Tuesday, June 25, 2013

Early Roundup of Koontz Commentary

Earlier today, I wrote about the win for landowners in Koontz v. St. Johns River Water Mgmt. Dist., No. 11-447 (June 25, 2013). On reading the opinion, my favorite line so far:
Extortionate demands for property in the land use permitting context run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation. As in other unconstitutional conditions cases in which someone refuses to cede a constitutional right in the face of coercive pressure, the impermissible denial of a governmental benefit is a constitutionally cognizable injury.
Here's a roundup of commentary thus far:
So how will the federal courts eventually exit this quagmire? The answer might be remedial equivocation. Nollan-Dolan has so far mostly been a dead letter in zoning litigation, because the remedy in lower courts has usually (although not universally) been restoration of the pre-exaction status quo in which the developer is unconditionally denied the desired permission to build. (See Goss v. City of Little Rock, (8th Cir. 1996), for an example of how this remedy guts the right, or read Mark Fenster's Failed Exactions). Such a remedy means that developers will rarely sue, and the ones that do sue get nothing for their troubles. Koontz did nothing to disturb this remedial equivocation, declaring that "[b]ecause petitioner brought his claim pursuant to a state law cause of action,the Court has no occasion to discuss what remedies might be available for a Nollan/Dolan unconstitutional conditions violation either here or in other cases" (Slip op. at 11). 
This may be the most important sentence in the opinion -- a hint at the SCOTUS's "exit strategy" when developers start challenging plazas, parks, playgrounds, and the like. San Remo Hotel v. San Francisco severely limits developers' power to bring a federal takings claim in federal court: If state courts can continue to define the Nollan-Dolan remedy as invalidation of the illegal condition and denial of the zoning permission, then Koontz will be a practical dead letter. And a good thing, too, if one cares about federalism and believes, as I do, that Nollan-Dolan was always a quixotic expedition to control land-use decisions far too numerous and fact-specific to be amenable to federal judicial policing.
  • But Prof. Ilya Somin (George Mason) begs to disagree: "Overall, Koontz is the most important victory for property rights in the Supreme Court for a long time." That's because "Koontz addresses two major issues that previous Supreme Court cases had not covered: Whether the requirements of Nollan and Dolanapply when the government denies a permit, as opposed to issuing it with attached conditions, and whether those requirements apply to cases where the burden imposed by the government is an obligation to finance off-site “mitigation” as opposed to requiring the property owner to allow a physical invasion of his land. The Supreme Court majority answered “yes” to both questions. I think they got both of them right."

U.S. Supreme Court Says Government Demands for Property Must Satisfy Exactions Law, Even Where Permit is Denied and Where Demands are for Money

In an important win for landowners everywhere, the U.S. Supreme Court has ruled for landowners in the exactions case I've been writing about for quite some time. Koontz v. St. Johns River Water Mgmt. Dist., No. 11-447 (June 25, 2013). Recall that this is the case where Koontz asked the Court to establish (1) that the Nollan-Dolan exactions test applies even where a permit is denied because an applicant rejects an exaction, and (2) that the Nollan-Dolan exactions test applies to exactions other than real property, such as where a permit applicant is required to pay for work. My colleague Dave Smolker and I submitted an amicus brief in support of the property owners in this case.

The Court agreed with Koontz on both points, overturning the decision of the Florida Supreme Court. I'll post some analysis once I've had time to digest the opinion. In the meantime, here are some excerpts. On the first question:
The principles that undergird our decisions in Nollan and Dolan do not change depending on whether the government approves a permit on the condition that the applicant turn over property or denies a permit because the applicant refuses to do so. We have often concluded that denials of governmental benefits were impermissible under the unconstitutional conditions doctrine. See, e.g., Perry, 408 U. S., at 597 (explaining that the government “may not deny a benefit to a person on a basis that infringes his constitutionally protected interests” (emphasis added)); Memorial Hospital, 415 U. S. 250 (finding unconstitutional condition where government denied healthcare benefits). In so holding, we have recognized that regardless of whether the government ultimately succeeds in pressuring someone into forfeiting a constitutional right,the unconstitutional conditions doctrine forbids burdening the Constitution’s enumerated rights by coercively withholding benefits from those who exercise them. 
A contrary rule would be especially untenable in this case because it would enable the government to evade the limitations of Nollan and Dolan simply by phrasing its demands for property as conditions precedent to permit approval. Under the Florida Supreme Court’s approach, a government order stating that a permit is “approved if ”the owner turns over property would be subject to Nollan and Dolan, but an identical order that uses the words “denied until” would not. Our unconstitutional conditions cases have long refused to attach significance to the distinction between conditions precedent and conditions subsequent. See Frost & Frost Trucking Co. v. Railroad Comm’n of Cal., 271 U. S. 583, 592–593 (1926) (invalidating regulation that required the petitioner to give up a constitutional right “as a condition precedent to the enjoyment of a privilege”); Southern Pacific Co. v. Denton, 146 U. S. 202, 207 (1892) (invalidating statute “requiring the corporation, as a condition precedent to obtaining a per- mit to do business within the State, to surrender a right and privilege secured to it by the Constitution”). See also Flower Mound, 135 S. W. 3d, at 639 (“The government cannot sidestep constitutional protections merely by rephrasing its decision from ‘only if’ to ‘not unless’”). To do so here would effectively render Nollan and Dolan a dead letter.
On the second question:
Respondent’s argument rests on a mistaken premise. Unlike the financial obligation in Eastern Enterprises, the demand for money at issue here did “operate upon . . . an identified property interest” by directing the owner of a particular piece of property to make a monetary payment. Id., at 540 (opinion of KENNEDY, J.). In this case, unlike Eastern Enterprises, the monetary obligation burdened petitioner’s ownership of a specific parcel of land. In that sense, this case bears resemblance to our cases holding that the government must pay just compensation when it takes a lien—a right to receive money that is secured by a particular piece of property. See Armstrong v. United States, 364 U. S. 40, 44–49 (1960); Louisville Joint Stock Land Bank v. Radford, 295 U. S. 555, 601–602 (1935); United States v. Security Industrial Bank, 459 U. S. 70, 77–78 (1982); see also Palm Beach Cty. v. Cove Club Investors Ltd., 734 So. 2d 379, 383–384 (1999) (the right to receive income from land is an interest in real property under Florida law). The fulcrum this case turns on is the specific parcel of real property.2 Because of that direct link, this case implicates the central concern of Nollan and Dolan: the risk that the government may use its substantial power and discretion in land-use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed new use of the specific property at issue, thereby diminishing without justification the value of the property. 
In this case, moreover, petitioner does not ask us to hold that the government can commit a regulatory taking by directing someone to spend money. As a result, we need not apply Penn Central’s “essentially ad hoc, factual inquiry],” 438 U. S., at 124, at all, much less extend that“already difficult and uncertain rule” to the “vast category of cases” in which someone believes that a regulation is too costly. Eastern Enterprises, 524 U. S., at 542 (opinion of KENNEDY, J.). Instead, petitioner’s claim rests on the more limited proposition that when the government commands the relinquishment of funds linked to a specific,identifiable property interest such as a bank account or parcel of real property, a “per se [takings] approach” is the proper mode of analysis under the Court’s precedent. Brown v. Legal Foundation of Wash., 538 U. S. 216, 235 (2003).

Friday, June 21, 2013

Second Quarter 2013: Recent Florida Environmental and Land Use Case Law

The Florida Bar's Environmental and Land Use Law Section has posted its column on the environmental and land use cases in Florida that you need to know about for the second quarter of 2013. This is the column that I formerly coauthored. Here is what we've got this quarter:
  • Clipper Bay Invs., LLC v. Dep’t of Transp., No. 1D11-5496, 2013 WL 425882 (Fla. 1st DCA Feb. 5, 2013). "The Marketable Record Title Act’s exception for easements and right-of-ways is applicable to land held as a fee estate for the purpose of a right-of-way, so long as competent, substantial evidence establishes the land is held for such a purpose."
  • Wendler v. St. Augustine, 108 So. 3d 1141 (Fla. 5th DCA 2013). As I pointed out previously, the statute of limitations for filing a Bert Harris Act claim in court is within 4 years of the government’s act. Section 70.001(11), it held, is a pre-suit condition merely requiring that a claim be presented to a local government within 1 year of its act.
  • Alachua Land Investors, LLC v. Gainesville, 107 So. 3d 1154 (Fla. 1st DCA 2013). As I discussed, for an inverse condemnation claim to be ripe, the plaintiff should prove (1) the regulation denies substantially all economically beneficial or productive use of the land; (2) alternative uses were applied for and conclusively denied by the regulatory body; and (3) at least one meaningful application has been filed under the existing regulations.
  • Nieto v. Mobile Gardens Ass’n of Englewood, Inc., No. 2D11-4958, 2013 WL 1489377 (Fla. 2d DCA Apr. 12, 2013). "A homeowners association lacks standing to enforce restrictive covenants unless it is the direct assignee of the developer’s right to enforce deed restrictions or it is a successor in interest of the developer."
  • Martin Cnty. Conservation Alliance v. Martin Cnty., No. SC11-2455, 2013 WL 1908644 (Fla. May 9, 2013). As I've discussed previously, the Florida Supreme Court dismissed review of a case from the 1st DCA sanctioning environmental organizations for advancing legal positions unsupported by material law or fact.
For those interested, there are about two years' worth of analysis and these summaries on new environmental and land use cases in Florida in my archives.

    Thursday, June 20, 2013

    Upcoming Presentation about Ethics for Environmental and Sustainability Reporting

    On Thursday, August 8th, come out to the Florida Bar Environmental and Land Use Section's 2013 Annual Update in Ponte Vedra Beach to learn about Ethics for Environmental and Sustainability Reporting. I'll be riding the coattails of my co-presenter, Thea Dunmire, who has taught me much of what I know on this subject. Thea is President of ENLAR Compliance Services, Inc. and has a unique back ground: she has an engineering degree and a law degree, and she is a Certified Safety Professional (CSP), a Certified Industrial Hygienist (CIH), and an RABQSA-certified EMS Lead Auditor. Thea has worked both as an environmental health and safety professional and as an attorney for EPA and a private law firm.

    Here's a brief description of the presentation.
    More and more companies are engaging in environmental and sustainability reporting. Some companies are required to prepare reports under federal laws, such as EPCRA and OSHA. Others voluntarily report on environmental and sustainability efforts due to customer and shareholder pressure. Companies also comment on their sustainability efforts in press releases and during various environmental permitting processes. 
    This presentation will focus on ethical issues related to environmental and sustainability reporting that attorneys and consultants may face. Should ethical standards be different if a reporting program is voluntary than if the program is legally mandatory? What is the role of the attorney and the consultant in ensuring a client’s public statements about its environmental and sustainability reporting are accurate? These questions, and others, will be explored through the use of case studies.
    Check out the Annual Update materials--there are a lot of other great presentations!

    Wednesday, June 19, 2013

    U.S. Supreme Court Carefully Avoids Commerce Clause Implications of Water Rights Dispute

    The U.S. Supreme Court recently decided this this year's water law caseTarrant Regional Water District v. Herrmann, 569 U. S. _, No. 11-889 (2013). I've written about how those of us in Florida and the Southeast should watch this one since it may have implications if our states enter into water compacts in the future. I've also written about how although this case has constitutional law implications in the dormant commerce clause, the U.S. Supreme Court didn't seem interested in addressing that issue. And indeed, it was not, which is probably why the opinion was unanimous.

    Over at SCOTUSblog, Columbia Law Professor Thomas Merrill offers a good one-paragraph summary of the meat of the opinion, which interpreted the water compact between the states:
    The Red River Compact allocates water between four states, including Texas and Oklahoma. Among other things, it provides that each of the four states can take twenty-five percent of the excess water in a particular subbasin in the river. Texas argued that, under the compact, it could take twenty-five percent of all of the excess water, and that it had could go into Oklahoma’s part of the subbasin to do that. Oklahoma disagreed, arguing that Texas could only take twenty-five percent of the excess water from its own part of the subbasin. The Court agreed with Oklahoma, ruling that Texas was not authorized to take water from tributaries in Oklahoma without Oklahoma’s consent.
    On the question that readers of the blog are likely more interested in--the commerce clause issue--Prof. Merrill writes:
    The Court also rejected the Texas water district’s dormant Commerce Clause claim, but did so in a way that deprives this part of the decision of any significance. The Court read the water district to argue that the Commerce Clause was violated because Oklahoma was discriminating against out-of-state users with respect to water that was left “unallocated” under the Compact. The argument failed, according to the Court, because there would be no unallocated water in Oklahoma unless Texas could show that Oklahoma was taking more than twenty-five percent of the excess water, and it had not asked for an accounting to establish this fact. In effect, the Court read the compact as superseding the dormant Commerce Clause with respect to the twenty-five percent share allocated to each state; a constitutional issue would be presented only if it could first be established that water was available in a state above this threshold and the state was discriminating against interstate sources with respect to the excess.
    At this point you, like me, are probably asking what the significance of Tarrant will be going forward. Prof Merrill continues:
    What then is significant about this decision for those not directly engaged in battles over the Red River Compact? The Court establishes, in a footnote, that a congressionally approved compact, as federal law, preempts state law that conflicts with the compact under the Supremacy Clause. It also establishes, in another footnote, that the presumption against preemption does not apply to interstate compacts, because “the States themselves have drafted and agreed to the terms” of the compact. There is some quotable language in the section about the states’ sovereign prerogative to control water resources within their territories, which will undoubtedly be trotted out in future cases involving apportionment of waters, the public trust doctrine, and the like. And portions of the Court’s opinion provide an excellent example of “pragmatic” interpretation, especially where it talks about the administrative difficulties that would be created by recognizing a cross-border right to divert water without additional guidance from Congress or the affected states.
    The Tarrant Regional Water District has now been sent packing and needing to develop new water sources quickly. Its director is already facing some tough questions about whether the $6M+ dollars spent in the battle were worth it.

    Monday, June 10, 2013

    Defending against Enforcement Actions with the Takings Clause: Good News for Agriculture and Property Owners in U.S. Supreme Court

    What's that, you say? The U.S. Supreme Court has just decided a second Takings Clause case this term, unanimously--and in the property owner's favor?

    Indeed. In today's opinion by Justice Thomas, the Supreme Court again ruled favorably for property owners. Horne v. U.S. Department of Agriculture, No. 12-236 (June 10, 2013). Recall that this is the case where raisin producers raised the Takings Clause as a defense to the  imposition of fines for a New Deal agricultural marketing law. In response, the government argued that the raisin producers can try their hand at bringing a separate lawsuit but cannot use it as a weapon against government enforcement. The Ninth Circuit bought the government's argument, but the U.S. Supreme Court did not.

    While carefully noting that it was not ruling on the merits of the raisin producers' takings claim, the Supreme Court held that a "takings-based defense may be raised by a handler in the context of an enforcement proceeding initiated by the USDA under §608c(14)." Slip Op. at 14. The practical result of this holding is that the raisin producers will get to assert their takings defense below. So, their saga continues, but as in a case decided last year, Sackett v. EPA, the good news is that landowners continue to open the door to judicial review of abusive government processes. That is, the takings clause has been strengthened as a weapon for the property owner to use when the government brings enforcement actions against the property owner.

    There's no media coverage of the case yet, but I'll update you when it becomes available. In the meantime, to catch up on the background of this case, see my archives. Stay tuned. We're still waiting on a decision in Koontz v. St Johns River Water Management District, No. 11-1447 (argued Jan. 15, 2012), which has some theoretical similarities to Horne. Here's hoping property owners go three-for-three at the U.S. Supreme Court this term.

    Wednesday, June 5, 2013

    The Forest Roads Litigation: A Win for Landowners, but the Long Journey Continues

    I'm grateful to the editors of the South Carolina Forest Steward, sponsored by Clemson's University's Cooperative Extension Service and the South Carolina Forestry Commission, for asking me to provide their readers with an update on the forest roads litigation following the U.S. Supreme Court's recent decision. This is a great newsletter that forest landowners throughout the Southeast may be interested in.

    The article is reproduced below. This article was written as an analysis of the Court's decision, so it is not an up-to-the-minute update. I'll be providing that update in an upcoming post over the next couple of weeks.

    The Forest Roads Litigation: A Win for Landowners, but the Long Journey Continues

    Imagine if you needed to ask the federal government’s permission to harvest timber. Recently, the U.S. Supreme Court rejected an environmental organization argument to require just that. In March, the Court reversed a Ninth Circuit Court of Appeals decision that required forest and logging roads to be permitted under the Clean Water Act. See Decker v. Nw. Envtl. Def. Ctr., 568 U.S. _ (2013) (consolidated cases 11-338 and 11-347). You may recall that the Ninth Circuit is the court that gave us the highly-publicized decisions protecting the spotted owl in the Pacific Northwest and eliminating timber harvesting in many communities. It is also the court that the Supreme Court overturned last year in an important case that for the first time gave landowners the right to take the U.S. Environmental Protection Agency (“EPA”) to court when it issues fines and penalties against the landowners. See Sackett v. EPA, 132 S. Ct. 1367 (2012).

    Forestry professionals and forest landowners were paying attention to this case because it addressed two important questions. First, would all forest and logging roads require a time-consuming and expensive permit? Second, would forest landowners be exposed to the risks of citizen suits by environmental organizations seeking to enforce the Clean Water Act? These questions made the Decker case the most important environmental regulatory decision for forestry professionals and forest landowners in recent memory. For the small landowner in the Southeast, permitting costs alone had been estimated at minimum to be $3.13 per acre per year—and as high as $21.46 per acre per year. See http://nafoalliance.org/wp-content/uploads/Road-Permit-Costs-in-South1.pdf.

    Although the Decker decision was a big win for the forestry community, it poses some risks for the future. Ultimately, environmental and regulatory problems are political problems; you should continue paying attention to this issue and discuss it with your elected officials.

    The Forest Roads Litigation

    The Supreme Court’s decision in Decker is just the latest in a long fight over the murky provisions of the federal Clean Water Act. The parties have already been litigating this issue for about seven years. Some background about the Clean Water Act will help frame this discussion. Under the Clean Water Act, pollutants may not be put into waters of the United States by a “point source” without a National Pollutant Discharge Elimination System (“NPDES”) permit. A point source is more or less any discreet conveyance that could discharge pollutants, such as a pipe, ditch, channel, tunnel, or conduit. Nonpoint sources are not regulated. Congress chose to regulate pollution this way because the technology of the 1970’s could only feasibly regulate point sources. Over the past 40 years, we have become very good at assessing and treating point source pollution. We have not been as successful dealing with pollution from non-point sources, and so environmental organizations have been attempting to cast ever-wider nets using outdated laws.

    In a lawsuit attempting to do just that, in 2006, a nonprofit organization based at Lewis & Clark Law School called the Northwest Environmental Defense Center (“NEDC”) sued a group of landowners—the Oregon State Forester, the Oregon Board of Forestry, and various timber companies—in federal court. NEDC argued that the system of ditches, culverts, and channels that collected stormwater on two forest roads that the landowners used in the Tillamook State Forest required were point sources.

    The landowners argued that the roads and their associated natural stormwater systems were exempt from NPDES permitting because they fell under EPA’s longstanding Silvicultural Rule. The Silvicultural Rule was developed in 1976. It exempts most silvicultural activities from classification as a “point source”, including “nursery operations, site preparation, reforestation and subsequent cultural treatment, thinning, prescribed burning, pest and fire control, harvesting operations, surface drainage, or road construction and maintenance from which there is natural runoff.” 40 C.F.R. § 124.85 (1976).

    The federal trial court dismissed NEDC’s case. It agreed with the landowners that the timber road runoff collected into a system of ditches, culverts, and conduits and were exempt from permitting requirements under the Silvicultural Rule. Nw. Envt’l Def. Center v. Brown, 476 F. Supp. 2d 1188 (D. Or. 2007). On appeal, however, a panel of judges on the Ninth Circuit struck down the Silvicultural Rule in August 2010. The landowners asked the Ninth Circuit to reconsider the issue before a much larger panel of judges. It agreed and issued a new decision in May 2011, but it still held that the Silvicultural Rule was invalid. See Nw. Envtl. Defense Ctr. v. Brown, 640 F.3d 1063 (9th Cir. 2011). It said that when agencies adopt rules, those rules must be consistent with the statutes they are developed under—and the Silvicultural Rule was inconsistent with the Clean Water Act.

    The state of Oregon appealed the ruling to the U.S. Supreme Court, with the support of 25 other states, as well as a number of forest landowners and forest industry organizations. As the parties submitted their written arguments, most observers thought that the forestry interests had the stronger case. On the eve of oral arguments, however, EPA surprised everyone by issuing—in record time—a new rule to replace the rule that the Ninth Circuit struck down. EPA said the new rule left the U.S. Supreme Court with no reason to hear the case. Consequently, instead of talking about the substance of the case, the parties spent all their time arguing about what should happen to the case after the new rule. The Supreme Court Justices, as you might imagine, were not happy that they had not been told about this new development, and so they ordered the parties to submit additional written arguments about the new EPA rule.

    Meanwhile, out in the Ninth Circuit, NEDC immediately sued EPA seeking to have the new rule declared invalid. Forest industry groups requested to intervene in the case, which the Ninth Circuit allowed. The industry groups were concerned because the new rule only addresses logging roads, which are temporary roads. The new rule specifically stated that EPA was still considering what to do with more permanent forest roads. Don’t expect the Ninth Circuit to determine whether the rule is valid before the end of 2013.


    This brings us to the U.S. Supreme Court’s decision in Decker. After the complications of EPA’s new rule, most observers thought it was unlikely that the Supreme Court would address the actual Clean Water Act permitting issues. In a pleasant surprise for the forestry community, the Supreme Court did, saying that EPA’s rules exempt “discharges of channeled stormwater runoff from logging roads form the NPDES permitting scheme.” It reasoned that EPA’s interpretation of its own regulations was reasonable, was longstanding, and complied with the intent of the Clean Water Act.

    The Supreme Court could have stopped there, but it went on to congratulate Oregon on a job well done in implement its forestry best management practices. The Supreme Court seemed to recognize, as commentators and scientists have pointed out, that a nationwide Clean Water Act permitting regime might actually lead to less clean water. In doing so, it recognized the importance of allowing landowners and the forestry community to work together voluntarily to address environmental problems, rather than requiring a control-and-command regulatory environment.

    The Decker decision, however, was not all good news for the forestry community. The Supreme Court said that it was proper for the NEDC to bring its challenge to the Silvicultural Rule, which was over 30 years old. Normally, a rule created by an agency can only be challenged for a short period of time before it becomes law. The Supreme Court ruled that because the challenge was actually to whether the landowners had proper permits under the Clean Water Act, they were not actually challenging the rule directly. This will, unfortunately, lead to more litigation by environmental organizations that do not like longstanding rules. Landowners may be open to these lawsuits, even if they follow all of the agencies’ rules and recommendations. With this risk, and the new outstanding lawsuit out in the Ninth Circuit, the Clean Water Act remains an issue that the forestry community must stay abreast of.

    What can you do? To keep from being surprised, forest landowners and forestry professionals may want to start thinking through their contracts. It was already a good idea to keep track of who is responsible for getting environmental and land use permits, but with legal uncertainty still looming, it may also be a good idea to include in contracts language that determines who should pay for, draft, and submit permit applications that are developed after a contract is signed.

    As for a long-term solution, congressional action permanently exempting silviculture in all its forms from the Clean Water Act would be the best solution. Recent election-year politics have not yielded results, but now that the Supreme Court has ruled, this issue may not be as contentious as it once was. Bills have been filed over the last couple of years that would have solved all of this litigation, but they were not passed. You can help by calling your U.S. senators, congressmen, and congresswomen and asking them to reintroduce or support the Silvicultural Regulatory Consistency Act (last year’s bills were numbers H.R. 2541 and S. 1369). Remember, as I mentioned, that with all environmental law and regulatory problems, the real solution is political.

    Jacob T. Cremer practices property rights, environmental, and land use law at Smolker, Bartlett, Schlosser, Loeb & Hinds, P.A., based in Tampa, Florida. His passion for these areas of the law comes from growing up in a family that has been involved in forestry in Florida for five generations and in South Carolina for thirty years. He assisted counsel of record before the U.S. Supreme Court for the landowners in Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 130 S. Ct. 2592 (2010). He co-authored an amicus brief to the U.S. Supreme Court in support of the landowner in Koontz v. St Johns River Water Management District, No. 11-1447 (argued Jan. 15, 2012). Follow the developments on the cases discussed here and others at his blog, The Florida Land Environment, www.jacobtcremer.com.