In September, I wrote about a Massachusetts takings case pending petition for review to the U.S. Supreme Court. The Court denied review, so the Massachusetts Appeals Court decision that vacated a jury award to the takings claimant stands. My colleagues Professors Chad McGuire and Michael Goodmanhave written for CommonWealth Magazine about the case's potential implications for climate change in combating sea-level rise.
McGuire and Goodman described the case:
In December the U.S. Supreme Court denied a petition for review by Janice
Smyth of Falmouth on the question of whether the Falmouth Conservation
Commission, when denying a permit to develop her coastal property in
Falmouth, exacted a de facto “taking” (often referred to as a regulatory
taking, or inverse condemnation). Smyth inherited the coastal property
from her parents but, by the time she took action to exercise her right
to develop that land in 2012, she ran afoul of the no-development zone
enacted locally to mitigate erosion and coastal land loss experienced
over recent decades.
They conclude that government leaders should use the latitude afforded them by this precedent to plan for the coastline impact of climate change while "manag[ing] the consequences for coastal land values, local real estate markets, and the tax base of our coastal municipalities." Read more.
My colleague Prof. Ralph Clifford is cited and quoted in this item from the Pacific Legal Foundation. The PLF opined with disapproval upon takings problems in which the government essentially exploits the takings power after discounting property value by tax liability, a one-two punch, kicking the owner to the street.
The abuse is compounded by the continuing latitude of governments to line the pockets of private investment with the proceeds of takings, upheld in Kelo v. New London(2005). See also the award-winning documentary Little Pink House (2017), and a mouth-watering Kelo epilog.
This on the heels of discussion at UMass Law last week of a U.S. Supreme Court cert. petition filed in Smyth v. Conservation Commission of Falmouth(Mass. App. Ct. Feb. 19, 2019), now No. 19-223 (pet. filed U.S. Sept. 19, 2019), in which the Massachusetts Court of Appeals rejected a takings claim upon denial of a building permit. (HT@ Dean Eric Mitnick. The court heard arguments in the case at UMass Law last year.)
One doesn't have to look far nowadays for abuses of governmental power that are bipartisanly objectionable yet persist to the shameless aim of making the rich richer. I'm presently reading Amor Towles's A Gentleman in Moscow, a fiction about the aftermath of the Russian revolution; when you're a libertarian and you start thinking "those Bolsheviks weren't all bad," something has gone awfully wrong in America.
Uri is a retired 83-year-old Michigan engineer, and in 2014 he
accidentally underpaid, by $8.41, the property taxes on a home he rented
out. But instead of notifying him of the issue and helping him, his
county government seized the home and sold it at auction for $24,500.
The county then kept all the proceeds—leaving Rafaeli with nothing.
All for an 8 buck mistake.
That
may sound like an extreme and unusual case. But in fact, this type of
tax forfeiture abuse, called home equity theft, is completely legal in
13 states.
In Alabama, Colorado, Maine, Massachusetts, Michigan,
Minnesota, New York, North Dakota, Oregon, and Wisconsin, governments
not only keep the value of unpaid property taxes and interest from the
sale of a seized home—they also keep the surplus value rather than
returning it to the property owner. In Arizona, Colorado, Illinois,
Massachusetts, and Nebraska, private investors often reap the gains of
home equity theft.
The predominant method for collecting delinquent real estate taxes in
Massachusetts is the use of the “tax deed” as authorized by Chapter 60,
Sections 53-54. Under the authorized procedures, each municipality’s
tax collector can execute and record a deed that transfers fee simple
title to the real estate to the municipality subject to the taxpayer’s
statutorily created redemption right. If the redemption right is or
cannot be exercised, all of the taxpayer’s rights in the property, as
well as other’s rights created by encumbrances such as mortgages, are
terminated by the foreclosure process provided for in the statute.
Importantly, the municipality does not obtain title to the taxpayer’s
land by foreclosure; instead, it merely frees itself of any remaining
claim by the taxpayer.
The problem with the tax deed procedure is that it fails to provide both
procedural and substantive due process to the taxpayer. Procedurally,
although adequate notice is given, title to the taxpayer’s real estate
is taken by the government without a hearing. Based on an unreviewed
decision by a municipal tax collector, the taxpayer immediately loses
title to the land. Substantively, by using a tax deed, the municipality
engages in the taking of property without providing reasonable
compensation. The value of the land taken for payment of the tax debt is
not evaluated in the context of the debt owed. Empirical evidence shows
that the property’s value significantly exceeds the debt owed, giving
the municipality the ability to collect almost fifty dollars for every
dollar of delinquent real estate tax owed, on average. Each year,
approximately $56,000,000 is unconstitutionally appropriated from
taxpayers. This article explores these problems.
In Penn Central Transp. Co. v. N.Y., 438 U.S. 104 (1978), this Court held that Fifth Amendment “regulatory takings” claims are governed by three factors: the “economic impact” of the challenged regulatory action, the extent of interference with a property owner’s “distinct investment-backed expectations” and the “character of the governmental action.” Id.
The Massachusetts Appeals Court applied the Penn Central factors to hold that Respondent Town of Falmouth (Town) did not unconstitutionally take Petitioner Janice Smyth’s (Mrs. Smyth) property by denying a permit to build a home. Mrs. Smyth’s parents purchased the lot in 1975 for $49,000 ($216,000 in today’s dollars), but did not develop it. In the meantime, the entire subdivision was developed. When Mrs. Smyth inherited the lot and sought to build, the Town refused to grant a permit based on regulation post-dating her interest. The denial left Mrs. Smyth’s lot without any possible use except as a “playground” or “park,” and stripped it of 91.5% of its value. Yet, the court below held that none of the Penn Central factors weighed in favor of a taking under these circumstances.
The questions presented are:
1. Whether the loss of all developmental use of property and a 91.5% decline in its value is a sufficient “economic impact” to support a regulatory takings claim under Penn Central.
2. Whether a person who acquires land in a developed area, prior to regulation, has a legitimate “expectation” of building and, if so, whether that interest can be defeated by a lack of investment in construction?
3. Whether the Court should excise the “character” factor from Penn Central regulatory taking analysis.
My Comparative Law class is reading about democratic deficit in Europe. It's a good time to remember that the study of comparative law can be as much about similarities as differences.
On Tuesday, an intermediate appellate court in the Netherlands upheld a verdict against the government demanding more state action to curb carbon emissions and combat climate change. The court's decision (unofficial English translation) in favor of energy NGO Urgenda came just one day after the dire 12-year warning of the special report of the U.N. Intergovernmental Panel on Climate Change. Meanwhile the Trump Administration filed an emergency motion in federal court in Oregon today in its latest bid to stop climate-change litigation in the United States.
The Netherlands is working mightily already to reduce carbon emissions. The state projects a reduction in the neighborhood of 20% by 2020 over 1990 levels. But that number still falls short of 25%, which the court calculated as the nation's minimum treaty commitment. That difference, The Guardian reported, could be enough to force the shutdown of a recently opened coal-fired power plant. The court's decision chiefly references the 1992 U.N. Framework Convention on Climate Change and traces the development of states' legal obligations through the history of climate conferences from Kyoto in 1997 to Bonn in 2017.
As the state observed in the case, "Dutch emissions are minor in absolute terms and ... the Netherlands cannot solve the global problem of climate change on its own" (¶ 30). So the global significance of the decision is mostly symbolic, and, activists hope, an example for climate-change activism in the courts around the world.
American iterations of climate-change litigation are many, but the one case that has captured the public imagination more than any other is Juliana v. United States in the District of Oregon. The case has played well in media because the plaintiff effort is spearheaded by a not-so-camera-shy youth group, the Earth Guardians, led by indigenous activist, hip-hop artist, and let's be honest, teen heartthrob Xiuhtezcatl Martinez. (Below: new promo video for Martinez's debut album, Break Free.)
Juliana might yet be described best as "ill fated." Unlike myriad climate-change-aiming lawsuits in areas such as environmental and business regulation, or upon collateral constitutional theories, such as the Commerce Clause or First Amendment, Juliana is a direct assault on the federal government under constitutional due process—literally, the right to life.
At first blush, this approach seems to face insurmountable hurdles before the merits could ever be reached: namely, standing, justiciability, official immunity, not to mention the hundred other reasons civil rights lawsuits are awfully hard to win. Then at the threshold of the merits lie the conventional tort problems of affirmative duty, causation, and injury. In the "constitutional tort" vein, the plaintiffs seek to breathe new breadth into the "public trust doctrine," which posits that government holds natural resources in trust for the public good. The doctrine has seen modest success in, for example, beach access cases, but jurisprudential conservatives do not enthusiastically embrace the raw, public-policy-driven invitation to judicial intervention.
Despite conventional wisdom, the Juliana suit survived both a motion to dismiss in the trial court and an aggressive effort by the Trump Administration to shut the action down in the Court of Appeals. (To be fair, the Obama Administration also was not ra-ra plaintiffs on this one.) In November 2016, District Judge Ann Aiken recognized, "This is no ordinary lawsuit." Upon detailed analysis, she rejected the government's arguments on both standing and justiciability, finding the question presented "squarely within the purview of the judiciary."
Then, analogizing to the Supreme Court's reasoning on due process in the 2015 gay marriage case, Obergefell v. Hodges, Judge Aiken "ha[d] no doubt that the right to a climate system capable of sustaining human life is fundamental to a free and ordered society." The Ninth Circuit in March rejected the government's bold demand that the case be dismissed to protect the separation of powers, finding the government's claim premature and well shy of the high bar for writ of mandamus. In July, the U.S. Supreme Court denied the government's appeal for a stay.
Thus back on the District of Oregon docket, Juliana was scheduled to open at trial on October 29. A headline in The Japan Times, over a pro-plaintiff commentary by Princeton bioethics professor Peter Singer, titled Juliana "the trial of the century." One week ago, on October 5, the Administration filed another motion for stay in the trial court. Undoubtedly buoyed by the appointment of Justice Brett Kavanaugh, the Government today renewed its motion to stay and asserted its intention to petition the U.S. Supreme Court for mandamus relief.
In the Dutch case, the government tried to fend off the lawsuit on grounds equivalent to standing and justiciability, but to no avail. The Dutch Civil Code authorizes class actions (a rarity in Europe) specifically by interest groups on behalf of citizens. Moreover, the court reasoned that individual human rights claims must be justiciable in Dutch courts if individuals could bring the same claims in the European Court of Human Rights. The government argued "trias politica," that is, separation of powers, to which the court responded (cheekily?): "This defence does not hold water. The Court is obliged to apply provisions with direct effect of treaties to which the Netherlands is party, including [the European human rights convention]. After all, such provisions form part of the Dutch jurisdiction and even take precedence over Dutch laws that deviate from them" (¶ 69).
Under the European human rights convention, Urgenda relied on articles 2 and 8, respectively the rights to life and privacy, the latter including the inviolability of family life—the same two notions cited by Judge Aiken in her Obergefell-inspired due process analysis under the Fifth and Fourteenth Amendments.
You can await the next development in Juliana via PACER under case no. 6:15-cv-01517. [UPDATE: U.S. Supreme Court issued an extraordinary stay on Oct. 19. See, e.g., Richard Franks @ Legal Planet. HT @ Flannery Rogers.]
[UPDATE: Joel Stronberg at Resilience reported that despite the earlier Roberts stay, SCOTUS issued an order on November 2 clearing the way for Juliana to go to trial.]
[UPDATE: Juliana returns to oral argument in the Ninth Circuit in Portland, Oregon, on June 4, 2019. Track the case at Climate Case Chart, which explains: "The government [appellant argues] that the plaintiffs lacked
standing and that their lawsuit was not a cognizable case or controversy
under Article III of the Constitution. The government contended that a 'quick look at the climate change issues and actions pending before
Congress and the Executive Branch'—including the Green New Deal, carbon
tax legislation, and the replacement for the Clean Power Plan—'confirms
that Plaintiffs have petitioned the wrong branch.' The government also
argued that the plaintiffs were required to proceed under the
Administrative Procedure Act and that their constitutional claims failed
on the merits."]
[UPDATE: The Dutch Supreme Court upheld the outcome in Urgenda on Dec. 20, 2019.]
[UPDATE: On January 17, 2020, the Ninth Circuit dismissed Juliana for failure of standing. An appeal to the U.S. Supreme Court is inevitable, but extremely unlikely to succeed. The case is Juliana v. United States, No. 18-36082.]
