Why has this Roanoke property been condemned?

Last month, Roanoke Judge William D. Broadhurst granted Roanoke Redevelopment and Housing Authority's (RRHA) petition to take private property owned by Jay and Stephanie Burkholder (B&B Holdings, LLC) using the Authority's power of eminent domain. Judge Broadhurst indicated in his November 12, 2009 correspondence to counsel that although evidence had been presented by B&B's attorneys which "clearly suggests to the Court that the City was responding to pressure from Carilion in trying to direct the conclusions that RRHA would reach" with respect to the blight study, RRHA had been sufficiently insulated and had independently found “blight” in the neighborhood, and therefore the B&B property could be taken.

Judge Broadhurst overruled B&B's objection to the taking of it's 3-acre tract by eminent domain as part of a redevelopment plan closely linked to Carilion's proposed multi-use business park and medical school along South Jefferson Street in Roanoke, Virginia. Following the November court ruling, Carilion began a public campaign to distance itself from the condemnation of the Burkholders' property. A Carilion spokesperson indicated shortly after the court's ruling that "Carilion does not need the [Burkholder's] land and has not requested it from anybody." (See Laurence Hammack's article, Roanoke couple's land condemned -- but why?)

However within weeks of the court's ruling, The Roanoke Times (See E-mails document Carilion's interest in recently condemned business property), obtained under a public records request email communications between city officials and Carilion documenting years of collusion between the City, it's Housing Authority and the private medical company. The fact that Carilion now claims that it does not want the B&B property dramatically alters the Burkholders’ situation. Carilion is obligated to buy the B&B property from the City once it has been seized by eminent domain, meaning Roanoke is taking private property that its preferred developer has no use nor desire to redevelop.

Background of the case

In 2000, the City of Roanoke contracted with Carilion to acquire 110 acres in Roanoke to build a biomedical park. Rather than purchase the properties on the open market, the City authorized the Roanoke Redevelopment and Housing Authority (RRHA) to take the properties by eminent domain and sell the condemned land to Carilion. However, before the power of eminent domain could be legally exercised by the RRHA, a blight study concluding that the majority of the area was blighted had to be conducted.

The City, through RRHA, devised a redevelopment plan based upon a study that declared the industrial and commercial neighborhood surrounding the Burkholders' 3-acre property as blighted. The Burkholders’ property, however, was not found to be blighted.

The Burkholders’ property was condemned on June 29, 2007, one day before a new Virginia law would have required a finding that the property itself was blighted in order to be condemned.

For several years, the Burkholders have fought the taking of their property. In the summer of 2009, their attorneys at Waldo & Lyle, PC in Norfolk presented 3 days of evidence demonstrating that the area was not blighted and that the experts who conducted the study finding blight were influenced by the City and by Carilion to conclude a blight finding. Further, attorney Joseph T. Waldo argued that the RRHA's purpose of "economic development" for the area designated as "blighted" is not a “public use” for which the power of eminent domain may be used. (Disclosure: Joseph Waldo is a Member of OCA.)

This week, Joseph Waldo, Burkholder's attorney, filed a motion requesting the court to reconsider its prior opinion and allow the property owner to present the new email evidence obtained after Carilion stated it did not need nor want the Burkholder's property. Yesterday, Mr. Waldo and his client, Stephanie Burkholder, appeared on Fox News' Fox and Friends to discuss the case and their hope that the court will reconsider its November decision. (See Fox News Video: Abuse of Power?)

With Pfizer's recent decision to pull its operation out of New London, Connecticut, the city made infamous by the U.S. Supreme Court's 2005 Kelo decision, the change of heart expressed by Carilion begs one to ask -- why take the Burkholder's private property, where a thriving business operates, if there is no need or use for it by Carilion?

We will be following this case and update as new information is uncovered and when the court rules on the Burkholder's motion for reconsideration.

More news regarding this case

Judge rejects property condemnation claim

These Grinches Aren't Bringing Back Christmas

Land owners ask judge to reopen condemnation case

Photo above: Carilion Roanoke Memorial Hospital is reflected in the front windows of Burkholder's flooring business, Surfaces.

Photo credit: Photos by Jeanna Duerscherl | The Roanoke Times

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Joshua E. Baker, an attorney with Waldo & Lyle, PC in Norfolk, Virginia, the firm representing Stephanie and Jay Burkholder contributed to this post.

SCOTUS: Stop the Beach Renourishment

As we noted here previously, the U.S. Supreme Court heard oral arguments yesterday in the most recent property rights case to go before the bench Stop the Beach Renourishment, Inc. v. Florida Dep't of Environmental Protection.

This is the first takings case that has come before Chief Justice Roberts and Justices Alito and Sotomayor since each have joined the bench and the first major property rights case to reach the bench since Kelo.

Additionally, it has been confirmed that Justice Stevens was absent from yesterday's argument and has recused himself from the case as he owns beachfront property in Florida and, therefore, might be directly affected by the decision of the Court. It is important to note, with respect to the absence of Justice Stevens, that if the Court was to reach a 4-4 decision in this case, the decision of the lower court would be upheld without comment. If the Court is split 4-4, no permanent decision would be issued and nothing would change with respect to the case or its outcome.

Although we will not attempt to predict the outcome of this case, we certainly enjoyed reading what others have predicted and would like to point to the blog analysis of Professor D. Benjamin Barros regarding yesterday's argument and his predictions as well as the suggestion of Professor John D. Echeverria, as quoted on the NY Times blog, that the State of Florida would "win."

Since there has already been so much analysis of the arguments and the possible decision of the Court, we simply point out what we see an the fundamental issue in this case and why it is important for property owners not just in Florida but around the country and not just with waterfront land but any property anywhere. The fundamental issue is whether a state court can alter a century of common law practice without relevant precedent and effectuate a 'judicial taking." The Petitioners/property owners in Stop the Beach have argued that the Florida Supreme Court did effectuate a judicial taking by overturning a century of common law regarding littoral rights. The Petitioners argued further that a test to determine whether a judicial taking has occurred would be to apply a test proposed by Justice Potter Stewart in his concurring opinion in Hughes v. Washington, 389 U.S. 290 (1967). Justice Stewart suggested that a judicial taking occurs when a property owner loses property rights under a state court decision that “constitutes a sudden change in state law, unpredictable in terms of relevant precedents.” It is precisely this that the Petitioner and many briefs in support of the Petitioners have argued - that the Florida Supreme Court disregarded years of common law precedent and in its 2008 opinion created a situation by which the property owners were deprived of their littoral property rights without just compensation and, as such, this is a violation of the 5th Amendment.

For additional commentary on yesterday's argument in Stop the Beach see these links:

• SCOTUS Oral Arguments in the Judicial Takings Case: Are 'Background Principles" of Property Law Completely Up to State Judges? (Part I, II, & III) - Robert Thomas

• Of Hotdog Stands and Beach Parties--Oral Argument in Stop the Beach - Prof. Ben Barros

• Does Denying Property Owners Ownership Rights to Land Up to the Water Line Amount to a “Judicial Taking”? - Prof. Ilya Somin (Note: Robert Thomas did file a brief in this case on behalf of the Owners' Counsel of America, however, the brief and OCA's position is not in support of the Respondents but rather the Petitioners/property owners.)

• A Florida Case with National Implications - Timothy Sandefur and Steven Geoffrey Gieseler

• Justices Debate Rights of Beachfront Landowners - Bill Mears, CNN

• A Stevens-less Court talks Beach Parties, Erosion and Judicial Takings - Ashby Jones, Wall Street Journal Law Blog

Transcript of SCOTUS oral argument available online

The Supreme Court has released the unofficial transcript for today's argument in Stop the Beach Renourishment, Inc. v. Florida Dept. of Environmental Protection. A pdf of the transcript is available here. More to follow once we have had time to read it.

UPDATE: While we continue to review the transcript, we did want to mention a post we caught by Ben Barros on the PropertyProf blog this afternoon. (Professor Barros may have attended the arguments this morning and have a bit more insider information as he indicated that he's updating the post from his notes.) What we find interesting and wish to repeat is his comment about the absence of Justice John Paul Stevens from the bench today: "Informed comment around the Court seemed to be that he has recused himself because he owns Florida beachfront property. This is a potentially big deal because (a) Justice Stevens has been the most vocal advocate of the government position in the Supreme Court's recent regulatory takings jurisprudence and (b) because it increases the chances of a 4-4 decision."

Fox Video: Eminent Domain Ghost Town

Yesterday Fox Business News featured a segment on eminent domain with John Stossel. OCA Member and Institute for Justice Senior Attorney, Dana Berliner (co-counsel to Susette Kelo), and Jeff Benedict, author of "Little Pink House." Discussion focused on Kelo, Pfizer's recent announcement that it would leave New London and eminent domain abuse in general. Stossel also points to Anaheim, California as an example of how government can stimulate development by streamlining building and zoning regulations, avoiding eminent domain and saving tax payers dollars.

To view the video click here.

Thanks to Robert Thomas for alerting us to this video on his blog.

Supreme Court will hear oral argument in Florida beach takings case

On Wednesday, December 2, 2009, the U.S. Supreme Court will hear oral arguments in Stop the Beach Renourishment, Inc. v. Florida Dep't of Environmental Protection, et al. For background on the case see our previous posts here and here as well as the case resource page on inversecondemnation.com by OCA Hawaii Member, Robert Thomas.

This is the first major property rights case to reach the Court since Justice Sonia Sotomayor has joined the bench and, some may argue, since the Court's controversial decision in Kelo v. City of New London, in which the Court upheld the taking of private property for the purpose of giving that land to Pfizer for a the development of its corporate headquarters was a "public purpose" under the 5th Amendment. [It is important to note that Pfizer has not only abandoned the plan to construct the company's headquarters in New London but also recently announced that it will be pulling 1,400 jobs out of the City and closing it's current operations based there as a cost cutting measure. See NY Times Nov. 13, 2009 article here.]

Links to the merits briefs as well as amicus briefs are available on the American Bar Association's website here (disclosure: Owners' Counsel of America submitted an amicus brief on behalf of the property owners). Additionally, the Court will hear directly from the Solicitor General tomorrow as the SG's motion for leave to participate in oral arguments as amicus for the State of Florida was granted by the Court in October.

For recent news articles concerning the case and additional commentary see:
Washington Post (November 24, 2009)
Associated Press (November 30, 2009)
The Destin Log (covering the Florida town in which this dispute arose)
The CATO Institute (December 1,2009 - daily podcast with Ilya Shapiro)