Wednesday, October 21, 2015

Opportunity Lost? Can Condemnation Blight be a Taking or a Substantive Due Process Violation?

Take note, property rights mavens: a takings claim is a separate and distinct claim from a substantive due process claim, and it's a mistake to treat them as coextensive. Fresh out of the Third District Court of Appeals is Teitelbaum v. South Florida Water Management District, No. 3D14-963 (Sep. 30, 2015), which focuses on condemnation blight and its relationship to inverse condemnation claims, but which may be more useful for its teachings on framing a property rights case.

A large group of plaintiffs sued the District for depressing the value of their properties that were long zoned as agriculture in order to pursue environmental goals related to the nearby Everglades. The District had bought up as much land as it could in the area, and when it could not acquire their properties, it passed a condemnation resolution. It did not make any attempts to actually acquire the properties, though. Slip Op. at 4. The plaintiffs further alleged that the District had prevented Miami-Dade County from rezoning the properties and that the District's acquisition of property in the area in a "checkerboard" fashion prevented the plaintiffs from developing their properties. Slip Op. at 5.

Because there was no physical taking and the plaintiffs had not applied for a development permit to test what could be permitted, the plaintiffs were stuck asserting a novel claim:
Likely recognizing that the Water District’s conduct would not constitute a taking under the traditional takings formulations, the Plaintiffs have not argued their claims under any ... well-established standards. Rather, the Plaintiffs urge this Court to recognize a new cause of action and adopt a new category of governmental activity that will result in a per se taking: condemnation blight. Under the Plaintiffs’ proposed formulation for a condemnation blight claim, a constitutional taking would occur when: (1) the government makes an official, publicly-announced declaration of its intent to condemn the property that goes beyond mere planning; (2) the government engages in some postannouncement unreasonable conduct, such as protracted delay in actual condemnation proceedings or interference with the property owner’s rights; and (3) the property suffers impairment of value or the property owner’s use and enjoyment of the property is disrupted. We decline to adopt this proposed standard as a per se taking.
Slip Op. at 10.

The Court's opinion isn't terribly surprising. In Florida, condemnation blight is about value: it precludes the government from depressing the value of a property before it subjects it to a de jure or de facto taking by calculating the property's value before it was depressed.Earlier this year, the court had held that condemnation blight does not itself give rise to a taking, although condemnation blight may be considered when the property is valued for the government's liability. On rehearing, the court withdrew that opinion and reissued one that held the same thing, with some further embellishment, explaining.

The interesting part about the opinion is in the court addressing the plaintiffs' focus on the District's "unreasonable" conduct rather than on the effect on their property." The court held that this "perspective confuses the aim of the Takings Clause, as the cases uniformly analyze the effect of the governmental actions and regulations on the property to determine whether they are so onerous as to constitute an ouster." Slip Op. 11.

Attentive readers of this blog might think this sounds more like a Substantive Due Process argument, since it focuses on the government's means rather than on its ends. And you would be right. However, the court declined to take that issue up on rehearing, deeming it to have been abandoned:
One of the appellants’ primary arguments in their motion for rehearing is that this Court should have analyzed their Due Process Clause claims as a distinct cause of action separate and apart from their Takings Clause claims under the authority of Tampa-Hillsborough County Expressway Authority v. A.G.W.S. Corp., 640 So. 2d 54, 57-58 (Fla. 1994). While there is an interplay between these two constitutional clauses and many takings claims are analyzed coextensively with due process claims, the appellants are correct that these claims can be pled as distinct causes of action when the allegations involve governmental actions or regulations on private property. Id. The alleged unreasonableness of the Water District’s actions, while irrelevant for a takings analysis, would certainly have been germane to the Plaintiffs’ substantive due process claim, and their argument would likely require further consideration had it been raised prior to the Plaintiffs’ motion for rehearing. In this case, however, the trial court treated both causes of action as coextensive and made no separate findings or rulings regarding the Plaintiffs’ due process claim. The appellants did not challenge that aspect of the trial court’s decision below, did not brief or argue that issue before this court—indeed, they did not even independently cite the A.G.W.S. decision in their initial or reply brief—and now raise this point of error for the first time in their motion for rehearing. As such, the appellants have waived that issue ... and we do not comment on the merits of that claim.
Slip Op. at 11-12. Too bad. We could have used some more guidance here in Florida on Substantive Due Process challenges to the government's unreasonable actions to prevent development. 

Lesson learned: figure out whether you're challenging the government's means or its ends early on in a property rights challenge.