An Insanely Bad Decision from the 11th

On April 11 (sorry, I'm a bit behind), the 11th Circuit issued this opinion in Lewis et al v. Brown, --- F.3d ----, 2005 WL 1159155 . The court not only wrongly (IMHO) applied McKinney v. Pate to hold that land use decisions aren't protected by substantive due process, it actually held that the federal courts could (and clearly would) make their own determinations of whether a state actor's decision was executive as opposed to legislative, regardless of state treatment of the decision.

The case involved the denial of a rezoning. The plaintiffs claimed that the denial violated their substantive due process rights as it was arbitrary and capricious because the requested zoning was consistent with the local comprehensive plan. In its apparent determination to get out of its constitutionally and statutorily mandated role as protectors of civil rights, the court made two convenient but serious errors in law.

First, the court distorted not one, but two doctrines to claim that substantive due process isn't available to executive decisions regarding land use regulation. It first cited McKinney v. Pate and Palko v Connecticut for the true proposition that due process protects fundamental rights, those implicit in a concept of ordered liberty. Of course, that doctrine applies to the determination of when due process applies to the deprivation of LIBERTY, not property.

It then went on to cite the post-Roth "new property" cases - particularly McKinney - for the proposition that due process does not protect "state created rights" but only those created by the constitution, and cites an earlier 11th Circuit case for the proposition that "land use rights like zoning restrictions" fall into that category. So the court basically lumps the right to use and enjoy property - guaranteed by most state constitutions (definitely Florida's) and implied by the Federal Constitution - in with "creature of statute" interests like welfare.

BOSH AND DOUBLE BOSH. Under common law, the right to put land to any lawful use was an essential component of the property right in land. This has been repeatedly and historically held to mean that that any restriction on the right to use land was subject to due process review. That is, one could be "deprived" of the right to use property in a particular way by a regulation, but that due process attached to the regulation AND ITS ADMINISTRATION. Any other view holds that the decision to regulate a use of land removes it from the set of rights in property as opposed to merely regulating it - and I know of no decision that has made that determination and several that hold against it (see Moorman v. DCA, for example).

The critical distinction between due process and takings has been that in determining whether a regulatory taking had occurred, the "whole property" was examined (both in scope and set of uses), but for due process analysis, every limitation on an historic right in land was a "deprivation" subject to due process review. So the rights in land that are regulated by zoning and other land use regulations are "rights" and "property," (not "mere expectancies" or "state created interests") and insofar as the regulation denies or limits them, it must do so subject to due process review, both substantive and procedural.

And the idea that "zoning rights" or "land use" rights are state-created (in the Roth sense) is simply ludicrous. Property rights in land were constitutionally recognized for federal purposes both in the Fifth Amendment and in the Fourteenth. Even if the boundaries of those rights (nuisance law, for example) may be altered by the state, the core CONSTITUTIONAL right to own and use property is one that has always been recognized in real property and even in personal property.

So, the courts completely miss the proper analysis when they look at a permit or other regulatory action and don't look behind it to whether there is an historic right being regulated (deprived). At its root, the post-Roth "new property" cases simply should not be applied when a common law and constitutionally recognized right is being regulated.

This argument obviously needs all the requisite cites and niceties to become a nice Bar Journal or Law Review piece, but it's the consistent representation of our legal history. What's not consistent is the federal courts' activist hostility to protecting our civil rights in property.

Which leads us to the other gross distortion. The court applied the so-called "functional analysis," which looks at the scope of application of a decision, to hold that any land use decision that affects only a single person (or limited group of persons) is executive in nature and therefore falls into the McKinney v. Pate trap. OK folks, the federal court held that for federal analysis, it can declare any land use decision executive on its own, without any resort to state-law analysis. Talk about an activist judiciary!

Under the McKinney analysis, a person subject to an executive decision only gets the procedural due process rights provided by the statute or rule that authorizes the decision. It was designed for use in employment benefits and welfare cases, where the "entitlement" (i.e., the property interest created by the statute) is tied to the processes that create and protect it. Here, there are only the state enabling laws that authorize local governments to regulate land (Georgia's, in this case). So where do the procedural rights come from? I guess the court doesn't care, it didn't bother to point to any source of them.

Bad opinion. Bad precedent, bad analysis, and bad for civil rights. I hope this gets appealed en banc and I hope this gets taken up to the Supremes.

US Supremes Clarify Takings Rules by Limiting Agins' "Substantial Relationship" Test

The US Supreme Court issued its opinion in the first of the three takings cases it will rule on this term. In Lingle v. Chevron, the court was faced with the issue of whether the "substantially advances a legitimate state interest" test, articulated in Agins v City of Tiburon, and repeated in Nollan, Dolan, and more recently in Monterey v. Del Monte Dunes.

In doing so, Justice O'Connor, writing for a unanimous court, seems to have taken a stab at clarifying and categorizing takings law going forward. In this case, the "substantially advances" test had been used to strike down a Hawaiian statute that imposed rent controls on oil-company owned gas stations, because Chevron demonstrated to the satisfaction of the trial judge that the provision did not advance the state's interest in controlling consumer oil prices, and therefore was a taking. The court pretty much rejected the proposition out of hand (calling it "not only doctrinally untenable as a takings test [but also that] its application as such would also present serious practical difficulties."), but only after taking some time to clarify why the analysis here was a substantive due process analysis misplaced into takings claims.

This ruling was somewhat expected, but I think the big news is Justice O'Connor's related analyses. Unsurprisingly, there are three kinds of regulatory takings, and a special case. The first, and most general, is the Penn Central balancing test. The second is the Loretto style invasion, which is a categorical taking. And the third, of course, is the categorical Lucas taking when a regulation takes all economically beneficial use of the property. These three inquiries (as Justice O'Connor called them) "share a common touchstone. Each aims to identify regulatory actions that are functionally equivalent to the classic taking in which government directly expropriates private property or ousts the owner from his domain. Accordingly, each of these tests focuses on the severity of the burden that government imposes upon private property rights."

Three kinds? What about Nollan and Dolan?

In Part III of the opinion, Justice O'Connor takes some pain to clarify Nolan and Dolan, but in doing so raises many questions. These cases, she reasons, "involved Fifth Amendment takings challenges to adjudicative land-use exactions - specifically, government demands that a landowner dedicate an easement allowing public access to her property as a condition of obtaining a building permit." She notes that in both cases, the expropriation of the easement would have been a taking, but goes on to not that Dolan held that "an adjudicative exaction requiring dedication of private property must also be 'roughly proportional' . . . both in nature and extent to the impact of the proposed development." [sorry about the depth-of-quote there - everyone should read this on their own anyway.] She then ties them both back to the unconstitutional conditions theory, characterizing the "problem" as the government's demand that they give up their right to be compensated for the taking of the property in exchange for a "discretionary benefit." [I somehow doubt that her choice to modify the term "exaction" twice with the term "adjudicative" was accidental.]

This leaves us in a pickle as to whether Nollan and Dolan apply a) to ordinances or statutes that set forth exaction requirements and levels (i.e., what makes an exaction adjudicative and when would legislative exactions be covered) or b) when money rather than easements, dedications or other transfers of real property interests are involved. It could be argued that by focusing on the unconstitutional condition aspect, she actually has opened the door wider to argue this in other contexts, but it also could be argued that impact fees have been pulled out of the protection of the takings clause.

What we have here is (perhaps finally) a takings case that will help law professors and land use lawyers alike categorize the substantive takings approaches and when they should be used. By purging the tempting but problematic "substantially advances" test and putting Dolan and Nollan off into the "unconstitutional conditions" corner (rather than being another form of takings analyis), Justice O'Connor has provided some clarity to a longstanding analytical quagmire.

Let's see if the court provides similar procedural simplification when it tackles the San Remo Hotel case.

A Number of Bills Pass Volume 1

In addition to the core growth management bill, a number of growth-related bills passed and will soon be on their way to the Governor. They include:

Waterfront Property HB 955 - would require local government to include provisions in the land use element to protect existing commercial and working waterfront properties.

Wind Protection - HB 835 - provides more guidance on wind protection in the building codes, still exempts the Panhandle except for beaches from more strict provisions of code.

Small Cities Community Development - HB 901 - allows DCA to include "project planning" as a category in which communities can compete for Block Grant funds.

Campus Master Planning - HB 517 - After a really bad start, which would effectively have gutted any ability of anyone to enforce the requirements of the statute and allowed Universities to put anything they want anywhere they want, it looks like this ended up being a really good bill that cleans up the process and allows a proper hearing and a DCA (rather than administration commission) Final Order.

I have to confess special interest in this bill, since I was the first person to actually appeal a final order of the Administration Commission under the old regime - which was simply unworkable. If the procedures in the new bill had been in place when my clients started the process in the case in which I was involved, the ultimate result would have been different, especially on the ground, where it matters most.