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Supreme Court's New Property Rights Trilogy:  Koontz, Horne, and Arkansas Game & Fish

 

   

The Supreme Court agreed to hear three takings cases this term, two of which were recently decided, and one that was decided in December 2012.

Koontz v. St. Johns River Water Management District

On June 25, 2013, the Supreme Court of the United States reversed the Florida Supreme Court, and held that the Government cannot condition the issuance of a land-use permit on the owner's giving up a portion of his property unless there is a "nexus" and "rough proportionality" between the Government's demand and the effects of the proposed land use.  Although the Court has long required these conditions be met when the Government approves a permit, in this case no permit had been issued----  the property owner had simply been told that he had to submit an application that complied with the Government's demands. And he refused.

Koontz is a Florida landowner who claimed a taking of his property when the state conditioned a permit for commercial development on his payment for improvements to a government-owned parcel miles away from his property.  Koontz challenged the constitutionality of that condition, claiming that it "violate[d] the essential nexus and rough proportionality tests set out in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994)."  Koontz then refused to accept the permit with the unlawful condition, causing the government to question whether a taking could occur if the permit (even with an unconstitutional condition) was declined. 

The U.S. Supreme Court however reversed the Florida Supreme Court, holding that the way Florida dealt with Koontz's application ran afoul of both Nollan and Dolan:

Those cases reflect an overarching principle, known as the unconstitutional conditions doctrine, that vindicates the Constitution's enumerated rights by preventing the government from coercing people into giving them up. Nollan and Dolan "involve a special application" of this doctrine that protects the Fifth Amendment right to just compensation for property the government takes when owners apply for land-use permits.

Justice Alito commented that these requirements were especially important in the context of regulated land development:

[L]and-use permit applicants are especially vulnerable to the type of coercion that the unconstitutional conditions doctrine prohibits because the government often has broad discretion to deny a permit that is worth far more than the property it would like to take. . . . A second reality of the permitting process is that many proposed land uses threaten to impose costs on the public that dedications of property can offset.

The Court further held that Florida's demand that Koontz develop Government property in exchange for the issuance of the permit violated the Fifth Amendment:

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 cognizable injury.

Horne v. Department of Agriculture

In its second favorable decision in a takings case this term, the U.S. Supreme Court on June 10, 2013 unanimously ruled that federally regulated raisin farmers may file as an affirmative defense takings claims in federal enforcement actions involving the imposition of fines or penalty.

The case, Horne v. Department of Agriculture, involved two raisin farmers who were accused by the Department of Agriculture of failing to comply with the Agricultural Marketing Agreement Act of 1937, which required them to turn over between 30% and 50% of their yearly raisin crop to the Government, free of charge. After the Hornes were charged nearly $700,000 in fines and assessments, they challenged the fines in federal district court based (in part) on the claim that the regulations violated the Fifth Amendment by taking private property without just compensation.
Upcoming Event:



On Monday, July 15, 2013, Law Seminars International will hold an online seminar titled "Horne v. U.S. Department of Agriculture: Practical Implications of the Supreme Court Decision," moderated by Nancie Marzulla. The speakers----Michel McConnell, who argued the case in the Supreme Court for the Hornes, and Roger Pilon, Vice President of Legal Affairs at the Cato Institute----will discuss the June 10, 2013 decision in the U.S. Supreme Court, which approved the use of a Fifth Amendment challenge as an affirmative defense to a federal enforcement action brought to enforce a regulatory fine.

The online seminar will be held from 3-4 p.m. Eastern Time (12-1 p.m. Pacific Time), and is designed for attorneys and policy makers who are involved in federal regulatory permit and enforcement proceedings in which monetary fines or penalties are imposed under comprehensive, federal legislative schemes such as the Agricultural Marketing Act, corporate and banking regulations, or environmental laws such as the Clean Water Act, Clean Air Act, RCRA, and CERCLA.
 
For more information and to register, visit the following link:  www.lawseminars.com 

What People Are Saying About Marzulla Law:

 

"I hope you are successful with this case and that you achieve justice and compensation for the dealers who lost so much in this fiasco. The story has never really been told with the chilling details of the events that unfolded with the bankruptcy of Chrysler. Everyone would be very surprised by the manner in which this was handled. Hardly a day goes by with me trying to understand the president's comment about an equality of sacrifice. Thank you for you and your associates' efforts to make this right."

 

Jim Koehler, President of Scotia Motors, Inc. 

Update on Chrysler Dealers' Takings Claim

In March 2012, we discussed a takings case involving 75 former Chrysler dealerships from around the country who filed a takings suit in the U.S. Court of Federal Claims seeking monetary relief for the loss of their businesses due to the 2009 bankruptcy closings effected per the Troubled Asset Relief Program (TARP). Agreeing with the plaintiffs' argument that the termination of their contracts resulting from the bankruptcy was a taking under the Fifth Amendment, the U.S. Court of Federal Claims denied the Government's motion to dismiss the case, and the Government's motion for reconsideration. The Government filed its opening brief in the Federal Circuit in March 2013 and the dealers filed their responsive brief last month. Oral argument has not yet been scheduled.
The district court held that the Hornes could not use the Just Compensation Clause as a defense against the regulation because all taking claims over $10,000 must be brought in the U.S. Court of Federal Claims under the Tucker Act. The Ninth Circuit affirmed the district court's ruling on appeal, while also holding that the plaintiffs would have to pay the fines to the Government first before it could file a takings claim to get that same money back.

Delivering the opinion on behalf of the Court, Justice Clarence Thomas rejected this senseless procedure, holding that the comprehensive enforcement scheme that the Department of Agriculture claimed applied to the plaintiffs displaced the jurisdiction of the Court of Federal Claims and gave jurisdiction to the district court to hear the taking defense:

In the case of an administrative enforcement proceeding, when a party raises a constitutional defense to an assessed fine, it would make little sense to require the party to pay the fine in one proceeding and then turn around and sue for recovery of that same money in another proceeding. . . . We are therefore satisfied that the petitioners raised a cognizable takings defense and that the Ninth Circuit erred in declining to adjudicate it.

Amici in support of the Hornes included U.S. Chamber of Commerce, the State of Texas, The Cato Institute, National Federation of Independent Business, Center for Constitutional Jurisprudence, Reason Foundation, and Constitutional Law Scholars.

Arkansas Game and Fish Commission v. United States

In December 2012, the Supreme Court rendered a unanimous (8-0) decision in favor of property owners. Marzulla Law submitted an amicus brief in this case and covered the decision in our January 2013 Newsletter. The case was remanded to the Federal Circuit, which has scheduled oral argument for September 6, 2013.

Staff Spotlight: Jeff Wren

Jeff Wren comes to us from the Washington Center's Law and Criminal Justice internship program, and will be interning with us this summer. Having just completed his second year at the University of Cincinnati, Jeff is majoring in Political Science and Philosophy, and minoring in English with a pre-law focus.

Jeff's interest in government and law is evident in both his educational and extra-curricular pursuits. This most recent Spring term he interned at Waycross Community Media in Cincinnati, Ohio, where he learned to cover governmental events through televised media, interviewed state and federal government representatives for public broadcast, and developed his skills in communicating with government professionals. Jeff is also a member of the University of Cincinnati Pre-Law Club, using his participation to prepare for application to law school and gain a better understanding of the field of law.

"I chose to intern at Marzulla law because of how well recognized both Nancie and Roger Marzulla are as litigators," says Jeff. "I knew that accepting an internship here would help me along the road of becoming the best law student that I could possibly be. In order to accomplish great things in life, you need to have ambition and take advantage of opportunity, and that is exactly what I am doing. Working here may not be easy, but I know that this experience will help me make a difference in this world one day."

Among Jeff's interests are reading and discussing political and government books, and music.

Jeff intends on pursuing a law degree and to eventually practice in criminal defense and start a career in politics.

Marzulla Law, LLC is the nation's leading law firm for takings claims against the federal government. ML represents landowners, developers, water districts, Indian tribes, business, and corporate interests in litigation of property rights and contract claims. ML also represents clients in environmental enforcement actions, and litigation involving natural resources and permitting issues, in federal district courts and courts of appeal.

 

We hope that this Newsletter will serve as a resource for you.

 

Best regards,     

Nancie and Roger Marzulla       

Marzulla Law, LLC   

Tel.: 202.822.6760       

www.marzulla.com    

About Marzulla Law 

 

Marzulla Law, LLC is a Washington D.C.-based law firm. Nancie G. Marzulla and Roger J. Marzulla help property owners get paid just compensation when the Government takes their property through inverse condemnation.

 

ML lawyers practice in the federal courts, especially the U.S. Court of Federal Claims, the Federal Circuit Court of Appeals, and the U.S. District Court for District of Columbia, as well as other federal district courts, appellate courts, and the U.S. Supreme Court. ML also represents clients in administrative agencies, such as the Interior Board of Indian Appeals.   

 

Chambers has recognized Marzulla Law as one of the top ten water rights litigation firms in the country. Nancie Marzulla and Roger Marzulla have been selected by their peers to be included on the list of Best Lawyers in America, and their firm has the highest AV-rating from Martindale-Hubble.  Nancie and Roger Marzulla have been recognized by Best Lawyers as a Top Tier law firm by U.S. News & World Report for environmental law, and Marzulla Law is a proud member of the International Network of Boutique Law Firms.