News & Events

February 17th, 2015 — In News & Events

Owners’ Counsel of America Recognizes UH Law Professor David Callies with the 2015 Crystal Eagle Award for His Scholarship on Takings Law and Private Property Rights

Prof. Callies Accepting Eagle

Prof. Callies addresses OCA Members.

In a ceremony February 7, 2015 at the Nikko Hotel in San Francisco, OCA recognized Professor David L. Callies, the Benjamin A. Kudo Professor of Law at the University of Hawai‘i William S. Richardson School of Law, for his lifetime of scholarship addressing land use, eminent domain, takings law and private property rights.

Annually, OCA identifies an individual who has made a substantial contribution toward protecting the civil right of private property ownership and presents that individual with the Crystal Eagle Award.  We are honored to recognize David Callies with the 2015 Crystal Eagle Award for his work concerning property rights, land use regulation and takings law.

Richardson Law School Dean Avi Soifer said, “It is wonderfully fitting that David Callies has been honored in this way. He has been a standout teacher and scholar at our Law School for decades during which he has informed, challenged, and creatively provoked a generation of our students.” Soifer added, “David continues to do that and much more for the Law School as well as for many members of the larger community.”

At the Law School, Callies teaches property, land use, and state and local government law. He is a member of the American Law Institute, the American College of Real Estate Lawyers, the Council of the International Bar Association’s Asia Pacific Forum, the College of Fellows of the American Institute of Certified Planners and a Life Fellow with the American Bar Foundation. He is also the past Chair of the American Bar Association’s Section of State and Local Government Law, and he received the Section’s 2006 Lifetime Achievement Award.

A prolific writer, Callies has authored or co-authored 20 books and over eighty articles on topics relating to real property law, takings law, and land use and development in both the United States and Asia. In 2007, his book Taking Land: Compulsory Purchase and Land Use Regulation in the Asia-Pacific (with Kotaka) (U.H. Press, 2002) was republished in Japanese. Additionally, his book, Land Use Controls in the United States is published in both Japanese and Chinese.   He authored the article “Takings, Physical and Regulatory,” addressing the use of U.S. property law precedents by Hong Kong’s highest court that was published in a special 2007 edition of the Asia Pacific Law Journal to commemorate the 10th anniversary of Hong Kong’s establishment as a special administrative region of China.

Gideon Kanner introduces Prof. Callies.

Gideon Kanner introduces Prof. Callies.

Beyond his written scholarship, Callies has delivered endowed lectures at Albany Law School and John Marshall Law School, presented at the Brigham-Kanner Property Rights Conference at William & Mary Law School, and lectured on land use issues in Japan, China, and Korea. He recently served as co-chair and lecturer at Touro Law School’s symposium commemorating the 40th anniversary of The Takings Issue, a book Callies coauthored with Fred Bosselman and John Banta in 1973. He is a regular speaker at annual conferences presented by the American Law Institute, and the American Planning Association.

Gideon Kanner, Professor Emeritus, Loyola Law School, and Robert H. Thomas, a director with Damon Key Leong Kupchak Hastert in Honolulu, introduced Professor Callies and presented the award. Thomas is the Hawai’i representative of OCA and a 1987 graduate of the William S. Richardson School of Law.

Mark Murakami '99, Prof. Callies, and Robert Thomas '87.

Mark Murakami ’99, Prof. Callies, and Robert Thomas ’87.

“The Owners’ Counsel of America sought to honor David Callies for his scholarship, which has evolved over the last 40 years to highlight the importance of private property rights in takings law,” said Thomas. “David has become an abiding voice in support of the constitutional right of property, and a fearless and outspoken critic when property rights are not given appropriate recognition. For example, in a recent article, he noted that the Hawai‘i Supreme Court’s 1993-2010 track record on private property rights was ‘appalling,’ and hoped the current court would reverse that trend.”

“In addition to his work researching, thinking and writing about property and takings law, we are grateful to Professor Callies for educating and mentoring new generations of lawyers, and for showcasing the relationship between property rights and individual liberties,” Thomas added.

Prof. Callies with Eagle

Prof. Callies with the 2015 Crystal Eagle Award.

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February 13th, 2015 — In News & Events

Injunction Issued to Prevent Condemnation of Property for XL Pipeline in Nebraska

This guest post has been authored by OCA Nebraska Member Bill Blake and follows his previous guest posts here and here.  As events continue to unfold relating to the Keystone XL pipeline, we hope to feature more of Bill’s insights.

*****

The Judge of the District Court of Holt County, Nebraska issued a temporary injunction on February 12, 2015, halting Transcanada’s efforts in Nebraska to acquire easement rights for the XL pipeline through eminent domain proceedings. Transcanada had filed over one hundred proceedings in county courts along the proposed route in January, to obtain the permanent and temporary easements needed to complete the pipeline corridor. Over 80% of the easement rights were already been obtained through negotiations with landowners. The condemnation proceedings were filed on the on the eve of expiration of a permit issued by the Governor to use the selected route through Nebraska. The condemnees in Holt county joined together to file the action to enjoin the condemnations.

The Nebraska Supreme Court temporarily opened the way for condemnation in an opinion that failed to hold the routing procedure unconstitutional, but may have also failed to hold it to be constitutional. Only four judges of the Court’s seven judges voiced an opinion on the issue.   It takes five judges to declare a statute unconstitutional. The remaining three judges opined that the plaintiffs did not have standing and refused to give an opinion on the constitutional issue.  See Thompson v. Heineman, 289Neb. 798 (2015) (or Bill’s previous guest posts here and here).

Included in the list of bizarre twists and turns in the XL saga is the fact that Transcanada agreed to issuance of the injunction. This leaves the condemnation proceedings in limbo until the Nebraska Supreme Court has been given a chance to revisit the constitutionality issue in a case where the plaintiffs meet the standing test of the remaining three judges. Interestingly, the Court could also add even one more twist by determining that the Court had accepted jurisdiction in the prior case by a vote of four to three and that the matter has already been decided, even though no judge to date has given an opinion that the routing statute is constitutional. The Court could also avoid the issue altogether by focusing on any one of several other challenges to the route approval process.

William G. Blake
Baylor Evnen Law
Firm

Lincoln, Nebraska

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January 13th, 2015 — By  William G. Blake, CRE — In Articles

“It Ain’t Over ‘Til It’s Over:” Nebraska Supreme Court Rules (or Maybe Not) on the Validity of the TransCanada XL Pipeline Route Approval Through Nebraska

Probably no appeal to the Nebraska Supreme Court has been watched more closely by more people than the challenge to the statutory routing process for the proposed TransCanada XL Pipeline.

On January 9, 2015, the Nebraska Supreme Court issued its decision, or lack thereof, in a sixty-four page opinion.[1] By state constitution, the Nebraska Public Service Commission has plenary power over all common carriers.[2] However, the Legislature adopted a process in 2012 to specifically address the route of the proposed XL Pipeline through Nebraska. The Legislature allowed the Governor, after input from the Nebraska Department of Environmental Quality, to approve the route.[3] The proposed route was studied and the Governor issued approval. A group of citizens then challenged the process, claiming that approval was unconstitutionally taken away from the Public Service Commission and delegated to the Governor. They made their challenge on the basis of their standing as taxpayer citizens, claiming the approval process was an unlawful expenditure of public funds. Their standing was challenged, but the trial court found they had standing as taxpayers, that the XL Pipeline would be a common carrier, and that the statutory approval process was unconstitutional. The decision was immediately appealed to the Nebraska Supreme Court. The Court’s hearing process was expedited, but many weeks went by without a decision being issued. We now know the reason for the delay. Unfortunately, we learn little else from the decision. It raises more substantive and procedural questions than it answers, exhibiting an unprecedented amount of acrimony among our Nebraska Supreme Court Judges.

Pursuant to the Nebraska Constitution, a statutory enactment cannot be declared unconstitutional without five of our seven judges so ruling. However, in the challenge to the XL routing process, four of the judges agreed that the plaintiffs had standing and that the courts therefore had jurisdiction to hear the case. The four also agreed that the statutory approval process was unconstitutional. However, the other three judges dissented on the question of standing and refused to address the merits of the case. While no judge stated a vote in favor of the constitutionality of the process, the four member majority was not enough to declare the process unconstitutional. Therefore, the legislation and the proposed route of the pipeline through Nebraska would appear to be approved by default. The three member dissent accused the other four members of reaching an absurd result, but the four members were quite clear that they thought the dissenting members had shirked their judicial duty and forced an absurd result. The two camps could not even agree on whether to refer to the four members as a majority or a plurality.

For condemnation lawyers, the most important part of the opinion is that the four members fairly clearly ruled that eminent domain cannot be exercised by just any company that owns a pipeline. Prior case law in Nebraska, as well as our statute authorizing eminent domain for pipelines, had made it appear that privately owned pipeline companies could exercise eminent domain for private use pipelines, and in fact case law had approved condemnation proceedings for such pipelines. However, the court carefully considered the history of pipeline regulation in the state and recognized that the prior decisions allowing private pipeline companies to exercise the power had been issued at a time when it was thought that the federal government had preempted state regulation of interstate pipelines. The court, referring to a prior opinion[4], stated that:

“[the] argument that a private carrier could exercise the right of eminent domain in this state for a non-public purpose….is simply wrong….[T]he reason common carriers can exercise the right of eminent domain lies in their quasi-public vocation of transporting passengers or commodities for others. A citizen’s property may not be taken against his or her will, except through the sovereign powers of taxation and eminent domain, both of which must be for a public purpose. Eminent domain is the State’s inherent power to take property for a public use.” (Court’s italics).[5]

The court then clarified what is meant by the term “common carrier”, finding assistance from Texas case law and stating that statutes authorizing use of eminent domain power by common carriers do not include the owner of a pipeline built for that owner’s exclusive use. “Under the Nebraska Constitution’s limitation on the power of eminent domain, pipeline carriers can take private property only for a public use. That minimally means that a pipeline carrier must be providing a public service by offering to transport the commodities of others, who could use its service, even if they are limited in number.”[6]

The Court did not appear to be comfortable with the conclusion that the XL Pipeline would be a common carrier, but the district court had so concluded, and the parties did not contest the issue.

Given the rather perplexing result and the nature of the matter, this will likely not be the end of the litigation. News services were quick to declare Nebraska’s approval of the XL, and proponents urged Congress and/or the President to do the same. However, opponents were just as fast in arguing that they are not ready to give up. TransCanada still needs easements through more than 100 properties in Nebraska, and must file condemnation before its routing permit expires. The permit will expire on January 22, 2015. Any effort to condemn can be expected to be challenged by somebody who has standing as a property owner in the path of the proposed route. Would such challenge gain the fifth court vote to declare the siting unconstitutional? Can the Governor extend the siting permit to avoid the two-year window of opportunity? How will this affect the political battle in Washington, D.C. over Federal approval of the pipeline?

As Yogi said: “It ain’t over ’til it’s over.”

William G. Blake
Baylor, Evnen Law Firm
Lincoln, Nebraska

Endnotes


[1] Thompson v Heineman, 289 Neb. 798 (2015) https://supremecourt.nebraska.gov

[2] Nebraska Constitution, Article IV, Section 20.

[3] Nebraska Unicameral, L.B. 1161 (2012).

[4] City of Bayard v North Central Gas Co., 164 Neb. 819, 83 N.W.2d 861 (1957).

[5] Thompson v Heineman, at 843.

[6] Id. at 845.

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January 12th, 2015 — By  William G. Blake, CRE — In News & Events

Guest Post: Nebraska Supreme Court rules (or maybe not) on the validity of the approval of TransCanada XL pipeline route through Nebraska

The following guest post has been authored by OCA Nebraska member-attorney, William Blake, a partner in the Lincoln office of Nebraska law firm Baylor Evnen

*****

In a lengthy and acrimonious opinion issued January 9, 2015, the Nebraska Supreme Court issued a non-decision on the constitutionality of the process for routing of the TransCanada pipeline through Nebraska. It may prove to approve the route by default. The Court’s opinion answers very little, and raises far more questions than it answers. The only thing that is clear is that not every pipeline can be granted the power of eminent domain. To have that power, the owner must be a common carrier, which means the pipeline cannot exclusively carry the owner’s product. “[T]he reason common carriers can exercise the right of eminent domain lies in their quasi-public vocation of transporting passengers or commodities for others. A citizen’s property may not be taken against his or her will, except through the sovereign powers of taxation and eminent domain, both of which must be for a public purpose.”

It takes five of the Court’s seven judges to declare a statute unconstitutional, and only four judges so opined in this case. However, the other three declined to offer any opinion other than that they had no jurisdiction to do so. Therefore, at least for now, the route seems to be approved, and the pipeline will be a common carrier for which the power of eminent domain can be used.

See Bill’s previous post here in which he discusses the subject of this Nebraska Supreme Court opinion – the District Court ruling which struck down the state law as unconstitutional that allowed the Governor to approve a route for the TransCanada Keystone XL pipeline to cross the state.  

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December 19th, 2014 — In News & Events

OCA’s Amicus Brief Asks: Can the Most Important Evidence in an Eminent Domain Trial be Withheld From a Jury?

This week we filed an amicus curiae brief in support of Virginia Beach homeowners, James and Janet Ramsey, in Ramsey v. Commissioner of Highways, Record No. 140929 (review granted November 3, 2014), a case we previously discussed here.

In this eminent domain case, the Virginia Department of Transportation presented testimony at trial that was much lower than the DOT’s initial offer and pre-offer statements of value.  The trial court refused to admit any testimony related to the earlier higher statements of value. As a result, the jury did not hear the original value the DOT offered for the property.

OCA’s brief questions whether the jury can be kept in the dark about the most important evidence in an eminent domain trial – the value of the private property taken. The brief focuses upon two arguments.  First, the duty of the government in an eminent domain action must be to seek justice and develop a full and fair record upon which a jury may consider the just compensation to be awarded to a property owner whose land has been involuntarily taken for public use. Second, the statement of just compensation required by Va. Code § 25.1-204(E)(1) is a legislatively-mandated statement requiring factual documentation as to the government’s financial liability to a landowner in an eminent domain proceeding which the jury must be allowed to consider, not an inadmissible offer to compromise.

“In this case, the trial court erred by concluding that the Commissioner’s statutorily-required statement of just compensation was merely an offer to settle the dispute over purchase price rather than the required good faith statement and appraisal of value required by Virginia statute,” said Robert H. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu and the Hawaii representative of OCA. “If affirmed, the tactics employed in this case by the Commissioner and Department of Transportation will not only be an injustice upon the Ramseys but will serve as a template for future systemic undercompensation in eminent domain actions across Virginia.”

OCA urges the Virginia Supreme Court to reverse the judgment of the Virginia Beach Circuit Court and remand the case for a new trial to determine the amount of just compensation required pursuant to the U.S. and Virginia Constitutions.  If VDOT’s abusive tactics are allowed to stand, the property rights of all Virginians are at risk.

For more commentary about the case visit here.  OCA’s press release is available here.

Amicus Brief of Owners’ Counsel of America in Ramsey v. Commissioner of Highways, Record No. 140929, Virgin… by Owners’ Counsel of America

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November 11th, 2014 — In News & Events

Amici Brief Asks Supreme Court to Confirm that Property Rights Are Fundamental Rights Deserving Constitutional Protection

The National Federation of Independent Business (NFIB) Small Business Legal Center, Cato Institute, Rutherford Institute and Owners’ Counsel of America (OCA) have joined together in filing an amici brief urging the U.S. Supreme Court to grant review of the Eleventh Circuit’s decision in Kentner v. City of Sanibel, No.13-13893 (May 8, 2014) (Supreme Court Docket No. 14-404). In the brief supporting the Plaintiff-landowners, OCA and its fellow amici ask the Supreme Court to confirm that the constitutional guarantee of due process protects private property rights from government confiscation or revocation and to ensure that property owners nationwide are not deprived of “life, liberty or property, without due process of law.”

“The Eleventh Circuit concluded in Kentner that a property owner’s riparian rights, although recognized by the State of Florida as property rights, are not considered as ‘fundamental’ rights under the U.S. Constitution so that they are protected by the Fourteenth Amendment’s Due Process Clause,” said Robert H. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu.

“In holding that the city’s ban on the construction of docks and piers was not subject to federal due process protections, the Eleventh Circuit held that a ‘state-created’ right is somehow not deserving the same level of due process protection as a ‘fundamental’ right,” explained Thomas, who signed on the brief as the Hawaii representative of the Owners’ Counsel of America.

The case revolves around Ordinance 93-18 enacted by the city of Sanibel, Florida in September 1993 purportedly to protect seagrasses growing on the submerged lands of the Bay Beach Zone an fronting San Carlos Bay. The ordinance prohibited the construction of new docks and piers within the Bay Beach Zone. Plaintiffs purchased properties in this zone after the ordinance was adopted. Because they own waterfront property bordering the high tide line, Plaintiffs possess riparian rights – rights to access the water, including “reasonable docking rights.”

Plaintiffs challenged the law in state court on the grounds that it violated their rights to due process and did not substantially advance a legitimate state interest. The city removed the case to federal court which dismissed the complaint concluding that riparian rights are based in state law and are not “fundamental” rights protected by the U.S. Constitution. The Eleventh Circuit Court of Appeals affirmed holding that “there is generally no substantive due process protection for state-created property rights.”

“The decisions of the federal district court and Eleventh Circuit are clearly troubling in that property rights, whether so called ‘state-created’ or ‘fundamental,’ are not given the protection under federal law when the facts suggest that the due process clause of the Fourteenth Amendment is violated,” said Andrew Brigham, managing partner of Brigham Property Rights Law Firm, PLLC and the Florida representative of OCA. “By excluding property rights from the substantive protections of due process, the Eleventh Circuit is setting a precedent based upon a false premise that must be challenged.”

Coauthored by Professor Ilya Somin of George Mason University School of Law and Luke Wake of the NFIB Small Business Legal Center, the amici brief of the NFIB, Cato Institute, Rutherford Institute and Owners’ Counsel of America argues that the decision of the Eleventh Circuit goes against the text of the Fourteenth Amendment, its original meaning, and longstanding precedent. Furthermore, the brief contends that the Eleventh Circuit’s arbitrary distinction between “legislative” and “executive” acts that infringe on property rights is at odds with Section 1 of the Fourteenth Amendment which specifies that “no State” is permitted to violate the Due Process Clause, regardless of which branch of state government happens to be the violator.

“OCA joined the NFIB, Cato Institute and Rutherford Institute as amici in this case to urge the Supreme Court to step in and confirm that property rights deserve due process protection and ensure that all Americans are not deprived of ‘life, liberty or property, without due process of law’,” Brigham stated.

More commentary about this case is available at the following links:

Amici Brief Asks: Aren’t Property Rights “Fundamental” Rights? – Robert Thomas

Our amicus brief on Due Process Clause protection for property rights – Ilya Somin

Rutherford Institute Asks U.S. Supreme Court to Protect Property Rights – The Rutherford Institute

Yes, Florida, the Constitution Protects Property Rights – Ilya Shapiro & Trevor Burrus, Cato Institute

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September 25th, 2014 — In News & Events

Join Us at the 11th Annual Brigham-Kanner Property Rights Conference in Williamsburg, Virginia

With the official arrival of Fall, we are reminded that the 11th Annual Brigham-Kanner Property Rights Conference is just around the corner – October 30 & 31, 2014 at William & Mary Law School, Williamsburg, Virginia. As previously announced, this year’s Brigham-Kanner Property Rights Prize will be awarded to Michael M. Berger, a partner with the Los Angeles Office of Manatt, Phelps & Phillips. Mr. Berger is the first practicing attorney to receive the prize. Nine of the previous recipients are law profs and one retired Supreme Court Justice Sandra Day O’Connor. (Click here for a list of past recipients). [Mike Berger is an attorney affiliated with Owners’ Counsel as an Honorary Member.]

Details concerning the schedule, discussion topics and speakers is available online, a copy of the brochure is here. You may also contact William & Mary Law School at (757) 221-3796.

If you’ve never visited Williamsburg, please consider joining us. It is a city rich in history and is gorgeous in the Fall. Check out some of the photos we posted during our trip last year here.

We hope to see you there.

Special thanks to Robert Thomas for uploading a copy of the post card below.

11th Annual Brigham-Kanner Property Rights Conference
2-1267e77f9e

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August 26th, 2014 — In News & Events

$8.1 Million Eminent Domain Award Affirmed by New York Appellate Court

Last week, the New York Appellate Division, Second Department, affirmed a condemnation award of $7,855,200 plus interest for just compensation to Split Rock Partnership for the taking of its property. In Matter of Western Ramapo Sewer Extension Project, Index No. 2013-03693, 2014 NY Slip Op 05889, decided August 20, 2014, the appellate court held that the measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time of the taking.

Split Rock owned 64 acres of vacant land in the Village of Hillburn, Rockland County, New York. In November 2004, Split Rock entered into a contract for sale to sell the property to developer, Wilder Companies.  The sale was never completed as Rockland County Sewer District No. 1 acquired the subject property using its power of eminent domain in February 2005 to construct a new sewer processing facility.

The Court concluded that Split Rock satisfied its burden of demonstrating that the highest and best use of the property was for the commercial development of an office center and that the trial court had properly considered the “unconsummated Wilder Contract” for sale as admissible evidence of the subject property’s value. The Court also noted, that Split Rock’s knowledge of the potential condemnation prior to executing a contract for sale of the property did not demonstrate that Split Rock acted in bad faith or simply to inflate the value of the property.

Additionally, the appellate court held that the Supreme Court correctly exercised its discretion in preventing two of the Sewer District’s witnesses from testifying at trial because the District failed to comply with the court rules requiring the timely disclosure of expert witnesses. Remember friends as we’ve learned from our late night viewing of Law & Order, the “Supreme Court” in New York refers to the trial court and the “Court of Appeals” refers to the state’s highest court.

The case was tried and appeal argued by OCA New York Member Michael Rikon, a partner of Goldstein, Rikon, Rikon & Houghton, P.C., a law firm founded in 1923 which limits its practice to the representation of private property owners in eminent domain matters.

Read the firm’s press release about the decision here.

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August 19th, 2014 — In News & Events

A Mississippi Jury Awards Bayfront Restaurant Owners $644K Just Compensation in Inverse Condemnation Action Against the State

Dan Bs Deck

The view from the back of Dan B’s busy restaurant overlooking the deck and Bay St. Louis before Hurricane Katrina.

On August 29, 2005, Hurricane Katrina destroyed Dan B’s Restaurant and Bar on Beach Boulevard in downtown Bay St. Louis, Mississippi. The popular beach front restaurant owned by the Murphy family featured a large deck on the beach overlooking the Bay of St. Louis.

Dan B's deck and restaurant as viewed from the water's edge the day before Katrina made landfall (Aug. 28, 2005).

Dan B’s deck and restaurant as viewed from the water’s edge the day before Katrina made landfall (Aug. 28, 2005).

After the storm, a new small boat harbor was included as part of the redevelopment plan for the downtown area by the City of Bay St. Louis and the State of Mississippi. An access ramp and parking facilities for the new harbor were planned on property owned by the Murphy’s and several other downtown property owners. The State of Mississippi, however, claimed the land was public tidelands of the State of Mississippi. Construction began on the project and no compensation was paid to the Murphy family for their property.

Brothers Kenneth, Ray and Audie Murphy sought out an experienced eminent domain and property rights attorney to assist them in their legal claims against the government. They retained OCA Mississippi Member Paul R. Scott of the firm of Smith, Phillips, Mitchell, Scott & Nowak, LLP to file an inverse condemnation suit on their behalf.

Trial began on Tuesday August 12, 2014 in Hancock County, Mississippi. On Monday, August 18, the jury returned a verdict in favor of the Murphys and against the State of Mississippi in the amount of $644,000.00 for the taking of their property. The State never made an offer of compensation for their property.

The view from the Murphy property in the "after condition" as construction was ongoing on the harbor (background) and access bridge (foreground).

The view from the Murphy property in the “after condition” as construction was ongoing on the harbor (background) and access bridge (foreground).

The case is Murphy v. State of Mississippi, et. al., Cause No. 12-0453 in the Circuit Court of Hancock County, Mississippi.

*Updated 8/20/14 to include the images above of the Murphy property involved in this inverse condemnation action.

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August 13th, 2014 — In News & Events

OCA & NFIB Join Forces in Support of Private Property Owners in Texas and Nationwide

In July, the National Federation of Independent Business (NFIB) Small Business Legal Center and Owners’ Counsel of America (OCA) joined together to file an amici curiae brief  (copy embedded below) in support of the property owner in State of Texas v. Clear Channel Outdoor, Inc., case number 13-0053, urging the Texas Supreme Court to uphold the award of just compensation to a billboard owner when the land on which its billboards were located was acquired by eminent domain.

The case involves the condemnation of two parcels of land along Interstate 10 leased by Clear Channel Outdoor for its billboards. The state exercised its power of eminent domain to take land for a road expansion project.  It refused, however, to condemn and pay for the billboards located on the land arguing that the billboards were personal property, not “realty,” and could simply be relocated. The State ordered their removal and the billboards were damaged during the removal. The owner, Clear Channel Outdoor, filed an inverse condemnation action to recover just compensation for the taking of its billboards.  [Disclosure: Clear Channel Outdoor is represented in this action by OCA Texas attorney H. Dixon Montague.]

At the center of the litigation are two questions: whether the billboards are improvements to the property and must be paid for, and whether the government should compensate an owner for structures removed or damaged when the government condemns the underlying land for a public project.  The trial court opined that billboards are not moveable personal property but rather realty as they are affixed to the land.  Further, the court concluded that the State should have condemned and paid just compensation to the owner.  The Texas Court of Appeals upheld the trial court’s order and the State of Texas appealed to the Texas Supreme Court.

“As a baseline principle of federal law, the government cannot avoid its obligation to pay compensation under the Fifth Amendment when it invades, destroys, or physically appropriates private property, which it certainly did here” explained Robert H. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu.  Thomas, the Hawaii member of OCA, worked with NFIB attorney Luke Wake in drafting the brief.

The brief filed by OCA and the NFIB argues that billboards are not designed to be moved and that the most valuable part of a billboard is not the materials from which it is made, but rather its ability to generate income. In view of this reality, the brief stresses two points. First, the trial court and the Court of Appeals both correctly concluded that the State must compensate the owner when it orders a billboard removed if the billboard was previously affixed to the ground, or if removal results in damage or destruction of the billboard. Second, the “income capitalization approach,” which takes into account the billboard’s ability to generate income, is required by the Just Compensation Clause of the federal and Texas constitutions, which require the “full and perfect equivalent” of the property taken. In those circumstances, just compensation owed the owner must account for future income.

OCA was honored to join with the NFIB as amici in this case because the question before the Texas Supreme Court requires the Court to consider fundamental principles applicable in all eminent domain cases where property valuation is at issue which is of concern not only to commercial billboard owners in Texas, but all property owners in the state and nationwide.

The Texas Supreme Court will hear oral argument on September 17, 2014.

More on the case from Robert Thomas including links to all briefs filed with the Texas Supreme Court is available here and here.

Read NFIB’s statement on the case here.

Brief Amici Curiae of NFIB Small Business Legal Center and Owners’ Counsel of America, Texas v. Clear Chann… by robert_thomas_5

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