Takings of Personal Property: The Importance of Framing A Case

Suppose a local government suddenly bans the production and sale of widgets because public opinion is that the widgets contribute to obesity. Although the land where the widget factory is located could be used for other purposes, the widgets are now worthless because they can’t be sold. And the widget maker has lost a great deal of the capital that was invested in the widget factory and equipment. Does the widget maker have an inverse condemnation claim? It may depend on whether his taking claim is framed as one for tangible or personal property, and not of real property. A claim that the real property had been taken would not likely be successful, since in this hypothetical, it could be used for other purposes.

Most readers will recall that there are physical takings and regulatory takings. Regulatory takings can be complete takings of all economically beneficial uses of a property—or they can be less, in which case courts use a balancing test to determine whether there has been a taking. Most of us in the environmental and land use arena are at least familiar with these concepts when it comes to real property. But what about tangible property?

As recent decisions from the U.S. Supreme Court and Florida courts make clear, tangible or personal property is also protected by the Fifth and Fourteenth Amendments. In Horne v. Department of Agriculture, 576 U.S. _, No. 14-275 (2015), which was decided earlier this year and has been bouncing around the courts for years, the U.S. Supreme Court examined a federal regulation requiring raisin farmers to set aside a percentage of each year’s crop for the government’s benefit—without payment. The Supreme Court held this to be a taking, tracing back the law of personal property takings back to the Magna Carta. Further, it held that because the taking was physical (as opposed to merely a regulatory burden), there was a per se taking, without regard to whether any claimed public benefit or the economic impact on the owner.

Florida's First District Court of Appeal has agreed in a case involving Florida’s oft-ridiculed “pregnant pig” constitutional amendment that banned the use of gestation crates in 2002. State v. Basford, 119 So. 3d 478, 480 (Fla. 1st DCA 2013). There, a farmer who had made substantial improvements to his property and based his pork business on use of the crates brought an inverse condemnation suit against the state. Explaining that “real property, tangible property, and intangible property may be the subject of a takings claim,” the court emphasized that the farmer had not alleged a taking of real property. Id. at 483. Rather, he claimed that the constitutional amendment had taken all economically viable use of his business assets—which included barns, animal crates, a feed mill, and lab equipment. Id. at 481, 483.

In a colorful concurrence, Judge Wolf saw this taking as just as if the government decided, in lieu of seizing a tractor, that it would allow a farmer to keep the tractor but forbid the owner from turning it on. Id. at 484. This explanation should give property owners some cheer, since it hints that, as in Horne, complete restrictions in use of personal property should be compared to physical takings. And it gives the attorney a simple framework for thinking about these kinds of problems.

Both these cases are instances of a takings case being successfully (and creatively) framed. In Horne, there was no way to frame a real property takings claim, and in Basford, the court itself recognized that a real property takings claim would not have had much of a chance of success. Inverse condemnation claims are almost always tricky, so why make a case any more difficult than it needs to be? It seems that Ben Franklin would agree that, as for others, for property rights attorneys, an ounce of prevention is worth a pound of cure.

The Intersection of Florida's Homestead Protections and Irrevocable Licenses

This post is a bit different than previous posts. It stems from a real-world issue I dealt with several years ago, and then morphed into an article that I've tinkered with since then. When I tried to publish it, the feedback I received from a state bar section was that it was too narrow to be publishable. I am skeptical of that, but it very well could be true. In any case, I decided to self-publish it, in hopes that it may be useful to someone tasked with dealing with the perplexing intersection of Florida's powerful homestead protections and its murky law of irrevocable licenses. I welcome any feedback.

Florida’s Homestead Protections and Irrevocable Licenses 

This article explores the limitations that the homestead protections in the Florida Constitution place on irrevocable license claims. You may already be skeptical: everyone knows that the homestead protections do not extend to licenses because they are not property interests. Are you sure? I argue that irrevocable licenses may well be captured by the homestead protections against alienation. This could have important implications for both your transactional and litigation practices. 

I. Florida’s Constitution Protects against Alienation of the Homestead

Let’s work through the basics quickly. Article X, section 4 of the Florida Constitution provides for several homestead protections. We are concerned with the protection against alienation in subsection 4(c): “[t]he owner of homestead real estate, joined by the spouse if married, may alienate the homestead by mortgage, sale or gift and, if married, may by deed transfer the title to an estate by the entirety with the spouse.” This requires joinder of both husband and wife for the alienation of homestead property, even if only one spouse is the title owner.[i] Consequently, defective attempts to alienate homestead property are ineffectual and possibly void.[ii]

As an interpretative matter, like other constitutional homestead protections, the protection against alienation is a creature of equity that “must be liberally construed.”[iii] It should be construed in the “interest of the family home,”[iv] and “for the benefit of those whom it was designed to protect.”[v] These rules of interpretation mean, for instance, that because intent and substance are more important than form, the homestead protections may not be avoided indirectly.[vi] They also mean that the protection against alienation extends beyond the mere sale of the homestead. The dictionary definition of “alienation” is a conveyance of property to another.[vii] The constitutional meaning encompasses the broadest possible understanding of this definition: conveyance of “any right, title, or interest whatever in the homestead real estate.”[viii]

II. Irrevocable Licenses are Subject to the Protection against Alienation 

Consider, for example, the wide variety of interests subject to homestead protections: easements,[ix] possessory rights subject to a third-party trust,[x] mortgages,[xi] contracts for purchase and sale,[xii] leases,[xiii] and other contracts concerning interests in land.[xiv] But licenses are not interests in property: they are personal rights to use the property of another for a specific purpose, which are revocable at the will of the grantor.[xv] How then can licenses be subject to the protection against alienation? 

Florida courts have not directly addressed whether the protection against alienation applies to licenses. The evidence suggests, however, that it does apply to some licenses: namely irrevocable licenses. In Florida, unlike in some other jurisdictions, irrevocable licenses are distinct from easements.[xvi] Irrevocable licenses are remedial creatures of equity[xvii] that usually arise as a defense or counterclaim.[xviii] Licenses in Florida only become irrevocable under certain narrow circumstances: where a licensee: (1) is granted use of “property for a particular purpose or in a certain manner,” and (2) “in the execution of that use [expends] large sums or incurred heavy obligations for its permanent improvement.”[xix] In that case, the grantor’s right of revocation is “compromised.”[xx] Therefore, the licensee’s reliance investment is protected for a reasonable duration.[xxi] Even an oral license can become irrevocable.[xxii]

Despite this guidance, Florida and other courts have at times struggled to differentiate between easements and licenses.[xxiii] This is not surprising, since there are numerous cases with interests that share characteristics of both easements and license, such as irrevocable licenses and easements terminable upon a condition subsequent.[xxiv] Consider, for example, that easements are usually permanent but do not have to be, just as licenses are usually revocable at the will of the grantor but do not have to be.[xxv]

Only one case appears to have considered an irrevocable license in the context of the protection against alienation. In High v. Jasper Manufacturing Co., 49 So. 156, 156 (Fla. 1909), Mr. Register sold the rights to cut and remove timber from his homestead to Mr. High. When Jasper Manufacturing began cutting and removing the timber, Mr. High sued for an injunction.[xxvi] Although the trial court originally issued a preliminary injunction, after an evidentiary hearing, it dissolved the injunction because Mrs. Register had not joined in the conveyance in violation of the protection against alienation.[xxvii] Even though there was apparently a bill of sale, the Florida Supreme Court questioned whether the sale of standing timber was written or oral—if it were oral, then the Supreme Court appeared to believe it would operate as an irrevocable license. Ultimately, the Supreme Court did not make a determination, seemingly holding in affirming the trial court that the protection against alienation applied whether the contract was an interest in land or an irrevocable license.[xxviii] Therefore, the Supreme Court may have held that an irrevocable license is subject to the protection against alienation, but it did not do so clearly. 

The unfortunate lack of clarity in the High case can be overcome, however, in considering the nature of an irrevocable license. As described above, it is primarily a remedial and equitable claim. Florida courts generally do not allow defenses to homestead claims, other than fraud. Statutes of limitation and laches generally are not defenses.[xxix] Neither are estoppel[xxx] or waiver.[xxxi] Similarly, courts shy from affirmatively applying documents that violate the protection against alienation.[xxxii] Consequently, between High and this skepticism of Florida courts in allowing defenses to homestead protections, the protection against alienation probably applies to irrevocable licenses. 

III. Implications for the Practitioner 

So what does this mean for the practitioner? Two hypotheticals illustrate the importance of understanding that irrevocable licenses are subject to homestead protections. First, suppose you are drafting a license for the benefit of your client over his neighbor’s homestead. Both parties agree to provisions that restrict the ability of the neighbor to terminate the license. At first glance, it may only seem necessary to have a title owner of the property execute the license. It is not an interest in land, after all. But if the spouse of the neighbor is not a title owner and later wants to terminate the license, your client may have no defense. Therefore, it is prudent to have all beneficial owners of the property execute the license in order to protect against disagreements later. This article suggests it may be most prudent to draft and execute the document as an easement to avoid the problems of interpretation discussed here. 

Second, suppose your client believes he has a valid, recorded easement over his neighbor’s property leading to the entrance of your client’s property. In reliance on that interest, your client has built a road, fence, and extensive landscaping on his neighbor’s property. After an argument, however, the neighbor sues to declare the easement void. You believe that the neighbor has a strong claim because his wife, who lives with him on the property as their homestead, did not sign it. Could you at least ask the court to award your client an irrevocable license in equity? Probably not, according to my analysis. 

In conclusion, as with most real estate questions in Florida, when confronted with a license, practitioners must be ever mindful of the Florida Constitution’s homestead protections. 

[i] Taylor v. Maness, 941 So. 2d 559, 563 (Fla. 3d DCA 2006) (enough that wife lived on homestead property with husband, who was the title owner).

[ii] See Pitts v. Pastore, 561 So. 2d 297, 301 (Fla. 2d DCA 1990)

[iii] Butterworth v. Caggiano, 605 So.2d 56, 58 (Fla.1992); accord Hillsborough Inv. Co. v. Wilcox, 13 So. 2d 448, 450 (Fla. 1943) (“Equity has complete jurisdiction over homesteads and exemptions.”).

[iv] Havoco of Am., Ltd. v. Hill, 790 So.2d 1018, 1021 (Fla. 2001); Heath v. First Nat. Bank in Milton, 213 So. 2d 883, 888 (Fla. 1st DCA 1968) (applying interpretative rule to the alienation protection). In Jones v. Carpenter, 106 So. 127, 130 (Fla. 1925), the Florida Supreme Court explained:

A homestead in this country is for the benefit of the family, where it can be sheltered and live beyond the reach of financial reverses. It is one of the issues of our republican government designed to encourage freeholders, those citizens who are the prop and mainstay of all free government. It is designed to keep sacred and inviolate the home for the family …. It cannot be alienated except as the law directs, and when the parties are sui juris and dealing at arm's length it is notice to the world of all these facts and more.

[v] Taylor, 941 So. 2d at 56.

[vi] Norton v. Baya, 102 So. 361, 363 (Fla. 1924).

[vii] Black’s Law Dictionary (8th ed. 2004).

[viii] High v. Jasper Mfg. Co., 49 So. 156, 157 (Fla. 1909); Thomas v. Craft, 46 So. 594, 596 (Fla. 1908); see also Bessemer Properties v. Gamble, 27 So. 2d 832, 833 (Fla. 1946) (Homestead protections extend to “any right or interest.”).

[ix] In re Minnig, 119 B.R. 326, 327 (Bankr. M.D. Fla. 1990); Dotson v. Wolfe, 391 So. 2d 757, 759 (Fla. 5th DCA 1980).

[x] Callava v. Feinberg, 864 So. 2d 429, 432 (Fla. 3d DCA 2003) (possessor of home protected by homestead, where her name was not on the title, which was held in trust by an unrelated party).

[xi] Pitts, 561 So. 2d at 301 (mortgage).

[xii] Taylor, 941 So. 2d at 562 (contract to sell homestead).

[xiii] In re Alexander, 346 B.R. 546, 551 (Bankr. M.D. Fla. 2006).

[xiv] Adams v. Malloy, 70 So. 463, 465 (Fla. 1915) (lease of timber growing on homestead, with right of ingress and egress for 10 years); High, 49 So. at 157 (whether the sale of timber was a contract concerning an interest in land or a license, it violated homestead alienation protection).

[xv] Dotson, 391 So. at 759; Dance v. Tatum, 629 So. 2d 127, 128 (Fla. 1993).

[xvi] Dance, 629 So. 2d at 128-29.

[xvii] Tatum v. Dance, 605 So. 2d 110, 113 (Fla. 5th DCA 1992) app’d, 629 So. 2d 127 (Fla. 1993).

[xviii] See, e.g., id. at 110 (pleaded defensively by a third party to a foreclosure); Brevard Cnty. v. Blasky, 875 So. 2d 6, 13 (Fla. 5th DCA 2004) (affirmative defense); Dupont v. Whiteside, 721 So. 2d 1259, 1261 (Fla. 5th DCA 1998) (counterclaim).

[xix] Dance, 629 So. 2d at 129. It is unclear whether Florida courts would accept the theory that a license is made irrevocable when it is couple with an interest. See James Ely & Jon Bruce, The Law of Easements & Licenses in Land § 11:8. Such a case may be presented in Richbourg v. Rose, 44 So. 69 (Fla. 1907) (license to cut trees may be irrevocable to the extent of removing trees already cut when license terminated because it was “coupled with an interest”), but it is unclear whether Dance overruled or narrowed it.

[xx] Blasky, 875 So. 2d at 12.

[xxi] Id.; see Tatum, 605 So. 2d at 113.

[xxii] Id.

[xxiii] Dotson, 391 So. at 758 ("The distinction between an easement and a license is often so metaphysical, subtle, and shadowy as to elude analysis.”); Burdine v. Sewell, 109 So. 648, 652 (Fla. 1926) (“An easement is distinguished from a license, though it is often difficult to make out whether a particular case is the one or the other.”).

[xxiv] See Dotson, 391 So. at 759.

[xxv] See id.; Seaboard Air Line Ry. Co. v. Dorsey, 149 So. 759, 761 (Fla. 1932).

[xxvi] Id.

[xxvii] Id. at 157.

[xxviii] Id.

[xxix] Reed, 145 So. 2d at 870 (declining to apply laches or statute of limitations to bar homestead alienation protections, where deed had been recorded for over twenty years).

[xxx] Sigmund v. Elder, 631 So. 2d 329, 331 (Fla. 1st DCA 1994); Moore v. Moore, 237 So. 2d 217, 220 (Fla. 4th DCA 1970).

[xxxi] DeMayo v. Chames, 934 So. 2d 548, 551 (Fla. 3d DCA 2006) approved, 972 So. 2d 850 (Fla. 2007); Callava v. Feinberg, 864 So. 2d 429, 432 (Fla. 3d DCA 2003); In re Estate of Nicole Santos, 648 So. 2d 277, 282 (Fla. 4th DCA 1995).

[xxxii] Taylor, 941 So. 2d 559, 564 (Fla. 3d DCA 2006) (refusing to enforce contract for purchase and sale in a way that would violate the protection against alienation).

Do Macroeconomic and Microeconomic Factors Matter in the Takings Analysis of Economically Beneficial Use?

Nope, according to Florida's Fifth District Court of Appeals. Ocean Palm Golf P'ship v. Flagler Beach, Case No. 5D12-4274 (May 30, 2014). Here's an excerpt:

We agree with Ocean Palm Golf that the government's refusal to act can constitute a total taking under some circumstances. See, e.g., Tollius v. City of Miami, 96 So.2d 122 (Fla.1957) (holding that the denial of property owner's request to rezone lots from residential to commercial was an abuse of discretion because the character of the area had changed greatly, rendering single-family residential use unsuitable); Kugel v. City of Miami, 206 So.2d 282 (Fla. 3d DCA 1968) (concluding that denial of rezoning request from residential to less restrictive zone constituted a taking of the property where what had been quiet residential area was now surrounded by tall buildings and parking lots). However, as the City correctly points out, the cases holding that a taking has occurred when the government refuses a request to change zoning, even though the character of the land surrounding the affected land has changed dramatically, are distinguishable from this case because, here, the character of the property surrounding the golf course parcel has remained largely the same for decades—it has long been used for single- and multifamily residences. Ocean Palm Golf replies that the changed circumstance on which it is relying is not a change to the surrounding properties, but rather is the change in market and demographic factors: the fact that golf courses across the country are no longer profitable due to the over-construction of golf courses, the aging golf population, and the increased expense involved in operating the golf course. We deem this to be a faulty argument, as it is based on Ocean Palm Golf's failed economic expectations. In effect, Ocean Palm Golf's position is that if a landowner buys a piece of property and the economy later takes a downturn, resulting in the frustration of the landowner's expectations, then the government must act as a guarantor for the landowner's investment after it becomes unprofitable due to, not the zoning regulations, but outside market forces. This is not the purpose of eminent domain law.

Id. at 16-17. I'll leave analysis for others, since the law firm of yours truly was on the case.

Fourth Quarter 2012: 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 fourth quarter of 2012. This is the column that I formerly coauthored. Here are the summaries:

• Town of Longboat Key v. Islandside Property Owners Coalition, LLC, 94 So.3d, 1037 (Fla. 4th DCA 2012). As I discussed in detail previously, In certiorari review, a circuit court is not bound by a local commission’s longstanding interpretation of a local code if that interpretation is unreasonable or erroneous. 
• 19650 NE 18th Ave LLC. v. Presidential Estates Homeowners Ass’n, Inc., - So.3d -, 2012 WL 4448792 (Fla. 3rd DCA 2012). Where a deed of sale violated a county covenant requiring the deed to specify the number of units a buyer may build on the property, the remaining development rights associated with the property were not forfeited because such a condition was not included in the contract. 
• Garcia v. Andonie, - S. Ct. -, 2012 WL 4666458 (Fla. 2012). The homestead exemption statute’s provision requiring that a property owner reside on the property to be entitled to a homestead property tax exemption violated Florida’s constitutional provision governing the homestead exemption.
• Fla. Dept. of Agriculture and Consumer Services v. Mendez, - So.3d -, 2012 WL 3023214 (Fla. 4th DCA 2012). The statute permitting issuance of writ of execution against Florida departments for judgment in eminent domain actions does not permit issuances of writ of execution against Florida departments in inverse condemnation actions. Further, a constitutional challenge to section 11.066, Florida Statutes, is not ripe for adjudication prior to appropriation proceedings before the Legislature.

As always, if you're interested in previous case law updates, take a look at my past posts for previous cases I've summarized about Florida environmental and land use law.

A Prime Example of Why the U.S. Supreme Court Needs to Throw Out Florida's Misguided Exactions Ruling

You might ask why the U.S. Supreme Court should overturn Koontz v. St Johns River Water Management District, No. 11-1447 (cert. granted Oct. 5, 2012). Look no further than amicus briefs in Florida courts citing to that case's misguided public policy reasoning. Koontz is the exactions case recently accepted by the U.S. Supreme Court that will decide (1) whether  the Nollan-Dolan exactions test applies to exactions other than real property, such as where a permit applicant is required to pay for work; and (2) whether the Nollan-Dolan exactions test applies where a permit is denied because an applicant rejects an exaction.

In Pacetta, LLC v. Ponce Inlet, Case. No. 2010-31696-CICI (Fla. 7th Cir. Apr. 20, 2012), the question was not about an exaction, but about inverse condemnation and a Bert Harris Act claim. The trial court described a shocking Florida takings tale of government abuse and political corruption. The Florida Chapter of the American Planning Association (FAPA) and the Florida League of Cities have filed an amicus brief in the case on appeal. The amici make a number of arguments that should concern property owners. For example, the amici argue that the public's statutory right to participate in the planning process is disenfranchised by the trial court's protection of the landowners' constitutional property rights. Then, the amici ask the court to assume that landowers will be better off if they have to continuously negotiate their projects, using Koontz:

Finally, the lower court's decision that the discussions between Pacetta and the Town's officials created an equitable estoppel has a pernicious and counterproductive result for the relations between local governments and developers. A prudent developer will consult with the local government when preparing a land development proposal, especially if the existing comprehensive plan and land development regulations do not allow the development as a matter of right. A local government, especially its planning and management staff, ordinarily will expect to advise an potential applicant of the regulatory constraints and will advise the potential applicant about perceived improvements to the potential development. The negotiations continue even after an application is filed, especially if the required Town action on the application is a legislative decision, as here, and not a quasi-judicial decision. Jennings v. Dade County, 589 So. 2d 1337, 1340 (Fla. 3d DCA 1991) (lobbyist's ex-parte communications in a quasi-judicial variance proceeding can violate due process). The discussions and negotiations can result in a better result for both the developer and the local government. As recognized in St. Johns River Water Management District v. Koontz, 77 So.3d 1220, 1231 (Fla. 2011), penalizing the local government for such discussions with the threat of financial consequences if the negotiations fail by the time of the final decision injures both sides:

"... agencies will opt to simply deny permits outright without discussion or negotiation rather than risk the crushing costs of litigation. Property owners will have no opportunity to amend their applications or discuss mitigation options because the regulatory entity will be unwilling to subject itself to potential liability. Land development in certain areas of Florida would come to a standstill. We decline to approve a rule of law that would place Florida land-use regulation in such an unduly restrictive position."

The course of the proceedings between the Pacetta entities, the Town staff and individual officials were not actions that Pacetta can reasonably claim to rely upon for purposes of equitable estoppel. Rather, they were the preliminary, non-binding discussions between the parties that were not legislative, final action. 

The amici might be right about the equitable estoppel issue. I've not reviewed the case record. But it seems especially misguided to say that somehow the landowners should have continued working with a local government that was doing everything in its power to thwart the landowners' efforts. In Koontz, the Florida Supreme Court gave no logical or case law justifications for how property owners would be worse off if governments were allowed to extort property, money, and labor from landowners. The Florida Supreme Court even said that the landowners were better off allowing the practice--though ignoring the fact that the case before it was not about the negotiation process, it was about the permit's denial following negotiations. If there were ever a reason for the U.S. Supreme Court to overturn Koontz, the amici's use of that case to support the government in Ponce Inlet is a great one.

In full disclosure, I'm a member of FAPA and actively involved in it. I spoke at its annual conference this summer on agricultural law and policy in Florida. When I was in my graduate planning program, it honored me as "Student Planner of the Year." Nevertheless, briefs advocating in support of such egregious governmental action, and showing such disregard for individual property rights, make me wonder whether I should continue to support the organization.

Will the U.S. Supreme Court Grant Review of Florida's Koontz Case to Clarify Exactions Law?

I've written before about a Florida property owner's request that the U.S. Supreme Court review an exactions decision by the Florida Supreme Court. Readers will recall that in St. Johns River Water Management District v. Koontz, 77 So. 3d 1220 (Fla. 2011), the Florida Supreme Court severely limited exactions law in this state. For the uninitiated, exactions are government requirements to donate something (usually real property) in exchange for a development right or permit. The U.S. Supreme Court requires exactions to meet a pair of conditions, sometimes called the Nollan-Dolan test: First, there must be an “essential nexus” between the exaction and the interest that the exaction is advancing. Nollan v. Cal. Coastal Com., 483 U.S. 825, 837 (1987). Second, there must be a “rough proportionality” in both nature and extent between the exaction and the impact of the proposed development. Dolan v. Tigard, 512 U.S. 374, 391 (2005).

The U.S. Supreme Court has not yet given much more guidance on exactions, and confusion has been the result. The Florida Supreme Court forged its own path, holding that the Nollan-Dolan test only applies to (1) exactions of real property (2) where a permit was actually issued and imposed an exaction. Consequently, in Florida, there are now relatively few restrictions on what a local government can ask for in exchange for a development permit. Other states, like Texas, have seen little distinction between a government asking for real property and asking for personal property (like money). This latter view seems to make the most sense to me: real and personal property are fungible, and both can be used to mitigate development impacts, so why should the government be able to avoid the Takings Clause by asking for personal property?

The District has responded to the Pacific Legal Foundation's petition for certiorari. The brief doesn't seem to be available elsewhere online, so I've posted the District's opposition brief here and below. The District makes a couple of arguments. First, the Supreme Court does not have jurisdiction because of Koontz's reservation of his rights to take claims to federal court later. Second, the District did not exact anything because it never issued a permit or collected an exaction.

These problems do not seem to be insurmountable to the Court in taking the case on. First, Florida's Takings Clause is interpreted coextensively with the federal Takings Clause, so the Court could accept jurisdiction just as it did when a very similar argument was made in the briefing of Stop the Beach Renourishment v. Florida Department of Environmental Protection,130 S. Ct. 2592 (2010). Second, if the District's exaction were unconstitutional and so onerous that the landowner could not continue with its plan (or do anything else), why should it be shielded from liability? In effect, as the trial court seemed to recognize, that may just mean a temporary taking occurred. 

I'll have an article in the American Planning Association's Planning & Law Newsletter soon taking a deeper look at these issues.

First Quarter 2012: Recent Florida Environmental and Land Use Case Law

The Florida Bar's Environmental and Land Use Law Section has posted my column on the environmental and land use cases in Florida that you need to know about in the first quarter of 2012.

• Graves v. Pompano Beach, 74 So. 3d 595 (Fla. 4th DCA 2011), establishing that plat approval does constitute a development order under section 163.3215, Florida Statutes, reversing the court's previous opinion upon rehearing.
• Martin County Conservation Alliance v. Martin County, 73 So. 3d 856 (Fla. 1st DCA 2011), confirming on rehearing sanctions imposed on environmental organizations under section 57.105, Florida Statues, as they were held to have pursued appellate review without any foundation in law or fact.
• St. Johns River Water Mgmt District v. Koontz, 2011 WL 5218306 (Fla. Nov. 2, 2011), declining to recognize an exaction under U.S. Supreme Court precedents Nollan and Dolan because the theory is applicable only to exactions involving real property.
• Venice v. Gwynn, 2011 WL 6934531 (Fla. 2d DCA Dec. 30, 2011), stating that ordinances that do not deprive all or substantially all of a property’s value fail the Penn Central test and thus do not violate the Constitution as uncompensated taking of property.

Take a look at past posts for previous cases I've summarized. As usual, please email me with recent cases that others need to know about.

In Florida, Exactions Limitations Apply Only to Real Property, Not Personal Property

In a recent case, the Florida Supreme Court held that the law of exactions--a part of takings law--only applies to the dedication of real property for public use. St. Johns River Water Mgmt. Dist. v. Koontz, No. SC09-713 (Fla. Nov. 3, 2011). This case has important implications for landowners and city planners in Florida.

The Koontz Decision

In Koontz, a landowner requested permits from his local water management district to develop a greater portion of his commercial property than was authorized under existing regulations. The district agreed to grant the permit if the landowner would deed the remainder of the parcel into a conservation easement and pay for offsite mitigation measures unrelated to the landowner's property. The landowner agreed to the easement term but rejected the offsite mitigation. Consequently, the district denied the permit. The landowner sued, alleging a taking. After more than a dozen years in the Florida courts, the case ended up before the Florida Supreme Court.

The takings clause in the Florida Constitution is more or less equivalent to, or "coextensive" with, the takings clause in the U.S. Constitution. Id. at *2. Therefore, decisions by the U.S. Supreme Court about takings are the law in Florida. The Koontz case implicated two important U.S. Supreme Court decisions: Dolan v. Tigard, 512 U.S. 374, 384 (1994), and Nollan v. California Coastal Commission, 483 U.S. 825, 831-32 (1987). In a post at the Land Use Prof Blog on the Koontz decision, Ken Stahl of Chapman University provided background on Nollan and Dolan:

Some brief background on Nollan and Dolan for those who are not takings geeks: Taken together, the [they] hold that when a regulatory entity demands a condition in exchange for authorizing a use of land that would otherwise be prohibited (known as an "exaction") the condition imposed must have an "essential nexus" with (Nollan) and "rough proportionality" to (Dolan) some anticipated impact of the proposed use of land. Both Nollan and Dolan involved situations where the regulatory authority demanded the landowner physically dedicate some portion of his or her land for public use, and the Court in both cases emphasized that the condition demanded by the regulatory authority required the landowner to forfeit the sacrosanct "right to exclude." As a result, many commentators believed that Nollan and Dolan were limited to circumstances where the "exaction" was a requirement that real property be dedicated for public use, and did not extend, for example, to requirements that landowners pay an "impact fee" or other type of monetary payment in exchange for development permission. 

That interpretation, however, was rejected by one of the most significant lower court decisions to date dealing with Nollan and Dolan, the California Supreme Court's ruling in Ehrlich v. City of Culver City, 911 P.2d 429 (Cal. 1996). There, the court held that Nollan and Dolan did apply to certain types of impact fees, specifically fees imposed on a discretionary, individualized basis. The court emphasized what it saw as the underlying policy rationale of the Nollan/Dolan doctrine, to prevent regulatory authorities from using their monopoly power over the land use permitting process to extort concessions from politically powerless developers. This policy concern, the court noted, would apply equally regardless of whether the exaction was a physical dedication or an impact fee.

After a relatively brief analysis, the Florida Supreme Court concluded that Nollan and Dolan only apply to physical dedications of real property because (1) those cases only involved physical dedications and (2) regulatory agencies would by hamstrung and would likely deny more permits rather than face the uncertainty of negotiations.

The Implications

In the near future, this means that the protections of exactions law do not apply when governments and agencies request personal property, rather than real property, as a condition preceding development. As Robert Thomas pointed out in his blog, Inverse Condemnation, exactions are an important and topical issue these days.

The U.S. Supreme Court recently declined certiorari review of an Oregon case, where a city required a developer to pay money and for infrastructure costs. The developer wanted the city's requirements to be subject to the heightened standard of review set out by the U.S. Supreme Court in Nollan and Dolan. Although there were arguments that Oregon law supported the developer's position, after the case bounced into and out of the federal courts, the Oregon Supreme Court ruled otherwise in its West Linn decision. Just before Supreme Court of the United States denied certiorari, the developer filed a supplemental brief pointing out the Koontz decision here in Florida:

The Florida Supreme Court's decision in Koontz underscores the importance of the issue posed by the petition in this case. Moreover, it demonstrates the deepening divide between the courts such as the Supreme Courts of California and Texas which perceive no principled reason to distinguish between disproportional exactions of personal as opposed to real property and those Courts such as the Supreme Courts of Oregon and Florida, as well as the Ninth Circuit, that erroneously perceive in this Court's decision in Lingle an unstated intent to limit Nollan and Dolan. Only this Court can decide this important conflict and bring clarity to this area of Constitutional law.

The supplemental brief points to the heart of the matter: why should there be any distinction between exactions of personal property and exactions of real property? Unfortunately, because case was denied, we'll have to wait for the U.S. Supreme Court to clarify whether exactions law extends to personal property, as well as real property. Here in Florida, a motion for rehearing was filed on November 18 in the Koontz case. While rarely granted, a rehearing would give the Florida Supreme Court a chance to clarify its decision, which commentators have already said lacks clarity.

St. Pete Beach intervenes in Constitutional Challenge to Community Planning Act

Another city has piled onto Yankeetown's constitutional challenge to the Community Planning Act (HB 7207, signed into law as ch. 2011-139, Laws of Fla.). Recall that Yankeetown challenged the Community Planning Act on grounds that it unconstitutionally delegates power to the State Land Planning Agency to define certain terms. Yankeetown also challenged the Act for more technical reasons, including that it was adopted in contravention of the single subject requirement and that it was read by a misleading and inaccurate title.

The twist is that the new local government has moved to intervene as a defendant. In late August, St. Pete Beach moved to intervene in Yankeetown v. DCA (37 2011 CA 002036). If its motion succeeds, it will enter the case aligned with the State Land Planning Agency and possibly the State. St. Pete Beach would then be opposed to Yankeetown. In this case, St. Pete Beach claims an interest in the action through an adopted plan amendment that would be uncertain if the act were struck down. Section 76 of the Act states:

A comprehensive plan amendment adopted pursuant to s. 163.32465, Florida Statutes, subject to voter referendum by local charter, and found in compliance before the effective date of this act, may be readopted by ordinance, shall become effective upon approval by the local government, and is not subject to review or challenge pursuant to the provisions of s. 163.32465 or s. 163.3184, Florida Statutes.

St. Pete Beach's motion to intervene doesn't tip its hand beyond showing the city is clearly interested in the outcome of the case. However, the backstory hints at the city's intentions. St. Pete Beach, readers will remember, formerly had a referendum requirement similar to sought by advocates of Hometown Democracy. It's now embroiled in even more lawsuits - the most recent seeks to overturn the city's referendum that eliminated its comprehensive plan referenda requirement and to overturn the city's reinstatement of a comprehensive plan that was invalidated by a circuit court judge.

We should see more filings in the case soon.

Yankeetown Files Complaint to Declare Community Planning Act Unconstitutional

Well, that didn't take long.

Tiny Yankeetown, with a population of less than a 1,000, has challenged HB 7207, this session's landmark growth management overhaul. I've written several times about the Community Planning Act. The Second Judicial Circuit has labeled the case as high profile, which means the docket is available online. I'll be following it to provide updates to all who are interested. Yankeetown filed an expedited complaint on August 1st and an amended complaint on August 8th.

In Yankeetown v. DCA (37 2011 CA 002036), Yankeetown requests that HB 7207 (ch. 2011-139, Laws of Fla.), be declared unconstitutional because it:

1. contains more than one subject, was adopted in violation of the single subject rule, and was read by a misleading and inaccurate title; and because it
2. contains an unconstitutional delegation, in violation of the non-delegation doctrine, to the State Land Planning Agency to define the vague terms "important state resources and facilities" and "important regional resources and facilities."

Yankeetown also seeks a declaratory judgment that it still apply its referenda provisions, requiring voters to approve all comprensive land use changes affecting more than five parcels. because they existed before HB 7207 was passed. The amended complaint adds allegations concerning the title of the bill and whether it was enacted properly.

Because HB 7207 went into effect upon being signed by Governor Scott in early June, local governments around Florida had to learn its provisions quickly. They must continue implementing the Community Planning Act, despite this challenge. If Yankeetown is successful, Florida land use and growth management law could get very messy, very quickly.