Property Rights at Stake This Week: Should Property Rights Depend on the Importance of the Public Interest?

Last week, I previewed the property rights case to be argued this week before the U.S. Supreme Court. Arkansas Game & Fish Commission v. United States, No. 11-597 (cert. granted Apr. 2, 2012). I focused on the legal arguments in the case, which seeks payment for the extensive timber that was destroyed when the Army Corps of Engineers flooded the Commission's property. Lawrence Hurley has written a great article giving a feel for just how important this case is at the local level. The article also explains the property rights at stake and the implications of the case:

The case could have implications beyond the narrow question of Army Corps-directed water discharges. Those keen for the Supreme Court to become more active in the property rights area, like Jonathan Adler, a law professor at Case Western Reserve University School of Law, certainly hope so. "We don't see many property rights cases," he said. "The language of the opinion will really matter." 

Others are wary of the Supreme Court expanding the definition of what constitutes a taking. John Echeverria, a professor at Vermont Law School, is concerned that any kind of ruling in favor of Arkansas could have "enormous implications" for local governments. 

Although the federal government is the defendant in the case before the court, local governments are far more likely to be on the receiving end of such claims if the Supreme Court endorses the practice, Echeverria wrote in a brief in support of the Army Corps filed by the International Municipal Lawyers Association and other local government groups. 

In an interview, Echeverria said property rights advocates would be keen for a broad ruling on "temporary takings" that could prompt challenges to such activities as government inspections of property. "This is one front of a multifaceted debate over property rights," he added. "The property rights advocates see it as an opportunity to expand the doctrine."

Professor Echeverria is well known for having never seen a property rights claim that amounted to a taking. He supported the State of Florida before the U.S. Supreme Court in Stop the Beach Renourishment, Inc v. Florida Dept. of Environmental Protection, 130 S. Ct. 2592 (2010). In that case, I worked for counsel of record in representing the property owners after the Florida Supreme Court rewrote its waterfront property law. 

In this case, Professor Echeverria "urge[s] the Court to avoid an interpretation of the Takings Clause that would impose unreasonable new burdens on local governments charged with addressing flooding threats and other serious water management challenges":

The facts of this relatively unique case have the potential to obscure the particular threats to local governments posed by the arguments of Petitioner and its  amici curiae for extending physical takings octrine to temporary occupations or invasions. In a variety of contexts, for a variety of important public purposes, government officials intentionally or inadvertently cause temporary or occasional physical invasions of private property. Exposing local taxpayers to potential financial liability under the Takings Clause for all such incidental injuries to property would impose significant  new financial burdens on already straitened local governments as well as impede important government functions. In other words, in the context of  temporary invasions or occupations, as much as with regulatory restrictions, “government hardly could go on” if it could be held liable under the Takings Clause every time it acted. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922). 

Of most immediate concern, Petitioner’s proposed takings theory would seriously undermine the ability of local governments to address a host of local water management issues. Managing the flow of storm water, sewage and other forms of water is one of the most important and difficult functions of local government.

Professor Echeverria seems to miss the point of constitutional protection of property rights entirely. As is always the case in property rights disputes, there are many competing interests at stake here. The interests of farmers and others that the Army Corps was working towards when it flooded the Commission's property are certainly important, as were the more general interests of the public in being protected from flooding. That makes this case all the more compelling: property rights must be respected, no matter how compelling the public interest is. Any other rule cheapens the freedoms we've worked so diligently for in this country.

Local Government's Longstanding Land Development Code Interpretation Cannot Trump Code's Unambiguous Language

The 2d DCA recently held that a local government's longstanding interpretation of its land development code cannot trump the code's unambiguous language. In Longboat Key v. Islandside Prop. Owners Coal., LLC, - So. 3d -, 37 Fla. L. Weekly D2058 (Fla. 2d DCA 2012), the Town approved a $400 million redevelopment plan for the Longboat Key Club. Several community organizations asked the circuit court to review the Town's decision. The circuit court found that the Town violated multiple provisions of its land development code in approving the redevelopment plan. Consequently, it struck down the Town's ordinance approving the plan.

Upon reviewing the case, the 2d DCA agreed with the circuit court. (In legalese, the circuit court granted a writ of certiorari and quashed the ordinance; the 2d DCA denied a second-tier writ of certiorari.) Because of the court's strongly worded opinion, Town officials are getting a lot of grief over their approval of the redevelopment plan and their subsequent litigation over it. The 2d DCA discussed the local government's failure to follow its own rules:

The Town argues that the Code is ambiguous, thus requiring the circuit court to defer to the Town's reasonable interpretation. See Fla. Hosp. v. Agency for Health Care Admin., 823 So.2d 844, 848 (Fla. 1st DCA 2002) (holding that an agency's interpretation is afforded deference by the court unless the plain language of the ordinance runs contrary to the agency's interpretation). In support of this argument, the Town cites its longstanding tradition allowing similar nonresidential developments. Vanderbilt Shores Condominium Association v. Collier County, 891 So.2d 583, 584 (Fla. 2d DCA 2004), blunts that attack. Tradition cannot displace the plain meaning of a local code.

          ***

The Town's longstanding interpretation of its Code cannot tie the circuit court's hands. To allow such a result would countenance a shifting-sands approach to Code construction that would deny meaningful judicial review of local quasi-judicial decisions. The meaning of a code would remain in flux. Such an approach does not promote consistency in the application of law. As the wording of its laws binds a legislature, the Town is bound by the wording of its Code. This mounts a bulwark against the Town's unfettered exercise of power. See Bd. of Cnty. Comm'rs of Brevard Cnty. v. Snyder, 627 So.2d 469, 474 (Fla.1993) (noting that local governments and agencies must strictly adhere to town development plans and zoning codes); City of Miami v. Rosen, 151 Fla. 677, 10 So.2d 307, 309 (1942) (discussing the limited scope of authority under which municipal ordinances are valid); Ocean's Edge Dev. Corp. v. Town of Juno Beach, 430 So.2d 472, 474–75 (Fla. 4th DCA 1983) (determining that courts cannot amend local ordinances “as the town would have liked it to read” by ignoring the language of the code “in favor of after-the-fact expert testimony as to legislative intent to fill in the cracks” because property owners and residents have every right to depend on the wording of the code.) As the circuit court noted, the Town is free to amend the Code. See Carroll v. City of Miami Beach, 198 So.2d 643, 645 (Fla. 3d DCA 1967) (“[T]he City is bound by the express terms of its own ordinance.... If the City desires a different meaning for its ordinance in the future, it may amend, modify, or change the same by legislative process.”).

The 2d DCA's message is clear: local governments must follow their own rules in their land development codes. If they do not like them, they can legislatively amend the rules. They cannot, however, simply interpret clear rules unreasonably. If the rules are unclear (or become unclear when a new situation arises), then local governments can interpret their rules to address the uncertainty.

Takings Case to Watch before the U.S. Supreme Court: Arkansas Game & Fish Commission v. United States

Next week, on October 3d, the U.S. Supreme Court will hear an important case for property rights: Arkansas Game & Fish Commission v. United States, No. 11-597 (cert. granted Apr. 2, 2012). Property owners should be concerned about this case because it could affect their investment decisions, especially investments related to natural resources. If the decision below stands, landowners will oftentimes be uncertain of whether they deserve compensation when the government floods their property.

In this case, the Federal Circuit Court of Appeals, which reviews takings claims against the federal government, held that the flooding of private land cannot be a taking. The only exception is where the government intends for the flooding to be a permanently recur on the property. The Federal Circuit held that courts should not look at the damages caused by the flooding or the time it lasted, but rather on the character of the policy behind the intrusion. The Federal Circuit then held that each flooding instance was merely a temporary policy not subject to review. Consequently, the Commission could not recover for the timber that the federal government killed by flooding.

The Legal Information Institute at Cornell has published a concise summary of the case:

The Arkansas Game and Fish Commission (“the Commission”) is an agency that works to regulate and preserve Wildlife Management Areas in Arkansas. One of the areas that the Commission manages (the “Management Area”) is a bottomland hardwood forest in the Upper Mississippi Alluvial Valley, home to diverse wildlife and hardwood timber species. The Black River runs through the Management Area. One way that the Commission regulates the Management Area is by harvesting timber in the area and then planting new trees. The Commission also controls the flooding of multiple reservoirs in the Management Area to improve the habitat for migratory waterfowl. 

On March 18, 2005, the Commission filed a lawsuit in the Court of Federal Claims against the United States claiming that from 1993 through 2000, the United States effectuated a taking of the Commission’s property and failed to provide compensation. The Commission argued that during those years, the United States Army Corps of Engineers (“the Corps”), deviated from the Corps’ 1953 water control plan for the Clear Water Dam, which regulates the flow of the Black River. The Commission claims that the deviations caused increased flooding in the Management Area, which devastated the timber in the region. The Corps deviated from the 1953 water control plan to help farmers near the Management Area. 

In December 2008, the Court of Federal Claims conducted a hearing concerning the Commission’s lawsuit. At the hearing, the United States argued that the flooding in the Management Area was temporary and therefore did not constitute a taking. The Court of Federal Claims rejected the United States’ argument and awarded the Commission $5.5 million for the damage resulting from the flooding and $176,428.34 to regenerate the Management Area. The United States appealed to the Court of Appeals for the Federal Circuit (“Court of Appeals”), arguing that a taking had not occurred and the Commission cross-appealed, requesting more funds for regeneration. The Court of Appeals ruled in favor of the United States and then denied the Commission’s petition for a rehearing. On April 2, 2012, the Supreme Court of the United States granted the Commission certiorari to consider whether flooding has to be permanent to constitute a taking under theTakings Clause of the Fifth Amendment. On August 16, 2012, the Commission rejected a $13 million settlement offer from the United States because the United States refused to agree that the Corps would not increase the flooding in the Management Area again.

One interesting aspect of this case is that it has not pitted environmental interests against property rights, as is often the case. Jonathan Adler has gone so far as to call it "A Takings Claim Even Environmentalists Could Love." For more in-depth reading, here are the briefs in the case. You might also check out Robert Thomas's excellent blog, where Robert has discussed the case in depth along with the amicus brief that he filed supporting the property owner.

I'll prove updates in the coming weeks once reports from oral argument at the Supreme Court come in.

United States Files Brief Supporting Forest Landowners in Forest Roads Litigation

Along with the petitioners' briefs filed earlier this month in the forest roads case before the U.S. Supreme Court were numerous amici briefs. Groups as diverse as agriculture interests, home builders, environmental organizations, and law professors filed briefs as friends of the Court in Decker v. NEDC and Georgia-Pacific West, Inc. v. NEDC. The one to watch is the well-researched brief by the United States.

Recall that the U.S. Solicitor General previously recommended that the U.S. Supreme Court not hear the case, mostly arguing that there was no reason for the Court to act because both EPA and Congress were moving expeditiously toward a solution. Now the Court has accepted the case, however, the United States is arguing in support of forest landowners. 

Here's the U.S. Solicitor General's summary of its brief:

I. The courts below properly exercised jurisdiction over this action pursuant to the CWA’s citizen-suit provision. Because the EPA regulations relevant to this case (the Silvicultural Rule and the Phase I industrial stormwater regulation) could have been challenged in a court of appeals under 33 U.S.C. 1369(b) at the time they were promulgated, they are not subject to judicial review in this citizen suit brought under 33 U.S.C. 1365(a). The court of appeals did not declare either of those rules invalid, however, but rather rejected the interpretations of those rules set forth in the overnment’s amicus brief. Although the court should have deferred to EPA’s reasonable construction of its own rules, it did not err in entertaining this citizen enforcement suit.

II. The court of appeals misinterpreted both of the EPA regulations at issue in this case. Properly construed, each of those rules independently dictates the conclusion that NPDES permits are not required for the discharges at issue.

A. EPA’s construction of its own rule is “controlling” unless that construction is “plainly erroneous or inconsistent with the regulation.” Auer v. Robbins, 519 U.S. 452, 461 (1997). That principle applies even where, as here, the court is precluded from determining whether the regulation so construed is consistent with the governing statute. See Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 418-419 (1945).

B. The CWA requires NPDES permits for stormwater discharges “associated with industrial activity,” 33 U.S.C. 1342(p)(2)(B), but the Act does not define that term. EPA has construed its Phase I industrial stormwater regulation not to require such permits for stormwater discharges from logging roads. That position reflects a reasonable construction of the regulation’s text. The Phase I regulation refers to discharges from “[f]acilities classified as Standard Industrial Classification[] 24,” which include logging establishments. 40 C.F.R. 122.26(b)(14)(ii). EPA has construed that reference, however, as encompassing only discharges from the four subcategories of silvicultural facilities it had already identified as point sources in the Silvicultural Rule, which do not include runoff from logging roads. Because the stormwater discharges at issue in this case are not covered by EPA’s Phase I regulations, the judgment of the court of appeals should be reversed, without regard to whether those discharges are “point source” discharges under the Act and the Silvicultural Rule.

C. Because the Phase I regulation (properly construed) provides a sound basis for concluding that petitioners were not required to obtain NPDES permits, the Court need not determine whether the Silvicultural Rule also compels the same result. If the Court reaches the issue, however, it should sustain EPA’s interpretation of the Silvicultural Rule, under which no permit is required for “natural runoff ” from logging roads. The stormwater discharges at issue here do not implicate any of the four types of silvicultural facilities (“rock crushing, gravel washing, log sorting, [and] log storage facilities”) that the rule specifically identifies as “[s]ilvicultural point source[s].” 40 C.F.R. 122.27(b)(1). And while the Silvicultural Rule does not state explicitly whether its reference to “natural runoff ” includes systematically channeled runoff, EPA’s resolution of that ambiguity is entitled to judicial deference under Auer.

The court of appeals rejected EPA’s reading on the ground that it would render the Silvicultural Rule inconsistent with the CWA’s definition of “point source.” Seminole Rock, however, precludes that sort of inquiry under the circumstances presented here because EPA’s interpretation of its Rule is controlling. In any event, the CWA’s definition of “point source,” 33 U.S.C. 1362(14), affords EPA “room here for some exclusion by interpretation,” particularly with respect to silvicultural sources. NRDC v. Costle, 568 F.2d 1369, 1377 (D.C. Cir. 1977).

Join Me This Week for a Discussion about Agriculture, Planning, & Policy

Join me on Thursday of this week in Naples at the Florida Chapter of the American Planning Association's annual conference. I'll be moderating a panel discussion entitled "Agriculture Law & Policy in Florida: What Planners Need to Know." Here's the excerpt from the conference brochure:

Though the economy has slowed, growth pressures continue, while the local food and small farms movements gather steam. Planners are working to understand and address these issues. But agriculture is different. From agricultural enclaves under growth management law, to the Right to Farm Act, to the numerous preemptions against regulation by local government, Florida law and policymakers treat agriculture differently. After discussing the laws that planners should be aware of, the panelists with discuss the challenges, pitfalls, and opportunities that agriculture presents. Special emphasis will be placed on agriculture at the rural-urban fringe.

We have a great panel put together to discuss the issues that the planning community needs to know about. Here are the biographies for our panelists:

Robert Halman is the Collier County University Extension Director and Agricultural Agent with 26 years of extension experience providing timely, relevant programming for small farm operators and agribusiness enterprises. His focus is on sustainable agricultural enterprises, farm agrosecurity, emergency preparedness, and thriving communities. The agricultural program involves one-on-one consultations, farm visits, topical programming and facilitating community civic engagements. Robert has a B.S. in Dairy Science, a M.Ag. in Dairy Science, a M.S. in Food and Agricultural Science.

Phil Leary is a City Commissioner in Palatka. Previously, Phil served as the Planning Director for Clay and Putnam Counties and as Director of Government & Community Affairs for the Florida Farm Bureau Federation, the largest general farm membership organization in the state of Florida. While there, he represented Farm Bureau policy positions on local government land use, growth management, and environmental regulation. Phil continues his work on these issues at his government consulting firm. Phil received a B.S. in Agriculture from UF and completed post graduate work in Public Administration, Policy, and Planning at UNF.

Pat Steed is the Executive Director of the Central Florida Regional Planning Council. She has served as Planning Director for Polk County and the City of Lakeland, the MPO Coordinator, and as a Project Director for a national consulting firm. Pat has served on statewide committees, including DCA’s Rural Land Stewardship Advisory Committee. Currently, Pat is managing the Heartland 2060 visioning effort and development of a Regional Plan for Sustainable Development, which covers over half of Florida’s productive agricultural land. These efforts recognize the importance of viable agri-business for economic sustainability, including alternative crops and biofuels.

Joseph Gocsik received his Bachelor of Science in Natural Resources from The Ohio State University in 1996. In 1997 Joseph was hired as the Timber Forester for the 150,000 acre Withlacoochee State Forest where he was able to learn the “hands on” history of management practices in Florida and was introduced to the majority of habitats that currently exist. After serving the public for 2 ½ years Joseph chose to join a private forestry consulting firm in 2000 and served as a senior consulting forester and eventual division manager until January of 2008. In February of 2008 Joseph created Forest Environmental Solutions, LLC “FES” in hopes of better serving client needs, while providing them the best management services possible.

Jake Cremer is a fifth generation owner of timberlands in Florida, and he grew up working in his family’s timber operations. He served the Department of Community Affairs as a Gubernatorial Fellow and has received FAPA’s Outstanding Student Planner Award. Currently, he represents landowners in interactions with government at Bricklemyer Smolker & Bolves in Tampa. He assisted in the defense of property rights before the U.S. Supreme Court in the controversial Stop the Beach Renourishment case. Jake received a BA in Economics & Business from Rhodes College. He holds a JD and MSP in urban and regional planning with a certificate in real estate development from FSU.

Property Owner Argues Florida Supreme Court Significantly Limits Protections Outlined by U.S. Supreme Court

Last month, I reviewed the arguments being made in the Koontz case, which the U.S. Supreme Court is considering whether to review. In that case, a landowner sued after being denied a permit when he refused to fund improvements miles away from his property on land owned by the agency issuing the permit. The Florida Supreme Court declined to recognize an exaction, holding that U.S. Supreme Court precedent on exactions only applies to real property where a permit was actually issued and the exaction imposed.

The petitioner has filed a brief in reply to last month's opposition brief from the St. Johns River Water Management District. In its opposition brief, the District had argued that the U.S. Supreme Court did not have jurisdiction to hear the case because the petitioner did not initially allege a federal takings claim, and that even if it did, there was no important question of federal law to be answered.

The Pacific Legal Foundation does a good job in keeping its brief concise and avoiding getting bogged down in the details. On the first point, the petitioner argues:

The Opposition, however, insists that this Court does not have jurisdiction over a state court’s determination of federal constitutional law because the complaint alleged only a violation of the state constitution. The District is wrong. For the purpose of establishing this Court’s jurisdiction, it is irrelevant when a federal claim was raised in the proceedings below so long as the state court of last resort did, in fact, rule on the federal question. It is enough that the state court “reached and decided” the federal constitutional questions.

The petitioner further argues that the federal question reached and decided by the Florida Supreme Court is an important one because:

The Florida Supreme Court adopted two per se rules of federal takings law that significantly limit the protections guaranteed by Nollan and  Dolan. First, the court concluded that, as a matter of law, the nexus and proportionality tests will never apply to an excessive exaction of money or any other non-real property. And second, the court held that Nollan and Dolan will not apply where the government denies a permit application because the landowner refuses to accede to an excessive exaction. Each of these rulings raises “an important question of federal law that has not been, but should be, settled by this Court.” In addition, the Florida court’s resolution of these questions conflicts with decisions of this Court, and conflicts with decisions from other state courts of last resort and federal courts of appeals.

The U.S. Supreme Court docket shows that the Court will decide whether the hear this case during its September 24th conference.

Forest Roads Update: Opening Briefs Filed in U.S. Supreme Court, EPA Publishes Proposed Rule

One Step Closer to Review of Forest Roads Decision

The State of Oregon and the industry group of petitioners have filed their merits briefs in the forest roads case that the U.S. Supreme Court will hear this term. As readers of this blog will know, the U.S. Supreme Court consolidated two petitions for certiorari into one case because they were based on the same Ninth Circuit ruling. Since then, it's clear the petitioners have been hard at work, since both present much clearer questions to the Court. The briefs are posted below.

The industry group of petitioners states the question it presents:

Whether the Ninth Circuit should have deferred to EPA’s long-standing position that channeled runoff from forest roads does not require a permit, and erred when it mandated that EPA regulate such runoff as industrial stormwater subject to NPDES.

The State of Oregon states the questions it presents:

(1) Congress authorized citizens dissatisfied with the Environmental Protection Agency’s rules implementing the Clean Water Act’s permitting program to seek judicial review of those rules in the courts of appeal. Congress further specified that those rules could not be challenged in any civil or criminal enforcement proceeding. Did the Ninth Circuit err when it held that a citizen may bypass the exclusive method of seeking judicial review of a permitting rule, and challenge the validity of the rule in a citizen suit to enforce the Clean Water Act against regulated parties?

(2) In the Clean Water Act, Congress required permits for stormwater discharges “associated with industrial activity,” and delegated to EPA the responsibility to determine what activities qualified as “industrial” for purposes of requiring permits for those activities. EPA determined, after public comment and rulemaking, that stormwater from forest roads and other specified forestry activities is non-industrial stormwater that does not require a permit. Did the Ninth Circuit err when it held that stormwater from forest roads is industrial stormwater under the Clean Water Act and EPA’s rules, contrary to EPA’s consistent interpretation of its own rules?

The theme behind both opening merits briefs is clear: the Ninth Circuit allowed an environmental organization to make an end run around around the Clean Water Act's when the Ninth Circuit struck down EPA's longstanding Silvicultural Rule. The Clean Water Act separates the rule development process from the citizen lawsuit enforcement process, and the Ninth Circuit conflated the two processes. Consequently, the petitioners argue that the Ninth Circuit should have barred the belated challenge, or at the least have deferred to EPA's consistent interpretation of the Act and its rules.

EPA's Rulemaking Remains Related But Distinct Avenue for Relief

These briefs come just after EPA proposed revisions to its Clean Water Act rules for logging roads. The National Alliance of Forest Owners has posted an excellent summary of how these issues are related but will likely remain separate until we get a ruling from the U.S. Supreme Court.:

Will the U.S. Environmental Protection Agency’s (EPA) recently announced proposed rule regarding forest roads impact the Supreme Court’s review of the decision by the U.S. Court of Appeals for the Ninth Circuit? The simple answer is no. 

EPA has proposed to clarify its regulations defining “stormwater discharges associated with industrial activity” by revising its reference to Standard Industrial Classification (SIC) 24 to exclude logging. SIC codes were developed in the 1930’s as a uniform way to collect statistics. For reasons never explained, the Department of Labor many years ago included logging in SIC 24 with various solid wood manufacturing classifications, rather than in SIC 08 with the forestry classifications. The proposed rule does not remove the language excluding logging from the industrial activity definition which EPA put in its original 1990 stormwater regulations but which the Ninth Circuit ignored when it ruled that logging is an industrial activity. 

If this rule were to become final, logging, and “immediate access roads” referred to as logging roads, would not be subject to the mandatory NPDES permit requirement under Phase 1 of the stormwater program for discharges associated with industrial activity. However, this would not change two facts. First, under the Ninth Circuit’s ruling, logging roads would have been classified as part of an industrial activity for the past 22 years and would have required NPDES permits during this period. Second, these logging roads, as well as all other forest roads formerly defined as nonpoint sources by the Silvicultural Rule, remain point sources under the Ninth Circuit’s ruling. Finally, the Supreme Court must decide whether the plaintiffs in the case filed the lawsuit at a time and in a court authorized by the Clean Water Act. Thus, the essential issues to the case would remain active before the Supreme Court.

In the short therm, uncertainty remains for forest landowners. These developments indicate, however, that clarity lies ahead.