Property Rights Foundation of America®

Speech from the Ninth Annual National Conference
on Private Property Rights
(2005)

National Property Rights Ombudsman Legislation

Craig M. Call

Utah State Property Rights Ombudsman

It is a pleasure to be back, and I have been not just informed but moved by what I have heard today and by this panel in particular. I don't often get a chance to philosophize. The phone rings too much. So it is kind of fun to come and talk about it; but before I do that, let me just give you a little context for the day-to-day grind of my job.

Beverly Watson is in her seventies. She has lost two husbands. Her grandson is living in the old family home but has a big front yard on 2 ½ acres in an area where there is a half-acre zone. So she went to apply to divide one half acre off of that property to build a retirement home so her grandson could continue to raise his family in this wonderful home they have had all these years, which was so suitable for a large family. It has now been 15 months, and she still doesn't have her permit. They told her that she could certainly do it. There was nothing wrong with the idea. But this is what they wanted her to do—deed a 38-foot-wide strip across her front yard to widen the road in front to a four-lane highway, provide an 18-foot-wide easement where they could pile dirt to support the height of the highway if it needed to be that much higher above her front yard, curb gutter and sidewalk, which might be normal, but pave her half of the four-lane road, build a bike path, and bury the regional power line that runs across her front yard.

Obviously she couldn't afford to do that. She called me and we worked things out. I think she will soon have the permit; at least we have had the big breakthrough. The rest is just grinding the process, but it is too bad it takes 15 months to do that.

Steve Putnam had a problem. He owns a lot in the little town of Eureka, Utah, which is an old mining town, and there is a brownfield cleanup going on there. So the EPA needed his land. They offered him $1,500. He said, I sold that land for $10,000 a few years ago. The guy defaulted, but it had nothing to do with the value. He had received some miscellaneous lots from a fellow who went bankrupt as payment of the debt. So Steve knew a little bit about what land was worth in Eureka. The EPA said, well, we had an appraisal. It says it is worth $1,500. He said, may I see the appraisal? They said, no. He said, why not? They said because if we litigate this, we don't want you to have an unfair advantage that you have seen all of our evidence, and his response was, do you litigate a lot of these $1,500 deals?

I called the EPA negotiator, and I said, how many times have you ever shared that kind of an appraisal? He said, we never share the appraisal. He told me the same story. I said, do you litigate these? He said, occasionally, but, anyway, that is a Department of Justice requirement. I said, okay. Luckily, the guy who appointed me as ombudsman for Utah at the time was head of the federal EPA, Mike Leavitt. I just wrote a "Dear Mike" and got a copy of the appraisal. Without any other leverage over the federal government, it is settled, and Steve accepted a $5,000 payment.

Jay Labrum owns land near a reservoir. It is high and dry. They are expanding the reservoir, and his land will still be high and dry. He still has access. They aren't affecting anything. The water won't come near his property, it is not covering any road going into his property, but he is in a subdivision, and the Bureau of Reclamation Commission decided that they would take the entire subdivision, so his land goes, too. There are other properties around the reservoir much closer with full building rights that they are not taking. Why are they taking Jay Labrum's property? We still don't know.

Jay Labrum went to a meeting of the board that handles this particular project, a special district. He advised them, as he should have done, that he was coming. He stood up, and he said, I want to talk about my land. I have some diagrams, I want to know why you are taking it. The chairman said, excuse me, Jay, hold that thought. Do I hear a motion? They moved to go into a closed meeting, excused everybody from the room, talked to the staff about Jay Labrum's issue and what the staff wanted the board to know without Jay Labrum present, reconvened in a public meeting, said, okay, Jay, go ahead and tell us what you have in mind. He said what he had in mind. They said, thank you, next item on the agenda. We still don't know why the district needs Jay Labrum's land.

Steve Bench owns property that he bought. His family has had it for a long time. The local Wildlife Resources Division bought from a private landowner the land between Steve Bench's property and the road. As the intervening landowner now, this agency, charged appropriately with preserving habitat, is now concerned about their singular mission to make sure that the large animals of Utah are preserved and hunter habitat and that is enhanced. Steve wants to build a cabin on his 270 acres. The county will let him do it if he can improve that road. The Division of Wildlife Resources is hesitating to let him build that road. My question for them was, why not? And they said that it was because we are afraid his use of that road will interfere with habitat. I said, what if the county insisted on that road being improved? What would you use as a lever to stop the county from doing that? The person I'm talking to doesn't quite understand the question. I said you have bought a piece of private property. Your role in this, even though you are a state agency, is you are a private property owner. Where do you get the rights you have to stop the county from making that a public road if it isn't really, hasn't met the standard for being created by use?

I answered the question. You have private property rights. That is what you as a wildlife agency are using to defend your right to use your land for what you want to use it for. There is no statute or rule that says that you can't have a road across land that was privately owned at the time the road was established. In fact, you are subject to that burden. So if the County wanted to come and demand a public road be acknowledged there, the only angle you would be able to work is your rights as a state agency and a private property owner. Don't you understand the dilemma we have here? That Steve Bench also is entitled to use that road as he has always used it because he has vested rights across that road because he used it for 20 years to access his property and it has to work both ways.

These are the kinds of things that I work on as the ombudsman for the State of Utah. I don't deal wholesale. I deal retail. I am not out there changing the law. I am simply trying to help the law work better for individuals who call me. There are those like you who are involved in worthy projects to try to enhance the law and make it better for everybody. I am just trying to solve the problem of the person who calls me on the phone. I think it has some real value. The idea is a champion the dignity of the individual.

Our experience is that the office was created in 1997. In 2003, I got about 600 calls. Probably this year it gets closer to 1,000. Most of the time these are homeowners talking about issues related to their homes. Sometimes it is a government created nuisance. Sometimes it an individual trying to get a permit. A law that is grandfathered that is nonconforming uses. Quite often road expansion is going on in the area or assessments for curb gutter and sidewalk and things like that. A lot of Nollan, Dolan type exactions and questions about the approval process.

My goal is simple. I just want to get them straight answers. I also want them to have a mutual evaluation of what would happen if this situation went to court. How would the law apply? If it looks like these people are involved in a situation where a government entity is limiting the use of their property or otherwise making it so they can't do what they have a legal right to do, my job is to help them get the same result they would get in a court room without having to go through all that hassle.

This is voluntary by the property owner. I don't call them. My job is to try to make sure they know I exist so that if they want my help, they can have it. But it is not my job to interfere with their access to the courts or their ability to choose any remedy they have always had. My job is to offer new remedies and other options. For example, when a negotiator comes out to negotiate the acquisition of property in a condemnation setting, the old way is you negotiate, negotiate, negotiate, negotiate, then you litigate. What we try to do, there is a gap there. It is just a huge gap between the dynamics that are going on when you are negotiating and what it takes to get to litigation. Quite often, because the negotiators sometimes self-imposed pressure to close the deal so they don't have to litigate, then all kinds of things happen that just really shouldn't happen between two individuals, that is, a government and the citizen that created the government entity, in reaching some agreement.

So what we have created is a method where a neutral third party can help accommodate that, help do some back and forth to make sure people understand the process, know what the choices are without necessarily being intimated. The result of our list, the Department of Transportation in the year 2001 condemned 23 percent of the land they had to acquire. That is, they had to file a lawsuit against the owners of 23 percent of the properties they needed for their projects that year. So far this year: 3.6 percent. That means approximately 20 percent of the landowners, hundreds of people that would have had lawsuits filed against them, have not. Now those 3.6 percent that are involved in litigation are entitled to it, and in many of those cases that is exactly where it should be. They may have an interesting question of law that needs to be resolved. They might have so much involved that they need a jury to answer the question of how much compensation is due, but for those other 20 percent, they had the choice of doing something else, and something else worked out a lot better for them, in their opinion.

What I do basically is I try to provide information. I brought samples of this. This is a Guidebook to Eminent Domain for Utah. That's your copy, Carol. Your Right to Private Property, basically a summary of property rights in Utah. Imposing Conditions on Land Use. This is the Nollan and Dolan summary. Here is Public Roads and Private Lands, just so people can have a better understanding of how roads are created across property by use and what happens after that. We've printed Your Rights to Open Government, Open Meetings, Open Records. Then this year we finally came out with—this has taken a lot of time to do—A Citizen's Guide to Utah Land Use Regulation. And this is just basically a resource book for people dealing in the land use process. Hopefully all this is helpful.

As a one-man office, now I have a volunteer deputy who is with me for a few months. We'll see if we can raise the money to get the legislature to keep him and my mental health. The goal really is to just get the word out. The web is a wonderful way to reach people. My website is utahpropertyrights.com. But in the middle of all this, and thanks to the Institute for Justice, thanks to Kelo, thanks for the heightened interest, all of a sudden our federal delegation became quite interested in what they could do to be perceived as champions of property owners. I have told them for some time that I wish I had some way to deal with federal agencies. Because all I can do right now is call them on the phone and be told, thanks very much. We are glad to know you exist. Be sure to let us know if you need us.

Well, Orrin Hatch and Max Baucus, two senators from the west, are proposing a bill to create a federal property rights ombudsman. Let me just tell you briefly what the bill includes. It would amend the Uniform Relocation Act. The Uniform Relocation Act is the one that all the agencies use to acquire property through eminent domain. It includes the standards that must be followed and these are the new standards. There would be a property rights ombudsperson at the Department of Transportation appointed by the Secretary and accountable to the President directly. Every agency using federal money or every federal agency, that is any agency like a local DOT using federal money, would:

1. Share the appraisals with homeowners and small landowners, small farmers, small business people.
2. Provide the contact information for an ombudsperson.
3. Offer to mediate and arbitrate before they litigate.

The property owner would be in charge of requesting those processes. Nothing is mandatory on the property owner. They may request dispute resolution and if they wish, they may request a second appraisal at the government's expense. The mediator or ombudsperson would evaluate that request and, if deemed reasonably necessary to resolve the dispute, the ombudsperson would order an appraisal at the agency's expense using an appraiser the property owner chooses, as a reality check on this negotiation process.

We are not encouraging the creation of a federal property czar. Our suggestion is there would be a fall back position at the U.S. Department of Transportation. The reason we chose that location is because they are a funding agency. They don't condemn. They pass money through to other agencies that do the condemnation; therefore, their role is to supervise this process and since 1971 they have been the stewards of the Uniform Act and tried to provide information to local agencies to try to make sure they were following regulation in the acquisition of property. But that DOT ombudsperson would be a default fallback. The idea is agencies, if necessary, should create them but states should create them. So the law says if there is a state ombudsperson in the state in which this federal activity is going on, they should use that state person. And that way, again, you keep it local and try to preserve some federalism here. At the option of the property owner I resonate with what John Gile was saying, with what Harriet said this morning about the need to sue sometimes and to litigate sometimes, and although we want to provide an option not to have to do that if the property owner doesn't want it, we are not here to get in the way of those property owners who choose that as their preferred option.

This was announced this last Tuesday at a press conference. The American Farm Bureau Federation, the Defenders of Property Rights, and the American Association of Small Property Owners endorsed it at that time. We have had positive feelings from the National Federation of Independent Businesses. I know Carol has been recommending something like this for the EPA and in New York.

Basically, again, this is not about Kelo. It is not meant to distract the need that many perceive to change the laws to accommodate Kelo. In Utah, even though we have an ombudsman, the Utah state legislature was the first one in the nation, it actually happened after there were arguments but before the decision was made in Kelo, to strip the power of condemnation from all redevelopment agencies in the state of Utah. They didn't just say, you can only use it for blight. They said, you can't use it. So, if I am to understand correctly, a survey that was done for the National Association of Realtors, Utah, therefore, is the only state in the nation right now where not even blight cuts it. That is, redevelopment agencies have no power of eminent domain. Now, that might have been a fluke when it happened, and it is a long story as to how it happened, but basically the public fear over Kelo has locked that in to the tune that even the government hawks in Utah, those who really would like to see it restored, have given up on any effort to put it back. Basically they are saying they have to come up with some anecdotes about how greedy mean property owners have stopped the public good before they will even dare advance to the legislature to try to get it restored. In Utah it had a big effect.

Just a quick summary. One of the questions we often get is, why do we need another federal agency? Why do we need a property rights ombudsman? These are my thoughts. What is a person supposed to do? What is a property owner supposed to do? The government pays all this money to provide negotiators, project managers, even litigators to take on the property owner when they don't agree with the project, but the property owner has nowhere to go other than groups like this, which, of course, can be very helpful, very supportive, or their own attorney. I'm running out of ideas here. Their own resources. So it doesn't seem unusual to me or unnecessary building into government structures some means of self-restraint, some device that would help put some kind of reality check in the process. It is not meant to be another government agency. As someone who worked in the legislature when I was in the legislature to try to stop that kind of stuff, I am sensitive to that. But our experience in Utah in eight years is that government is smaller. The litigation section of the attorney general's office is less busy. There is less net money going into litigation, and we have done a shift of responsibility. We haven't increased the size of government. We would not eliminate auditors or inspectors general, because they are also government agencies. There has to be some check and balance. And why in our country would we fund the courts so liberally, the least efficient, most abrasive, most expensive method of solving problems and then not put any money toward other systems when people want to use them. That would be so much more user-friendly and helpful.

I Googled the words "property rights ombudsman" the other day and got 381 hits. The mayor of Hartford has called for it. I am appearing before the Hartford General Assembly Committee on Environmental Planning on Tuesday night to talk about this concept. It has been talked about in other states. I know Carol has mentioned it here in New York(1), but I was just fascinated by it. In this blog there was some discussion about creating an ombudsperson and one of the bloggers said, "That's what we need, another government agency, throw more money at them, and all this stuff." They said, "Just pass, if Congress would just pass the Kelo-related legislation that will take care of it." Well, let me tell you why, I mean I certainly don't discount the idea that we need it, but consider this option. This will be my thought, which I will leave you with a little chill down your back to understand why this may still be necessary.

After Utah had stripped the power of eminent domain away from redevelopment agencies, I got a call from a redevelopment agency. They said, now, you are still ordering that second appraisal, aren't you? I said, well, no. You have lost the power of eminent domain. You can't condemn anymore. Hello! He said, well, we have tweaked the project. I said, well, you tweaked the project? He said, yeah, it so happens that we've got to have a street through that holdout. So it is not economic development. It is a public street. So all you have to do in his mind is design your projects so your economic developments are where the willing property owners are and your streets and sewers run through the holdouts and the projects roll forward. On that note, we need all the friends we can get. Here is one way to try to get a few. Thanks.

Notes

(1) In December 2005, Assemblyman Richard L. Brodsky pre-files a 2006 bill to establish the office of Eminent Domain Ombudsman in the New York State Department of Transportation. The New York ombudsman would be modeled after the Utah State Property Rights Ombudsman.

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