Property Rights Foundation of America®
Founded 1994


Opening Address

Property Rights in the Supreme Court
James S. Burling
Director of Litigation, Principal Attorney—Property Rights Group
Pacific Legal Foundation, Sacramento, California

Seventeenth Annual National Conference on
Private Property Rights
October 26, 2013
The Century House, Latham, N.Y.

Thank you Carol. It really is a pleasure to come back to my old stomping grounds of Upstate New York and see that things haven't changed. It's late October, it's really cold and dreary out and it's great to be in with a bunch of fine people. I know some of you have heard me talk before. I know Carol has a few times. Martha Boneta saw me last year after the Koontz case. Who else in here has seen me speak before? All right. So, when I talk a little bit about property rights in the Supreme Court, some of you will have heard these stories before but they're great stories and I have some new stories as well— because things never change with property rights. So, I want to set the stage of where we are in property rights in the Supreme Court. Where we were, I should say, before the last term where we had three significant property right cases. And then, at the end I'll have a little bit of prognostication about what is going to happen in the future, perhaps.

First, I really want to thank this group for getting together defending property rights. I mean, it should be a no-brainer. This group shouldn't have to exist. Our schools should be teaching people the importance of property rights, the importance of people's ability to live in their homes, to use their property in a way that makes sense.

Nobody says that you should be able to use property in a way that's going to cause serious external harms, to cause damage to the environment. But when we talk about people simply using property as its been used for centuries, for farming or for housing, and other people, as Carol puts it, want your property for other things, whether it's an urban redevelopment project where some business interest can redevelop your property for a shopping center, all in the name of removing urban blight, or if it's a farmer being put out of business because he can no longer plow the fields the way he used to because the government finds wetlands or endangered species on those fields or whether it's somebody who has an industry. I know we'll hear some more from the oil industry. I mean, these are little tiny oil industry guys who have a few wells and a few barrels of oil coming out of them and they are subject to regulations that put them out of business because other people want those rules and regulations.

But one thing does stand between you and the property owners of America and the insatiable desire to take other people's property and that's this little book that Carol gave all of you.* I know many of you never heard of it before and are not familiar with it because it's no longer taught in our schools. It's the United States Constitution. And among other things it says that private property shall not be taken without the payment of just compensation. It also says it can only be taken for public use, and through the Fourteenth Amendment that applies to the states as well. So, great. We have the Constitution, but the Constitution and five dollars will buy you a cup of expensive coffee at Starbucks. But the Constitution with a lawyer can do a lot more good. So, I'm going to talk about some of the legal cases that have been to the Supreme Court.

Where were we prior to the last term on most of the landscape dealings, regulatory takings, which dealt with several interrelated issues? The first issue is what happens when government regulates your property to the extent that you cannot use a significant amount or a portion of it. That could be a potential regulatory taking. And we have a case called Penn Central Transportation Co. v. New York City. This is a case out of 1978. Penn Central Transportation Co. wanted to put an office tower on top of an existing train station in New York City. They were told by the Landmarks Commission they couldn't do that. They sued for a regulatory taking and the Supreme Court came up with a test for regulatory takings. The test was that you look at the economic impact of the regulation, you look at the investment backed expectations of the owner of the property and you look at the character of the regulation to determine whether or not there was a taking.

Those are rather amorphous standards. They're a combination of objective and subjective standards. I often ask, "What the dickens should the subjective expectations of the owner have to do with the question as to whether or not the government has taken property?" If you own a parcel of land and you are told you cannot use that land, what difference does it make whether you inherited that property, you bought it for a good price, or you bought it for a high price, or you thought you could make money from doing one thing versus another thing. What difference does that make? The government essentially sitting on your property telling you you can't use it. Anyway, that is the standard that we have: the Supreme Court, the Penn Central factors, as we call them, your economic impact of the regulation. And there are cases that say that you can lose ninety-five percent of the use and value of your property, there's still no taking because you have something left. There are cases that are a little more reasonable than that but what exactly that means, the Supreme Court has determined.

As far as what the character of the government regulation is, that's kind of a Rorschach ink blot. It's whatever you want it to be. It's whatever you want it to be, too. Ah. It's OK. And it's whether or not the government has physically invaded your property. Some people look at it's whether the regulation does something for the public good. Which, name a regulation that somebody isn't going to argue advances the public good. But in any event that's the test that we had — this Penn Central test. And the bottom line of the Penn Central test, if I could distill it into two words, it is "landowner loses." Because the landowners lose at least ninety-five percent of the cases that go up to a Penn Central style of test. It's unfortunate.

Now, that is only part of the problem of bringing a regulatory taking case and there was a case — Lucas v. South Carolina Coastal Council, where it was held that if the government destroys all use and all value, one hundred percent of the use and value of your property, then there is a per se regulatory taking. But how often does the government destroy one hundred percent of the use and value of your property? There have been fewer cases than I can count on the fingers of one hand where landowners have actually prevailed under that theory of a total Lucas-style taking. So, it's a very difficult and high standard for a landowner to prove as long as there is some use left to the property. That seems to be good enough.

Of course, getting your case into court... the procedural aspects of a case are often as important as the merits of your case. The procedural aspects are very daunting. In a number of states your preference might be to bring a case into federal court because the state courts are particularly biased, they're home-towned against you. But getting into federal court is difficult.

We had a case called Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City. This is a case out of 1985 where the court said that you can only bring a regulatory taking claim based on the federal Constitution if you have utilized all your state administrative remedies so you know what you can and cannot do with the property. And second, you can only get into federal court if you have utilized state legal proceedings to get compensation. If you attempt to bring a case directly into federal court you'll immediately be sent out, kicked out, saying that you have to sue first in state court. Very well and good.

For a number of years people sued in state court trying to advance their state constitutional remedies saying, "Once I'm done with this, then I'm going to argue my federal constitutional claims." But in a case called San Remo v. City and County of San Francisco out of 2005, the court said if you first litigate in the state court and you could have litigated your federal takings claims in state court and, by the way, in every case you can litigate your federal takings claims under state court under a civil rights action under Section 1983 of the Civil Rights Act, then you cannot go into federal court because your federal claims have already been decided in state court and there's a doctrine called "res judicata," which means the thing's already been decided. And since it's already been decided by state court you can't get into federal court. So getting into federal court is a virtual impossibility if you are a landowner trying to bring a regulatory taking claim based on the federal Constitution.

There are no other federal constitutional rights where there is such a bar against going into federal court. If your free speech rights are violated you can go to federal court. If other civil rights under the Equal Protection Clause are violated, you can go to federal court. If your freedom of religion is violated, if the government tries to put restrictions on your ability to worship at a church, for example, you can go to federal court. But if the local government takes your real property and you want to go to federal court based on your federal constitutional rights, federally protected rights, you can't go into federal court. Now, there are some exceptions that are pretty arcane and I won't get into those now except when we talk a little bit about one case later on. So it's very difficult to vindicate property rights in federal court. Of course, once you get to the state supreme court you can appeal from there to the Supreme Court, which is what's happened in a few of the cases I'll talk about in just a moment.

The next to the last background that I want to talk about before I get into what happened in the recent term is the "doctrine of unconstitutional conditions."

Being able to utilize your property is a right. It's not a privilege given to you by the government. It's not a government benefit. That is according to the United States Constitution. That is according to the natural law theory of individual rights which our Constitution is founded upon. Thinkers like John Locke, for example, were highly influential. Roger Pilon is going to be talking a lot more about that this afternoon. But my point is you have a right to the permit but government knows that it also has the ability of conditioning your permits or denying permits that are going to cause environmental harm, adverse external effects of one kind or another. And so, the permitting scheme is well entrenched, where you have to get permits from the government in order to utilize your property, in order to, basically, use your right.

So, in the permitting scheme governments have learned they can ask for a lot of things. They can treat landowners like an ATM machine, virtually. If you want to get a permit then it's "What can you give to us?" It's a beauty contest. What can you make your project do? Not only to serve your purposes but the community's purposes as well. You want to develop some land? How much open space are you going to give us? You want to build some homes? How much low-income housing are you going to support? You want to pave over a wetland? How much wetlands are you going to build somewhere else? These are the negotiations that go on. But there are limits. And the first limit was established by one of our cases in 1987 called Nollan v. California Coastal Commission.

Patrick Nollan was a city attorney. He and his wife Marilyn wanted to build a two-story home on the ocean coast in Ventura County, California, where there used to be a one-story ramshackle bungalow. They went to the Coastal Commission to ask for a permit. The Coastal Commission gave them the permit. They were happy to give them the permit. And he read the permit because he was a city attorney. And it says, "As a condition of building this home you must give one-third of your property to the State of California."

What? So what that means is, say, I am where Highway 101 is, along the coast. This is this property and you are the ocean. By building a two-story home where there used to be a one-story home it created, in the words of the Coastal Commission, a "psychological barrier" to people driving down the highway to realizing the existence of the ocean. Now, I know in New York whenever I tell this story people look at me and say, "Only in California do you worry so much about your psychological barriers." California truly is the "granola state." What ain't nuts, fruits and flakes don't belong. I don't belong there. But anyway, they said that in order to ameliorate the psychological barrier impact you have to give property to the state that will be a part in a public park so people can go from one part of the coast to the other. Eventually, I think, the plan was to go on from Tiajuana up to the Oregon border. To have a long strip of land that people could walk down.

Patrick Nollan was a reasonable person. He wasn't a flame thrower. He realized that you can't fight the Coastal Commission. He was a city attorney. He knew you can't fight city hall. So he handed in the permit. There's a reason why I'm telling this particular story. He handed in the permit and then as good city attorneys do he opened up the legal newspaper and read about a case where Pacific Legal Foundation had sued the California Coastal Commission and won! So, he gave us a call and said, "I'd like you to take my case. I'd like to stop this condition." We told him, "No. We can't sue the Coastal Commission because you agreed to the permit and under California law, if you agree to the permit and the permit conditions, you can't challenge them. Once you sign that permit it's too late." And that is the California law to this day.

So, Patrick Nollan thought about it and said, "Well, tell you what. I'll call you back." During his lunch hour he went back to the Coastal Commission headquarters and he said, "You know, I was here earlier today and I handed you a permit. I think I might have made a mistake." And the lady behind the desk went through her papers, found the permit, handed it to him, he looked at it and said, "Yeah. I made a mistake. Can I have this back?" She said, "Sure." He took it. He went outside. He ripped it up in little pieces. Gave us a call and asked if we could take his case. So, naturally, we did. So just keep in mind as I get to the Koontz case that he never accepted the terms of that permit.

So, the Supreme Court eventually said that what happened was there was an out-and-out plan of extortion and the Coastal Commission could not demand this permit because psychological barrier experienced by the people driving down the coast was not going to be ameliorated by property that they couldn't see because it's on the other side of the house. And if you can't see the ocean, you can't see the land he had to give up. How is it going to ameliorate the psychological barrier? There was, in the court's term, "no nexus" between the condition that they imposed and an adverse impact caused by the project.

A few years later there's another case called Dolan v. City of Tigard in Oregon. In that case a woman, a widow— we love, by the way, being able to represent widows and elderly people in these cases because they're much more sympathetic than developers are. So, here we had the widow Dolan. She was represented by Oregonians in Action, a great organization much like this group here of small landowners and property rights advocates. And they represented this woman and we were a friend of the court in the case because she wanted to expand a plumbing store and a parking lot. And the city said, "Well, your parking lot is going to cause more impermeable cover and potential flooding. And the expanded store is going to cause more traffic impacts. As a result, what we'd like you to do is dedicate your property from your store to the nearby creek and give that to the public for the public to use and put a permanent conservation easement on that and have it as a public park. And we want you to build a bicycle path that will connect to another bicycle path that goes nowhere else in the town and pay for it on your property so the public can use your bicycle path and that will help alleviate traffic." Because as we all know, whenever you want to buy plumbing supplies, you always want to get on your bicycle and carry a sink back to the house. Actually, it's what I tell Angela, my wife, "I can't work on the plumbing today, it's too big to fit on my bicycle."

So, the court there said, "Well, it may have fit the nexus requirement of the Nollan case because, yeah, there was a relationship" — traffic, have a bicycle path, floodway easements, and the land she had to give up — but they said it has to be roughly proportional. The government has the burden of proving that the condition you are asking for is roughly proportional to the impact caused by the development. And the government has to prove that. And that's really key. Because it's not just anything that the government can come up with is any kind of connection. We all know in the words of John Muir that the more I look at things the more I see everything is hitched to everything else. Right?** Everything is connected to everything else. I mean. I'm related to everybody else if you go back far enough. So, the court said there has to be this rough proportionality.

That's where we were at the beginning of the term. There are some other issues that I could talk about at length but I want to get to the Supreme Court cases that were just decided. And this first one is Koontz v. St. Johns River Water Management District. This was just decided in 2013 in June. And in this case Coy Koontz, Sr. bought some property in 1972. These property right cases do not move very quickly. In geological terms they do, but in the terms of human lives, not so quickly. So he bought this property in 1972. It is 14.9 acres outside of Orlando and it was at the intersection of two major roads. It was very valuable property.

In 1985, however, the state of Florida adopted a wetland management law and his property was determined to be in a wetland conservation zone. In 1994, he decided to get serious about developing the property. He applied to develop 3.7 acres of the property. He was told that this was wetland conservation land and he would have to give up a lot because they had the ratios and they wanted him to stick to them. He was told, first of all, that he had to dedicate the remaining eleven acres of his property to conservation. He said, "OK." He was also told, however, that he had to improve property owned by the St. Johns Water Management District that was five to seven miles away and it could cost up to $150,000 to do this. He had to improve their culverts, he had to make their property into better wetlands. And he said, "No. It's not going to pencil out. This isn't that big of a project to be able to spend $150,000 on your property far away. Go pound sand." And they said, "No, no, no. You don't understand. You pound sand. And we're not giving you the permit until you do that."

And he refused to take the permit. He sued them instead. He sued them and eventually at trial court it was determined, first of all, that the 3.7 acres that he wanted to develop were not, as he had said all along, were not wetlands. Therefore, the conditions that the government was imposing were unreasonable. They violated the Nollan standards. They violated the Dolan standards. And the court ordered the Water Management District to grant him a permit. After bouncing up and down the appeals court just like a yo-yo they ultimately granted him a permit and also they awarded him damages for the ten years that he could not use his property. So that was ten years after he tried to develop the property in '94 so in 2004 they did that. Then it was appealed again. And then it went back down again. Appealed again. After a series of yo-yo jumps and some long delays the case made it to the Florida Supreme Court were the Florida Supreme Court ruled against him on two grounds.

Ground number one: The permit conditions had never been imposed upon him because he refused to accept the permit. In other words, he did not take the permit with the conditions attached; therefore, he could not challenge those conditions in court because they had never been applied to him. The logic was irrefutable. However, as you may know, as I mentioned in California when you talk of the Nollan case, if you were listening carefully, in many states if you decide to accept a permit with conditions attached that takes away your ability to challenge those permit conditions. And so that created a little bit of a Catch-22. He asked for clarification from the Supreme Court. "Does that mean that I can now challenge permit conditions after I have the permit accepted?" They didn't answer the question.

The second ground the Florida Supreme Court gave for not ruling in his favor was that the Nollan case and the Dolan case involved exactions of land and bicycle paths, floodways, a state park, a park along your ocean-front property. But all the district was asking for in the Koontz case was money. And money, it's OK. It's not real property. It's not real stuff and if any of you think that Florida's court may have had a basis there, I encourage you to open up your wallets and take out all this funny, green stuff and give it to me because it's really not property. It doesn't count. And I'll make sure it's put to good use. So, they ruled that those cases did not apply to money.

We took the case over at that point and we went up to the U.S. Supreme Court and asked them to take the case. As you know, they may take one out of a hundred cases. They took that case and we had our arguments last January and they said the court issues the decision at the end of the term in June. And it said a few things. First of all, with respect to the question of whether or not you can challenge a permit condition without accepting the permit if it is clear the court said... All justices agreed, actually, all nine of them agreed that if it is clear that a permit is denied because a condition would have been imposed if you accepted the permit, then you can challenge those permit conditions. Now, the dissent. Four justices said, in this case, the permit had never really, the conditions had never really been imposed because they were just negotiations at Koontz's going on with the St. Johns Water Management District and it wasn't really clear that these conditions were the only way that he would have gotten the permit. Now, the trial court said they were. The Court of Appeals said they were. The Florida Supreme Court never reached that issue but the dissenters said that, so there still is [something to consider] with you're dealing with these issues you do have to make it clear that the procedures show that the conditions were a reason for the permit denial.

And then the second thing that the court said was that monetary conditions are just like real property conditions. It involves something called the "doctrine of unconstitutional conditions." What that means is that if you're seeking something from the government— and you have a right to that thing especially —, the government cannot tell you, "Hey. We'll give you this thing" — in this case a permit — "only if you give up a Constitutional right." And in this case you have a Constitutional right to hang on to your property without having the government take it from you. Whether it's real property or money, you have a Constitutional right to hang on to your property and therefore, the government violated that right when it told Mr. Koontz that he could not get a permit to exercise his right to use his property unless he gave $150,000 to them. I should mention that he didn't even challenge the eleven acres that he had to give up. They were wetlands and he just never really fought that one. But certainly as far as the monetary condition, it helped him a lot.

Now, I speak to developers sometimes and I tell them about these cases and they're all happy about them but they say, you know, as the matter of course, normally when we're going to the permitting process the government asks for more than they're entitled to, we'll give it to them just so that we can get the permit. And there is that pragmatic pragmatic consideration that land developers will go through. I was giving a speech in Florida last week. Same topic. And some developers came up to me afterwards and said, "You know, last night we were in a permitting meeting and the county gave us our permit. We were thrilled. Then the county said, 'And by the way, we want you to spend $25,000 to fix some government infrastructure.' That has no relationship to the permit and my partner was ready to stand up and scream that you can't do that and I pulled him down. I said, 'No, no, no. We're getting the permit. It's only $25,000. We can do it.'" And that is a problem that land developers, being pragmatic business people, will accede to the extortion because they're not crazy people. They don't want to be litigating for years and years and years.

Coy Koontz, Sr. never lived to see the day of his vindication. He died a few years ago and his son has carried on the case — Coy Koontz, Jr. And at the Supreme Court argument I mentioned that the likely result would be this case would go back down to the Florida courts, which is where it is now. I met a couple of Coy Koontz, Sr.'s grandnieces and I said at that funeral, "You know, there's something you ought to read as far as your English classes, a book called Bleak House by Charles Dickens."

For those who don't recall your English history, your literature days, that was a case where a lawsuit goes for multiple generations over an inheritance. In generation after generation until finally the case is resolved but there's no money left 'cause the lawyers got it all. Now, I was told that was a bad result. But in any event, so I told the young kids to go out and read Bleak House because who knows when this case is going to be over and it will be their case.

So that was a nice, sweet victory because it does give to developers and landowners and anybody seeking a permit something in their back pocket. That if the government goes too far in asking for too much you can pull out a copy of the Constitution and say, "By the way, I know all about the Nollan case, I know all about the Dolan case, I know all about the Koontz case and if you go too far, we can sue you and we can win." So, you know, sometimes the government will calculate the cost of litigation and they'll ask for as much money as they can get you for, considering the cost of litigation. But you're better off than you were. Not as great as I would like, but, you know, it helps.

The second case that the Supreme Court dealt with is a completely different subject in some ways. It's a case called Arkansas Game and Fish Commission v. United States. Here is one government entity suing another government entity. I love it when government sues each other. But they had a legitimate complaint. The Army Corps of Engineers had a dam in Arkansas and at the request of farmers living upstream from the dam the water was held behind the dam at different pattern than it had been from the time it was built. This caused was heavy releases of water during the spring and early summer months, causing flooding of a very large area of timberland belonging to the Arkansas Game and Fish Commission. For six or seven years this area was inundated during the warmer growing season with water. As a result, trees died. Precisely eighteen million board feet of timber was destroyed by this flooding pattern. The Corps of Engineers got enough complaints in the State of Arkansas. They started getting complaints within a year but after six years, seven years, they finally decided, "Hmm, maybe we made a mistake" and they stopped flooding. But in the meantime there were eighteen million board feet of dead trees. The State of Arkansas sued the Army Corps of Engineers. They won at the trial court. They won damages of $5.7 million for the lost timber.

The federal government appealed from the Court of Federal Claims to the Federal Circuit. And the government made a couple of clever arguments. They said, "You know, when we flooded this property it was not a temporary taking because of a couple of reasons. Number one: We did not intend to do the damage. That was a mistake. Number two: This is not permanent flooding, it was temporary. It was only for seven years and so they have their property back." Well, the Federal Circuit agreed with that. There is an old case where the court said that if you have this kind of physical invasion taking it has to be permanent; but was only talking about a case where it was permanent, it wasn't saying that it had to be permanent for all time.

So Arkansas Game and Fish Commission took that up to the United States Supreme Court. And the Supreme Court, in a unanimous decision, found that the government was liable because when the government causes damages from this kind of flooding it doesn't have to be permanent. It can be temporary. The damages here were permanent. Those trees weren't coming back. You know, a dead tree is a dead tree is a dead tree. And so, the federal government was found to be liable and the Supreme Court held for the Arkansas Game and Fish Commission. However, the Supreme Court Justice Ginsburg wrote the opinion and she kind of mixed things up a little bit.

There's a distinction in the law between torts and takings. A tort is a kind of damage. If I hit you and I cause damage to you or my car runs over your lawn. That's a tort. A trespass can be a tort. It's not a taking of your property because, you know, I may have hurt your car but I haven't taken it. And so, the idea is that a temporary flooding might only be a tort, but the courts find it to be a taking. And it's important for a couple of reasons. When you're suing the federal government you cannot sue the federal government for torts but you can sue them for takings. It's also important because torts involve issues of bad actors. Guilt. That is if I hit you because I think you're ugly, I'm liable for tort but if I hit you in self defense because you hit me first and I'm afraid for my life then I'm not liable for that. And so guilt and intent all go into the question of a tort.

But with a taking, if the government takes my property it doesn't matter if they intended to do good things with it or bad things. It doesn't matter if they meant to take it. They took it! So, they're liable for it. And that distinction has been clear in the law for a long time. Well, the law has been getting clearer, I should say; there are cases still get that mixed up. But Justice Ginsburg, in her opinion deciding whether or not the property was a taking, said when you send it back down to lower courts, is it also relevant to the takings inquiry? Is the degree to which the invasion is intended or is a foreseeable result of authorized government action? So, too, is the character of the land at issue and the owner's reasonable best expectations. Now, at the outset I talked about Penn Central because that was a Penn Central case in Penn Central. So now, the court is saying with these flooding cases that they have to be looked at in kind of the same way that you look at Penn Central which is disturbing to a lot of us because, as I told you, Penn Central means "landowner loses." So this idea that the character of the government regulation, the character of the property and the investment-backed expectations was somehow relevant is somewhat troubling to us.

I should also mention that the dissent in the Koontz case — go back just a second, I meant to mention this. The dissent said that, when the permit was denied, then that was a Penn Central analysis type of taking and the court said you shouldn't look at it in the lens of the doctrine of unconstitutional conditions. You should have weighed the character of the regulation and investment-backed expectations. So that was a dissent. That didn't come up in the Koontz decision but now in Arkansas Game and Fish those Penn Central factors seem to be alive.

Now, this is very technical stuff and I don't expect you absorb it all. I'm not going to give you a test on it later. You might, Carol? But I'm telling you this because it just shows how complicated this idea of regulatory takings in achieving a takings win can be.

The last case I want to talk to came out of the Supreme Court last year was — and I'm only going to spend a couple minutes on this — Horne v. Department of Agriculture. I don't know how many of you were around during the 1930's but they were bad times. There was an economic depression going on and one of the ways that the New Deal government thought they could cure the Depression was to increase prices of food. And the way you increase the price of food is by limiting the amount of food that gets to the market. And this is going to help all the poor people who couldn't afford food because the farmers get more money for their food because they were benefitted by the New Deal, and the poor people would get jobs working for the farmer. Look, I'm sorry, I'm not an economist. You'd have to ask an economist how the New Deal worked. But raisin producers in California had to give a certain amount of their crop to the government so the government won't sell them but give them away to Third World countries: India, Africa, wherever. But they won't be sold in the U.S. and that keeps the supply of raisins down so the price of raisins can be artificially high.

Well, Mr. Horne decided that he didn't like giving forty percent of his raisins in a particular year to the government. He looked at the law and said, "I'm not a producer of raisins, I'm a handler of raisins." Because there's a distinction in the law, and therefore he sold all his raisins on the open market and the federal government said, "Ah, ah, ah, a-ah. You have to pay a fine of $695,000 for selling your raisins on the open market." He argued that was a taking of my raisins and he sued.

He sued in the Federal District Court. The Ninth Circuit said that he sued in the wrong court. Under Williamson County he should have gone to a different court to sue — the Court of Federal Claims — therefore it tossed him out. The Supreme Court took the case. The case is fascinating. You should listen to the oral argument. It goes on for most of the hour about the distinction under the law between a producer of raisins and a handler of... (Yawn. Yawn) Excuse me. Excuse me. A handler of raisins. And the take-away from the ultimate decision is that he was in the right court. He could go into the Federal District Court. And there may be some relevance to the Williamson County issue that I talked about earlier about how difficult it is to get into federal court. There are chinks in the armor of that case. This is one of them. It was based on a statutory interpretation, not very interesting. And the court did not reach the issue of whether or not the taking of forty percent of the raisin crop was or was not a regulatory taking. That was sent back down to the lower court. But we think some very interesting developments may occur there. Because, literally, he couldn't use his raisins. The government got the raisins. And it seems like a taking to me, but they call it mere economic regulation.

The very last case that I want to talk to is a case that hasn't been decided yet. The Supreme Court just granted review. This is a case brought by our friends at Mountain States Legal Foundation called Marvin Brandt v. United States. Many of you may remember that there used to be a lot more railroads across the country than there are now. Since the railroads were built we have these things called highways, and railroads became less important. So, a lot of railroads have been abandoned.

When the leases for the railroads were first purchased or were acquired by the railroad companies, they had a clause, either express or implied, pursuant to the common law that when the railroad abandons this particular right-of-way easement then the land reverts to the landowner. So, if a farmer has a railroad behind his property and the railroad abandons that right-of-way, then it goes to the owner in the fee simple and the estate is combined together.

But a lot of advocates of public hiking trails thought they had a really brilliant idea. And it was actually brilliant. All kinds of new thievery, I think, are brilliant in some ways. I have a great admiration for the creativity of the thefting class. And so, yes, Congress, speaking of, decided that when a railroad abandoned its right-of-way, then it would no longer be abandoned under law: it would be "rail-banked." It would be going into an inventory for future potential rebuilding of the railroads. Because the real likely thing is we're going to go back to the railroad era of the Nineteenth Century.

So, in the meantime, while these are rail-banked we can use these properties for hiking trails. And so you have hiking trails all across the country where there used to be railroad rights-of-way. The landowner is saying, "Now, wait a minute. This easement was for railroad purposes, not for a hiking trail. And I really didn't mind a train crossing my property two, three times a day, or two, three times a week, depending where you were, but I don't want all these bicycles and these hikers on my property because that's too easy to trespass and cause problems, and it's, you know, invasion of my privacy and all that."

And so, they sued around the country. And in most of the cases where they sued, they won big money damages against the federal government for the value of these easements. They still have a hiking trail there but at least you get compensated for it. So, the government hasn't been happy about that. They keep on getting sued. They keep on defending with the same defense and they keep on losing. You try something over and over again and you expect a different result that is the definition of... government. I know you're thinking I was going to say something else.

But in this case, in the Brandt case, the government had a better idea. They went to Federal District Court in Wyoming, because there is one federal district court in Wyoming that was kind of screwy, and they argued, "You know, there is in all these deeds an implied reversionary interest to the government. This is land that was originally government land in the West. The railroads took it over. Then the land was homesteaded, went into private hands subject to the easement." The government is saying there is an implied reversionary interest which means on the tens of thousands miles of abandoned railroads in the West the government gets the property when the railroad abandons it.

Big surprise to the landowners. Big surprise to everybody because any property lawyer will tell you there is no such thing as an implied reversionary easement except in this one case out of Wyoming. And the government actually won that argument at the Tenth Circuit. You can always get judges that will agree to anything. And they appealed to the U.S. Supreme Court. The Supreme Court took the case up. So, we're going to see how serious the Supreme Court is about a common law definition of property. It may not be a case that affects everybody, especially in the East Coast where you did not have an underlying government ownership in the first place. But it's still a very important case.

So, the bottom line of these cases is that the government is moving slowly, incrementally, bit by bit, in the direction of further protection for property owners. We have a long way of going. There are many people in this country including people called judges who do not understand the concept of property rights. They do not really understand that people have a fundamental right to own and use property as they see fit so long as you do not cause an external adverse harm to your property. And as long as there are a substantial number of people that see land as being part of our common heritage. Roger Pilon will talk a little bit later this afternoon about the idea of landownership as transformed under the Progressive Era from something we own and something we control to something that is now a community asset.

If you want to develop your land it's not your decision alone, it's your decision plus the decision of the government, plus the decision of the community, plus the decision of what I think euphemistically are called "stakeholders" which are just thieves. Yes. Because they don't own an interest in you property in your farm or in, say, a building in New York City but they want to make the use of that property subject to the public desires and whims so it's no longer private property the way it used to be.

Nevertheless, there are a number of justices on the Supreme Court that do understand what property rights are like. There are a number of just courts around the country that understand that. This is why groups like us, Pacific Legal Foundation, continue to litigate these cases. I'd love to tell you more and I'd love to send more information to you if you want to get on our email list, etc. Give me your business cards or give me your email address later and I'll send you a list. If you don't like getting the emails from us, you could always unsubscribe. But we do have a lot of useful information.

Thank you very much.

*The little Constitution and Declaration of Independence books were donated courtesy of Cato Institute.
**"When we try to pick out anything by itself, we find it hitched to everything else in the Universe." My First Summer in the Sierra, John Muir (Boston: Houghton Mifflin, 1911.)

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