., LLC. The brief argues that the Fifth Amendment’s public use clause does not allow government agencies to use eminent domain for purely economic development reasons.  At issue is the port district’s decision to condemn Violet Dock Port’s property and on-going business in order to hand it over to a competitor’s business—merely because the district believed that the competitor could operate the dock better and charge more favorable rates. PLF’s brief argues that the economic development rationale is frequently used to circumvent the constitutional prohibition against private takings. For more, see our blog post here.

Washington court limits reach of public trust doctrine

This week, we received the Washington Supreme Court’s decision in the public trust case, Chelan Basin Conservancy v. GBI Holding Co.  Broadly stated, the public trust doctrine means that lands under navigable waters are open to the public for commerce, navigation, fishing, and recreation, regardless of who owns the submerged lands. Over the years, however, environmentalists have tried to convince courts to expand the “public trust doctrine” in order to give the public (i.e., activist groups) a right to veto any private activity that could potentially impact water. PLF had filed an amicus brief arguing that the public trust doctrine cannot be expanded without violating the Takings Clauses of the State and U.S. Constitutions. The doctrine prohibits only those uses that will substantially impair the public’s use of water. Without such a showing, the environmentalists’ claim must fail. Although the Washington court remanded the public trust question for a trial, the court adopted much of PLF’s argument limiting the reach of the doctrine. For more, see our blog post here.

Property rights are a grave matter in the 3rd Circuit

Knick v. Scott Township is our challenge to a local ordinance that forces landowners to allow unrestricted public access across private property to private graveyards, like family plots, or even to a group of stones that might be an old graveyard. In other words, if members of the public think there might be an old grave on a person’s property, the ordinance says the public can traipse across a private yard to visit the possible grave. Ms. Knick challenged this uncompensated public access requirement as a taking of her private property rights.  While recognizing that the “Township’s ordinance is extraordinary and constitutionally suspect,” and that “It is difficult to imagine a broader authorization to conduct searches of privately owned property,” the Third Circuit has now ruled against Mrs. Knick.

In this decision, the court held that Ms. Knick could not assert a takings claim against the public access mandate until she first sued in state court in compliance with the ripeness doctrine of Williamson County. However, that doctrine isn’t mandatory and it shouldn’t have been applied in this case. The next stop will likely be the Supreme Court.

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Chelan Basin Conservancy v. GBI Holding Company

Along the shore of Washington’s Lake Chelan, a large fill known as “Three Fingers” has been in place since 1961. The placement of this fill was retroactively authorized by the state’s Shoreline Management Act, which grants consent and authorizes impairment of public rights of navigation, fishing, and recreation caused by fill placed in navigable waters prior to December 4, 1969. An environmental group, Chelan Bay Conservancy, sued the owner of Three Fingers to remove the fill on the basis that it allegedly violates the public trust doctrine. The Washington Supreme Court issued a decision largely adopting the legal principles espoused in PLF’s amicus brief in favor of the property owner and remanded the public trust question for trial.

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