Friday, March 20, 2015

Amici Brief Supporting California Property Owners in Eminent Domain Case Argues the Sky Will Not Fall if the State Follows Procedures



The Owners’ Counsel of America (OCA) and the National Federation of IndependentBusiness (NFIB) Small Business Legal Center have filed an amici curiae brief in support of Sacramento-San Joaquin Delta property and business owners in Property Reserve, Inc. v. Superior Court, case number S217738. The brief calls upon the California Supreme Court to uphold a Third District Court of Appeal decision which held that the California Department of Water Resources’ (DWR) request to enter private property to undertake geological and environmental activities such as boring holes and installing permanent structures were not the “innocuous” or “superficial” activities permitted under California law. The Court of Appeal concluded that the level of intrusion on private property requested by DWR would be a taking, and that in order to undertake those activities, the DWR must follow eminent domain procedures.   

“The Third District Court of Appeal concluded, and we agree, that the government’s eminent domain power must be used ‘in strict conformity to the constitutional protections and procedures that limit its operation’,” explained Robert H. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu and the Hawaii member of OCA, one of the authors of the OCA-NFIB brief.  “In a similar case in 1923, the California Supreme Court held that loyalty to constitutional protections is more important than the government’s ability to operate free of constitutional restraints, and all we’re asking the Court to do in this case is reaffirm that long-standing principle.”  

The DWR has proposed a conservation and resource management plan called the Bay Delta Conservation Plan (BDCP).  According to its website (http://baydeltaconservationplan.com/), the BDCP includes a multi-million dollar water delivery project planned to divert water from the Sacramento-San Joaquin Delta to the southern regions of the state.

As part of its planning, the DWR requested permission to enter private property under California’s entry statutes (Cal. Civ. Pro. Code § 1245.010 et seq.) before filing suit to take the property by eminent domain.  DWR requested permission to perform geological and environmental studies on approximately 240 parcels owned by more than 150 owners.  The trial court granted DWR’s request to complete the environmental activities providing DWR deposit with the court an amount of money to compensate for any damages to or interference with the use of the properties.  

The court, however, denied DWR’s request to conduct geological testing prior to acquiring the properties through California’s eminent domain procedures. The trial court concluded that the geological activities amounted to a taking or damaging of property and ruled that the entry statutes are unconstitutional if used to authorize DWR’s taking or damaging of private property.  It further found that the entry statutes did not comply with article I, section 19, subdivision (a) of the California Constitution (Section 19(a)) - the constitutional provision limiting the use of eminent domain.  

Both parties appealed the trial court’s order.  In Property Reserve, Inc. v. Superior Court, No. C067758 (Mar. 13, 2014), the Court of Appeal ruled in favor of the property owners finding that the geological activities, which included entering the land, boring holes and installing permanent structures is a taking or damaging of property which requires the State to follow statutory eminent domain procedures.  The appellate court also found that DWR’s proposed environmental activities would constitute a temporary taking and cannot be authorized by the entry statutes.  DWR sought review by the California Supreme Court.

“Essentially, the appellate court ruled that there is no substitute for eminent domain when there’s been a taking,” said Edward G. Burg, a partner with Manatt, Phelps & Phillips, LLP in Los Angeles and the California member of OCA, who joined Mr. Thomas on the brief.  “No matter how small the interest, if the government takes property, it must condemn and pay for it first, and provide all of the protections the eminent domain process has.”  

The amici brief filed by the NFIB Small Business Legal Center and OCA argues two points.  Amici contend that any significant physical invasion of private property is a taking requiring the payment of just compensation and compliance with eminent domain procedures.  The brief disputes the State’s assertions that its adherence to established eminent domain procedures would interfere with its ability to function or to complete this and other projects.  Rather, amici argue, at worst complying with eminent domain procedures might be inconvenient for the government, but will not make the project impossible.

“There is no reason to think that this project will grind to a halt should the Court reaffirm the bedrock constitutional principle that the government must condemn and pay just compensation when its invasive activities are of such magnitude that they interfere with an owner’s property rights,” stated Thomas.  “The sky will not fall if the California Supreme Court continues to require what the Constitution has always demanded.”

Tuesday, February 17, 2015

Owners' Counsel of America Recognizes UH Law Professor David Callies with the 2015 Crystal Eagle Award for His Scholarship on Takings Law and Private Property Rights

Prof. Callies addresses OCA Members.
In a ceremony February 7, 2015 at the Nikko Hotel in San Francisco, OCA recognized Professor David L. Callies, the Benjamin A. Kudo Professor of Law at the University of Hawai‘i William S. Richardson School of Law, for his lifetime of scholarship addressing land use, eminent domain, takings law and private property rights.

Annually, OCA identifies an individual who has made a substantial contribution toward protecting the civil right of private property ownership and presents that individual with the Crystal Eagle Award.  We are honored to recognize David Callies with the 2015 Crystal Eagle Award for his work concerning property rights, land use regulation and takings law.

Richardson Law School Dean Avi Soifer said, “It is wonderfully fitting that David Callies has been honored in this way. He has been a standout teacher and scholar at our Law School for decades during which he has informed, challenged, and creatively provoked a generation of our students.” Soifer added, “David continues to do that and much more for the Law School as well as for many members of the larger community.”  

At the Law School, Callies teaches property, land use, and state and local government law. He is a member of the American Law Institute, the American College of Real Estate Lawyers, the Council of the International Bar Association’s Asia Pacific Forum, the College of Fellows of the American Institute of Certified Planners and a Life Fellow with the American Bar Foundation. He is also the past Chair of the American Bar Association’s Section of State and Local Government Law, and he received the Section’s 2006 Lifetime Achievement Award. 
  
A prolific writer, Callies has authored or co-authored 20 books and over eighty articles on topics relating to real property law, takings law, and land use and development in both the United States and Asia. In 2007, his book Taking Land: Compulsory Purchase and Land Use Regulation in the Asia-Pacific (with Kotaka) (U.H. Press, 2002) was republished in Japanese.  Additionally, his book, Land Use Controls in the United States is published in both Japanese and Chinese.   He authored the article "Takings, Physical and Regulatory," addressing the use of U.S. property law precedents by Hong Kong’s highest court that was published in a special 2007 edition of the Asia Pacific Law Journal to commemorate the 10th anniversary of Hong Kong’s establishment as a special administrative region of China. 

Gideon Kanner introduces Prof. Callies.
Beyond his written scholarship, Callies has delivered endowed lectures at Albany Law School and John Marshall Law School, presented at the Brigham-Kanner Property Rights Conference at William & Mary Law School, and lectured on land use issues in Japan, China, and Korea.  He recently served as co-chair and lecturer at Touro Law School’s symposium commemorating the 40th anniversary of The Takings Issue, a book Callies coauthored with Fred Bosselman and John Banta in 1973. He is a regular speaker at annual conferences presented by the American Law Institute, and the American Planning Association.  
 
Gideon Kanner, Professor Emeritus, Loyola Law School, and Robert H. Thomas, a director with Damon Key Leong Kupchak Hastert in Honolulu, introduced Professor Callies and presented the award. Thomas is the Hawai’i representative of OCA and a 1987 graduate of the William S. Richardson School of Law.



Mark Murakami '99, Prof. Callies, and Robert Thomas '87.

“The Owners’ Counsel of America sought to honor David Callies for his scholarship, which has evolved over the last 40 years to highlight the importance of private property rights in takings law,” said Thomas. “David has become an abiding voice in support of the constitutional right of property, and a fearless and outspoken critic when property rights are not given appropriate recognition.  For example, in a recent article, he noted that the Hawai‘i Supreme Court’s 1993-2010 track record on private property rights was ‘appalling,’ and hoped the current court would reverse that trend.”

“In addition to his work researching, thinking and writing about property and takings law, we are grateful to Professor Callies for educating and mentoring new generations of lawyers, and for showcasing the relationship between property rights and individual liberties,” Thomas added. 

Prof. Callies with the 2015 Crystal Eagle Award.


Friday, February 13, 2015

Injunction Issued to Prevent Condemnation of Property for XL Pipeline in Nebraska

This guest post has been authored by OCA Nebraska Member Bill Blake and follows his previous guest posts here and here.  As events continue to unfold relating to the Keystone XL pipeline, we hope to feature more of Bill's insights.
*****

The Judge of the District Court of Holt County, Nebraska issued a temporary injunction on February 12, 2015, halting Transcanada’s efforts in Nebraska to acquire easement rights for the XL pipeline through eminent domain proceedings.  Transcanada had filed over one hundred proceedings in county courts along the proposed route in January, to obtain the permanent and temporary easements needed to complete the pipeline corridor.  Over 80% of the easement rights were already been obtained through negotiations with landowners.  The condemnation proceedings were filed on the on the eve of expiration of a permit issued by the Governor to use the selected route through Nebraska.  The condemnees in Holt county joined together to file the action to enjoin the condemnations. 
  
The Nebraska Supreme Court temporarily opened the way for condemnation in an opinion that failed to hold the routing procedure unconstitutional, but may have also failed to hold it to be constitutional.  Only four judges of the Court’s seven judges voiced an opinion on the issue.   It takes five judges to declare a statute unconstitutional.  The remaining three judges opined that the plaintiffs did not have standing and refused to give an opinion on the constitutional issue.  See Thompson v. Heineman, 289Neb. 798 (2015) (or Bill's previous guest posts here and here).
  
Included in the list of bizarre twists and turns in the XL saga is the fact that Transcanada agreed to issuance of the injunction.  This leaves the condemnation proceedings in limbo until the Nebraska Supreme Court has been given a chance to revisit the constitutionality issue in a case where the plaintiffs meet the  standing test of the remaining three judges.  Interestingly, the Court could also add even one more twist by determining that the Court had accepted jurisdiction in the prior case by a vote of four to three  and that the matter has  already been decided, even though no judge to date has given an opinion that the routing statute is constitutional.  The Court could also avoid the issue altogether by focusing on any one of several other challenges to the route approval process.   

William G. Blake
Baylor Evnen Law Firm                                                                                                                Lincoln, Nebraska

Wednesday, January 14, 2015

It Ain't Over 'Til It's Over: Nebraska Supreme Court Rules (or Maybe Not) on the Validity of the TransCanada XL Pipeline Route Approval Through Nebraska

The following guest post has been authored by OCA Nebraska Member Bill Blake as a follow up to his earlier post here concerning the recent Nebraska Supreme Court opinion regarding the constitutionality of the process for routing of the TransCanada pipeline through Nebraska.
*****
Probably no appeal to the Nebraska Supreme Court has been watched more closely by more people than the challenge to the statutory routing process for the proposed TransCanada XL Pipeline.

On January 9, 2015, the Nebraska Supreme Court issued its decision, or lack thereof, in a sixty-four page opinion.[1]  By state constitution, the Nebraska Public Service Commission has plenary power over all common carriers.[2]  However, the Legislature adopted a process in 2012 to specifically address the route of the proposed XL Pipeline through Nebraska.  The Legislature allowed the Governor, after input from the Nebraska Department of Environmental Quality, to approve the route.[3]  The proposed route was studied and the Governor issued approval.  A group of citizens then challenged the process, claiming that approval was unconstitutionally taken away from the Public Service Commission and delegated to the Governor.  They made their challenge on the basis of their standing as taxpayer citizens, claiming the approval process was an unlawful expenditure of public funds.  Their standing was challenged, but the trial court found they had standing as taxpayers, that the XL Pipeline would be a common carrier, and that the statutory approval process was unconstitutional.  The decision was immediately appealed to the Nebraska Supreme Court.  The Court’s hearing process was expedited, but many weeks went by without a decision being issued.  We now know the reason for the delay.  Unfortunately, we learn little else from the decision.  It raises more substantive and procedural questions than it answers, exhibiting an unprecedented amount of acrimony among our Nebraska Supreme Court Judges.

Pursuant to the Nebraska Constitution, a statutory enactment cannot be declared unconstitutional without five of our seven judges so ruling.  However, in the challenge to the XL routing process, four of the judges agreed that the plaintiffs had standing and that the courts therefore had jurisdiction to hear the case.  The four also agreed that the statutory approval process was unconstitutional.  However, the other three judges dissented on the question of standing and refused to address the merits of the case.  While no judge stated a vote in favor of the constitutionality of the process, the four member majority was not enough to declare the process unconstitutional.  Therefore, the legislation and the proposed route of the pipeline through Nebraska would appear to be approved by default.  The three member dissent accused the other four members of reaching an absurd result, but the four members were quite clear that they thought the dissenting members had shirked their judicial duty and forced an absurd result.  The two camps could not even agree on whether to refer to the four members as a majority or a plurality.

For condemnation lawyers, the most important part of the opinion is that the four members fairly clearly ruled that eminent domain cannot be exercised by just any company that owns a pipeline.  Prior case law in Nebraska, as well as our statute authorizing eminent domain for pipelines, had made it appear that privately owned pipeline companies could exercise eminent domain for private use pipelines, and in fact case law had approved condemnation proceedings for such pipelines.  However, the court carefully considered the history of pipeline regulation in the state and recognized that the prior decisions allowing private pipeline companies to exercise the power had been issued at a time when it was thought that the federal government had preempted state regulation of interstate pipelines.  The court, referring to a prior opinion[4], stated that:

“[the] argument that a private carrier could exercise the right of eminent domain in this state for a non-public purpose….is simply wrong….[T]he reason common carriers can exercise the right of eminent domain lies in their quasi-public vocation of transporting passengers or commodities for others.  A citizen’s property may not be taken against his or her will, except through the sovereign powers of taxation and eminent domain, both of which must be for a public purpose.  Eminent domain is the State’s inherent power to take property for a public use.”  (Court’s italics).[5]

The court then clarified what is meant by the term “common carrier”, finding assistance from Texas case law and stating that statutes authorizing use of eminent domain power by common carriers do not include the owner of a pipeline built for that owner’s exclusive use.  “Under the Nebraska Constitution’s limitation on the power of eminent domain, pipeline carriers can take private property only for a public use.  That minimally means that a pipeline carrier must be providing a public service by offering to transport the commodities of others, who could use its service, even if they are limited in number.”[6]

The Court did not appear to be comfortable with the conclusion that the XL Pipeline would be a common carrier, but the district court had so concluded, and the parties did not contest the issue.

Given the rather perplexing result and the nature of the matter, this will likely not be the end of the litigation.   News services were quick to declare Nebraska’s approval of the XL, and proponents urged Congress and/or the President to do the same.  However, opponents were just as fast in arguing that they are not ready to give up.  TransCanada still needs easements through more than 100 properties in Nebraska, and must file condemnation before its routing permit expires.  The permit will expire on January 22, 2015.  Any effort to condemn can be expected to be challenged by somebody who has standing as a property owner in the path of the proposed route.  Would such challenge gain the fifth court vote to declare the siting unconstitutional?    Can the Governor extend the siting permit to avoid the two-year window of opportunity?   How will this affect the political battle in Washington, D.C. over Federal approval of the pipeline?

As Yogi said:  “It ain’t over ‘til it’s over.”

William G. Blake
Baylor, Evnen Law Firm
1248 O Street, Suite 600
Lincoln, Nebraska  68408



Endnotes

[1] Thompson v Heineman, 289 Neb. 798 (2015) https://supremecourt.nebraska.gov
[2] Nebraska Constitution, Article IV, Section 20.
[3] Nebraska Unicameral, L.B. 1161 (2012).
[4] City of Bayard v North Central Gas Co., 164 Neb. 819, 83 N.W.2d 861 (1957).
[5] Thompson v Heineman, at 843.
[6] Id. at 845.

Monday, January 12, 2015

Nebraska Supreme Court rules (or maybe not) on the validity of the approval of TransCanada XL pipeline route through Nebraska


The following guest post has been authored by OCA Nebraska member-attorney, William Blake, a partner in the Lincoln office of Nebraska law firm Baylor Evnen.  

*****
In a lengthy and acrimonious opinion issued January 9, 2015, the Nebraska Supreme Court issued a non-decision on the constitutionality of the process for routing of the TransCanada pipeline through Nebraska.  It may prove to approve the route by default.  The Court’s opinion answers very little, and raises far more questions than it answers.  The only thing that is clear is that not every pipeline can be granted the power of eminent domain.  To have that power, the owner must be a common carrier, which means the pipeline cannot exclusively carry the owner’s product.  “[T]he reason common carriers can exercise the right of eminent domain lies in their quasi-public vocation of transporting passengers or commodities for others.  A citizen’s property may not be taken against his or her will, except through the sovereign powers of taxation and eminent domain, both of which must be for a public purpose.” 

It takes five of the Court’s seven judges to declare a statute unconstitutional, and only four judges so opined in this case.  However, the other three declined to offer any opinion other than that they had no jurisdiction to do so.  Therefore, at least for now, the route seems to be approved, and the pipeline will be a common carrier for which the power of eminent domain can be used.

See Bill's previous post here in which he discusses the subject of this Nebraska Supreme Court opinion - the District Court ruling which struck down the state law as unconstitutional that allowed the Governor to approve a route for the TransCanada Keystone XL pipeline to cross the state.