As you know from our December 2012 blog, the United States Supreme Court found that an Army Corps flooding program, which damaged a hardwood forest managed by the Arkansas Game & Fish Commission, may constitute a taking of private property.  Therefore, the Court upheld the property owner’s inverse condemnation claim, reversed the Fifth Court’s decision and remanded the matter to the Federal Court of Claims to adjudicate constitutional “just compensation.”

The parties have now submitted their briefs on remand.  Our Owners’ Counsel colleague, Robert H. Thomas, Esq. has them available on his blog. Click here for the property owner’s brief, and here for the government’s brief.   The government argues that it “did not take a flowage easement” and “at most, there was a modest, unforeseeable, and incremental increase in flooding.” (Db1).  The property owner argues that the Corp’s induced flooding resulted in “catastrophic mortality” of several different tree species. (Pb8).

We’ll keep you posted.

 

The following quote is attributed to President Ronald Reagan:

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One example of government assistance post-Hurricane Sandy was the removal of an entire house because it was allegedly in the right of way:

Ortley Beach home removed

Well, photographic and video evidence proved that the house was not in the right-of-way, but the State removed and demolished it anyway.

Another example, a local government unit in LBI decided that sand removed from the right-of-way was best deposited on a private property owner’s front yard.  It cost the small homeowner thousands of dollars to remove the sand from his front yard and then the government refused to reimburse the property owner for his removal costs.

Finally, a clear example of government failure can be found in its dune replenishment policy.  In 1999, thirteen years before Sandy struck, the United States Army Corps of Engineers came up with a plan to protect all private property owners from a tidal surge.  That plan was not fully implemented before October 29, 2012.  Part of the problem is that plan implementation was left up to local government, and various local government agencies had varied levels of interest, participation, and results with the plan.

Now, those local politicians are looking for a scapegoat.  Private citizens who happen to own beachfront property are in the cross-hairs.  The politicians have cried foul because of the property owner’s refusal to give-up their private property for the public good and the news agencies have trumpeted the cries almost on a daily basis:

NJ.com today – Tom’s River Homeowners Slow to Give Up Land Needed to Rebuild Protective Dunes;

NJ.com Dec. 2, 2012 – N.J. Shore Towns Near Showdown With Dune-Building Foes.

In mid-December, the Town of Mantoloking wrote to all beach-front property owner demanding that they donate their property by signing an easement before year’s end  (Merry Christmas!).  This practice has been followed by other municipalities in Monmouth and Ocean Counties, as they rush to build and replenish sand dunes before the next big storm hits.

Two of the most fundamental rights found in the bundle of rights known as “property” are the right to “exclusive possession” and the “right to security” defined as “immunity from expropriation.” (“Expropriation” is a synonym for “eminent domain”). See Denise R Johnson, Reflections on the Bundle of Rights, Vermont Law Review (2007).  Neither of those rights would be honored if the public forced private property owners to donate their property for the public good, i.e. without payment of just compensation.

Ms. Johnson’s article references Lucas v. South Carolina Coast Commission, 505 U.S. 1003 (1992).   That case examined the effect of the State’s adoption of  the Beachfront Management Act in 1988.  The South Carolina legislation created the Coastal Commission to manage its shoreline due to the regularity of hurricane strikes along its barrier islands and shoreline.  The Commission determined that Mr. Lucas, a beachfront property owner, would not be able to build a residence upon his land.  Lucas sued the Commission, and won at the trial level – a jury awarded $1.2 million for the taking, but he ultimately lost in State Court.  The United States Supreme Court reversed, holding “when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good… he has suffered a taking.”

Perhaps our State should look at South Carolina’s Beachfront Management Act as a guide on how to rebuild after Sandy.  Regardless of whether a State or regional commission is created in New Jersey to manage coastal development, a serious, informed analysis of the issues and possible solutions must be undertaken on a statewide level, rather than continuing a piecemeal, hodgepodge and hurried set of “band-aid” responses.

We questioned the wisdom of the continuing these past practices which have proven problematic at best in our recent Op-Ed in the Asbury Park Press (“Don’t Vilify the Greedy“).  While legislators have recently suggested various “solutions”, unfortunately the pressures of getting the Jersey Shore “ready” for this coming summer is apparently standing in the way of a better, sustainable plan for coastal development which Sandy has given us an opportunity to create.

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Photo courtesy:  www.agfc.com

Today, the United States Supreme Court issued its unanimous decision in the case of Arkansas Game and Fish Commission v. United States (No.11-597).  The Court concluded in a ruling favorable to the property owner “that recurrent floodings, even if of finite duration, are not categorically exempt from Takings Clause liability.” (Slip op. at 2).

Plaintiff, Arkansas Game and Fish Commission owns 23,000 acres of land in northeast Arkansas along the banks of the Black River.  The property is “forested with multiple hardwood timber species that support a variety of wildlife habitats.”  Defendant, United States, owns the Clearwater Dam located about 115 miles upstream of the property.  The dam is operated by the Army Corps of Engineers.  The Corps’ water release policy is set forth in a Water Control Manual adopted contemporaneous with the construction of the dam in 1948.

In 1993, the Corps approved a deviation from the water release policy.  The property owner objected because the “revised water-release plan adversely impacted the property by inducing annual flooding.”  Nonetheless, the Corps implemented the deviation over the ensuing six years.  In 2005, the property owner sued, claiming that the resultant flooding of its downstream property resulted in a taking of private property without payment of constitutional just compensation as mandated by the Fifth Amendment.

The case was tried in the Federal Court of Claims.  The Court of Claims found that the flooding was foreseeable, and that the property was severely impacted.  The property owner “had been deprived of the customary use of the [property] as a forest and wildlife preserve, as the bottomland hardwood forest turned, over time, into a headwater swamp.”  The Fifth Circuit reversed ruling that the taking had to be permanent in nature to be compensable.

The Supreme Court reversed and remanded.  The Court’s holding was straight-forward and plain:  ”We rule today, simply and only, that government induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection.”  Part of the Court’s decision was based on the long-standing rationale that the “Takings Clause is designed to bar Government from forcing some people to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

The Court summarized its own review of takings clause jurisprudence by noting that “we have rejected the argument that government action must be permanent to qualify as a taking.”   Therefore, “because government-induced flooding can constitute a taking of property, and because a taking need not be permanent to be compensable, our precedent indicates that government-induced flooding of limited duration may be compensable.” (Slip op. at 9).

The impact of this decision is yet unknown but has already been the subject of much media coverage in a matter of hours.  More on this decision is available  from our Owners’ Counsel colleague, Robert Thomas, in his Inverse Condemnation blog post today.

On Friday May 18, 2012, a New Jersey appellate court affirmed – and published – the trial court’s decision in Dock Street Seafood, Inc. v. City of Wildwood, ___ N.J. Super. ___ (Law Div. Docket No. L-17056-06).  Plaintiff/appellant owns a vacant parcel of property located at 600 West Baker Ave in Wildwood, N.J. adjacent to its seafood business property on West Montgomery Avenue.  The Baker Ave property was designated “in need of redevelopment” in 2002.  A redevelopment plan was adopted shortly thereafter, and a redeveloper was named – K. Hovnanian.

The property owner never challenged the in need of redevelopment designation.

At some point thereafter,  K. Hovnanian made an offer to purchase the Baker Avenue property for $660,000.  The offer was rejected.  K. Hovnanian backed out of the deal when the market turned in 2007.

The property owner was interested in developing the property itself, but never submitted an application because City officials consistently stated that they would not permit private development within the redevelopment area.  Therefore, in 2006, the property owner filed a lawsuit alleging that the City’s actions resulted in a “taking” of private property without payment of just compensation, i.e. filed an “inverse condemnation” suit.

A Law Division judge tried the case and dismissed the property owner’s takings claim.  The trial judge reasoned that the property owner failed to exhaust administrative remedies by not filing an application for development before filing the lawsuit.  The property owner argued that such efforts would have been futile given municipal officials’ insistent statements that they would not permit private development within the redevelopment area.

The Appellate Division affirmed based upon the opinion below.

While we have yet to learn whether the owner will be submitting its own development plan to “exhaust” its administrative remedies, this opinion appears to have been made based upon the trial court’s factual determination as to whether the administrative remedy of approvals was really available or, whether (as suggested by the owner) those efforts would have been futile.  Not much in the way of new law, which makes it somewhat surprising that the case was approved for publication, but nonetheless, score one for the municipality in this case.

Today’s Daily Record featured this article by reporter Cara Townsend which highlighted Todd Kuehm, a fourth generation New Jersey farmer, and his fight against the Township of Montville’s use of eminent domain on his 28 acre farm.

Photo Courtesy of Cara Townsend/The Daily Record

The article covers the history of the litigation from the Township adopting ordinances which denied him the ability to install a well despite having permits from the New Jersey Department of Environmental Protection, the entry and dismissal of several injunctions to deny him access to the well, to a recent finding by a New Jersey Superior Court judge that the Township had exceeded its authority and interfered with Mr. Kuehm’s property rights.  The Township later filed an appeal with the New Jersey Appellate Division to challenge the court ruling.

Mr. Kuehm’s story was also recently the subject of Fox News Channel’s “It’s Your Land” series.   The video, featuring McKirdy and Riskin’s Anthony F. Della Pelle, may be viewed here.  Shortly after the TV segment, the Montville Patch also published its own story.

The matter is currently pending on appeal.

For more blog posts on property owners challenging a government’s use of eminent domain, please see the following:

Eminent Domain Abuse Sign is Protected Speech

Jury Awards Double NJ Transit’s Offer for Property Taken by Eminent Domain

Mt Holly Gardens Residents Live to Fight Another Day

Lotta Lettuce J.T.S. Farms, LLC is represented by McKirdy & Riskin, PA as the family’s condemnation counsel.

Ciaglia v West Long Branch – Inverse Remedy Awarded by Appellate Division

Yesterday, the Appellate Division of New Jersey’s Superior Court reversed a trial court that had dismissed a property owner’s lawsuit alleging that West Long Branch’s zoning regulations amounted to an inverse condemnation of an undersized lot created by a subdivision approved by the Planning Board in 1957.  A full text of the decision may be found here.

While the land use, procedural, and ownership history of the lot was very complicated, the appellate court sifted through the municipality’s procedural objections arising from the long history, and found that a regulatory taking had occurred because the Zoning Board of Adjustment’s recent denial of the property owner’s request for a hardship variance meant that the lot had been zoned into inutility.  This decision was made on appeal, even though the trial court had earlier ruled that a prior owner’s assent to a subdivision in the 1950s creating the undersized lot meant that the hardship was “self-created”.  The appellate court focused upon the impact of the local zoning, not events which had occurred more than 50 years earlier.

The Court therefore remanded for entry of judgment requiring the municipality to commence condemnation proceedings to value the land taken by government regulation.

Shock Treatment Insufficient to Constitute Inverse Condemnation

Yesterday, a New Jersey appellate court affirmed a jury verdict awarding $195,000 in “nuisance” damages to a Brick Township couple, but refused to reverse the trial court’s finding that an electric utility company’s stray “neutral to earth” voltage running rampant through their backyard was insufficient to amount to taking. Smith v. Jersey Central Power & Light Company (A-2801-08).  Mr. Smith received his first shock treatment back in 2002 when he attempted to get into his hot tub.  The problem persisted to the point where the couple removed their swimming pool, hot tub, and children’s swing set and abandoned use the back-yard altogether for a period of time.

The jury awarded $145,000 for property damage, and $50,000 for interference with the use of the property. Prejudgment interest and a portion of taxed costs were added to the jury verdict.  Immediately after trial, the property owners installed a new swimming pool. JCP&L moved to set aside the verdict on that fact alone. That motion was denied.

The property owners appealed the dismissal of the takings claim, and the denial of taxed costs, suggesting that the circumstances constituted an inverse condemnation.  JCP&L cross-appealed on the denial of its motion to set aside the verdict and raised several trial errors.  The appellate court affirmed on all counts, specifically rejecting the property owners’ claim that a taking occurred.

The full text of the opinion may be found here.

Local Beach Access Plan Draws Ire of Environmental Groups

Environmental groups voiced concerns through postcards and press conferences over proposed rules they claim would restrict rather than enhance access to New Jersey’s beaches.  A proposed plan would permit local towns to establish access plans that would be reviewed by the State.  The Department of Environmental Protection (DEP) would then be able to reduce funding for open space purchases or assign towns a lower priority if they fail to provide adequate access.  Pro-access groups claim the proposed rules would permit a municipality to exclude the public from accessing beaches in favor of private property owners with beachfront properties.  It is unclear whether the access points would be through existing access or acquired from private property owners.

 Under the public trust doctrine, the state owns and holds lands washed by tidal waters in trust for the general public.  Across the United States, lands and waters which are subject to public trust rights are generally to either the ordinary high water line or the ordinary low water line and the lands lying beneath them.  States mark the boundary for public trust purposes at either the ordinary high water line or at the ordinary low water line.  New Jersey is a “high water” state and it establishes the upland boundary of lands owned by the state at the Mean High Water (MHW) or the mean high tide line.

 To read more about the proposed rule, please see the following newspaper articles:

 Jersey shore fans inundate Christie with mailAssociated Press

 N.J. environmentalists oppose plan to let locals set beach access pointsThe Star-Ledger

 Beach access is state’s jobThe Asbury Park Press

 To read more about beach access and property rights, please see the following blog posts:

 When a Private Beach is Really Not Private

 NJ Supreme Court Rules That Replenished Beach Area is Public Property

 Supreme Court Denies Compensation to Owners in Beach Replenishment

 Dueling Supreme Courts to Decide Beach Replenishment Takings Issues Heard on Same Day

 The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

A New Jersey appellate court recently affirmed a lower court’s dismissal of a civil rights/due process claim by a Somerset County property owner who alleged that it was denied the right to develop its acreage in Millstone Borough over the course of several years where efforts to develop the property were stalled.  Rezem Family Associates v. Borough of Millstone involved a suit by a property owner against the Borough of Millstone that was filed after the property owner sold its 67 acre tract of vacant land to the County of Somerset for open space preservation for $6,850,000.  The property owner alleged that it was forced to sell the property at a substantial loss due to the improper conduct of municipal officials that frustrated development and/or sale of the property over the course of almost a decade prior to the ultimate sale.

The property owner proffered evidence of municipal conduct that the trial court found was sufficient to submit to a jury to decide whether it “shocked the conscience”, but the trial court ultimately dismissed the property owners’ 42 USCA 1983 claim for failure to exhaust available remedies.  The dismissal was affirmed on appeal given the “absence of any attempt to make use of available procedures and remedies, Rezem’s complaint improperly converts a zoning case into civil rights litigation.”   The property owner never filed an application for a development approval or an application for a zoning change, or any other type of formal submission to be acted upon by the municipality.  Such failure was ultimately fatal to the case as the courts found that the claim was not yet ripe for judicial review.

The property owner’s attorneys have indicated that their client is considering whether to appeal to the NJ Supreme Court.

A copy of the appellate court’s opinion is available here.

Also check out Michael Booth’s article on this case in the New Jersey Law Journal.

A New Jersey appeals court recently affirmed the dismissal of an inverse condemnation complaint filed by a property owner against the Township of Mount Laurel, which asserted that a resolution adopted by the Township amounted to a total regulatory taking of his property.  Carroll v. Township of Mt. Laurel, Superior Court of New Jersey, Appellate Division, Docket No. A-5140-09T3.

The resolution in question announced the intention of the municipality to preserve a corridor within which the plaintiff’s property was located for open space.  The township did not amend its Master Plan or zoning ordinance, and did not take any other actions in furtherance of its desire to preserve the property or other property in the corridor, which had zoning in place permitting a variety of commercial and industrial uses.

Prior to pursuing his action in State Superior Court, the plaintiff had filed a regulatory takings complaint in United States District Court, which was dismissed by summary judgment on the basis that the claim was not ripe for adjudication.   The District Court’s summary judgment was affirmed by the U.S. Court of Appeals for the Third Circuit.

The State court action followed.  On appeal, the Appellate Division held that the trial judge was required to follow the dispositions of the federal courts, and affirmed the decision below.

A copy of the Appellate Division’s slip opinion is available here.

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