A case we'll all be reading for a long time to come - Bert Harris AND takings together!

In another very strange case and opinion, the 5th upheld an inverse condemnation claim against Osceola County, but not against DEP (gosh, they keep getting away with stuff in this court) in a case that involves the application of clearly vague and illegal rules to force a construction and debris (C&D) landfill to cease operating, but not really close. A jury found BOTH inverse condemnation and damages under Bert Harris (after the judge found undue burden) , but the landowners had taken the risk of electing and defending the inverse condemnation award (presumably because it came with better provisions for attorney and expert witness fees). Here's the opinion.

The facts are pretty simple. Best ran a landfill since the 60's. In the early 90's it was made subject to both state permitting requirements from DEP and also to an Osceola County conditional use ordinance. Neighbors complained about odors and DEP and the County acted (both illegally) to deny the landfill the permits it needed to continue operation. Best was also denied (but read the dissent, the two agencies didn't get their acts together to tell Best what it needed to do) the ability to bring in other fill to close the landfill and use it for other purposes.

The complications are twofold. First, on the DEP permit, the agency denied Best a renewed operation permit by creating a non-rule policy just for them that a C&D landfill couldn't create any objectionable odors. It also made a "finding" that the operation of a landfill was a public nuisance - a fact that the court relied on in part on letting them off the hook. That was complete nonsense because an agency doesn't have and can't have the authority to declare anything a "common law" public nuisance -- a clearly judicial function and determination (though an agency can find and enforce rules against nuisances if those are defined by statute or ordinance).

The problem is that, at a certain point, Best dropped the case against the agency and proceeded under the Bert Harris Act and inverse condemnation.

At the same time that the DEP denied the permit, the County denied Best a continuation of its conditional use permit. Best tried a second time and was denied again. Rather than continue in the (very stacked) litigation on this permit, Best went to court on the inverse condemnation and Bert Harris claims.

When it did so, it dismissed its APA appeal of the DEP permit denial and filed an "acceptance of the validity of the action" with a reservation of rights to pursue the Bert Harris and inverse condemnation claims. The County and DEP claimed that the Best's failure to pursue attacks against the validity of the denials precluded the takings and Bert Harris claims.

The County and DEP win in their claim that the denial wasn't a taking because, even if it denied all economic use of the property, the use was a public nuisance based on the agency's finding, and therefore fell under the nuisance exception to Lucas. This is REALLY problematic. Since First English, takings doctrine has recognized that a valid regulation or permit denial can create a taking. Moreover, it should be clear that an agency is without authority to simply determine that something is a "public nuisance," and that a trier of fact in the takings case should be able to reject that determination if it is examining the effect of the agency's action (as both the judge found and the concurrence accepted). The 5th's decision here (but read the concurrence w/regard to Bert Harris rather than inverse condemnation) is a real problem for takings claims.
Despite the loss of the more meaningful part of the case, Best wins against the County on another theory: the County prevented it from closing the landfill by claiming that Best needed a permit from DEP that DEP didn't have and couldn't give. The inability to close the site then precluded any other use and was a taking. The dissent hates the facts with respect to this, but the majority wins.

Note that this is a BAD case for takings and probably a good case for Bert Harris law.

The majority opinion held that the trial court erred in finding a taking based on the effect of the permit denials because the plaintiff didn't continue to attack the "propriety" of those decisions in the administrative forums, but then made it a centerpiece of the taking case. The 5th rejects the idea that denials of permits based on "odors" could be the basis of a taking suit - essentially holding that if a government claims any basis for a denial that might be a "Lucas" exception, you've got to litigate the denial down before you can have a taking. [The facts found by the trial court indicate that these findings were pretextual, not supported by the evidence and really a cover for a political decision.] All of us who practice in this area know that the court's holding here is just an invitation to local government and agency attorneys to draft completely bogus "nuisance" findings into their denials [even if they are not authorized by any rule, statute or ordinnce], because the 5th has held that you can't litigate the validity of those findings in the context of the takings suit.

Of course, one of the key differences in Bert Harris litigation as opposed to traditional takings law is that both the "undue burden" test and the "burden on the individual that in fairness should be born by the public" test invite scrutiny of the purpose and nature of the decision as well as its effect. And the concurrence complains about letting the Department off the hook, noting that this is a Bert Harris case if there ever was one. But the plaintiff had already elected the takings remedy rather than the Bert Harris remedy, so this is just dicta.

What we don't know is what would have happened if the plaintiff had elected the Bert Harris remedy. Clearly the concurring judge would have upheld it against not only the "closure" problem, but also against the permit denials. Clearly, the dissent thought the "closure" argument was bogus. The dissent also gives short shrift to the notion (see the findings in the concurrence) that the County and DEP basically conspired to jointly adopt rules that would "get" this particular landfill, and acts as though the denials were completely normal and valid responses to the "decaying, gas and odor producing landfill." What we don't know is what Judge Sharp (the author) would have done with the findings if the case had been a Bert Harris rather than a takings case and she didn't have the "nuisance" exception to fall back on. Would she have read a "nuisance" exception into Bert Harris? Would she have held that the plaintiffs had to litigate the "propriety" of the denials in other forums? We just don't know.

But we can be absolutely sure that this case will generate lots more Bert Harris cases. Clearly, the facts and history here demonstrate that judges will consider the language of the statute and find "undue burdens" in cases where traditional takings may fail legally. What we may see is that Bert Harris can be used to open up real remedies for landowners who get caught on the tail end of abusive, unfair and arbitrary local government actions -- the types of actions from which the 11th Circuit has cut off landowners from due process and section 1983 damages. What I'll predict is that a lot of land use lawyers will be trying it.