PLF wins landmark property rights case in California Supreme Court
 
 
August 23, 2004
 
The PLF Sentry - Commentary and News from Pacific Legal Foundation

Vol. 4, No. 5

PLF wins landmark property rights case in California Supreme Court

In a major PLF victory, the California Supreme Court has told the County of Santa Cruz -- and by extension, all governmental entities in the state -- that property owners cannot be denied their day in court if they are hit with legally questionable regulation of their land.

The case is Travis v. County of Santa Cruz. At issue was whether a property owner may challenge the legality of a land use regulation when it is applied to his property, even if the regulation was put on the books many years previously. The County of Santa Cruz said, No -- regulations have to be challenged at the time they're enacted; you can't go to court years later, when a regulation is applied to your property. Incredibly, a Court of Appeal took the county's side. That's when PLF sprang into action.

The case involved Santa Cruz County's rent control on second units, or "granny flats." Even though a 1996 state law outlaws rent control on new residential construction, the county has continued to enforce a 1981 local ordinance that requires rent control as a prerequisite for building a second unit.

When three local homeowners went to court after being hit with this rent control requirement, the city argued that they were too late -- that the only time to challenge the rent control rule (or any similar local land use condition) is within a short window after the law was enacted, or within a short period of time after it's preempted by a statewide law. After that window in time is closed, according to the county, nobody can challenge a local land use ordinance for being illegal on its face -- even if the ordinance directly violates state law.

After a Court of Appeal sided with the county against the property owners, Pacific Legal Foundation took over the case and represented the owners before the state Supreme Court -- and handed the county a complete loss. In its recent ruling in PLF's favor, "[t]he Supreme Court rejected the county's crabbed reading of law which would deny aggrieved landowners the opportunity to vindicate their rights and would insulate the county from judicial review," said PLF attorney Harold Johnson. The court declared that any time a legally questionable land use condition is imposed on private property, the owner has a right to challenge it as illegal, within 90 days of the regulation's application.

Underlying this entire case is the larger issue of the malignant effects of rent control itself. "In a community with a desperate need for new housing, the Santa Cruz rent restrictions only depress supply," said PLF's Johnson. "Who wants to provide rental housing if you can't earn a free market return?"

The Supreme Court ruling ensures that Santa Cruz County -- and other government jurisdictions -- can't escape judicial scrutiny when they slap restrictive regulations on private property. Said PLF's Johnson: "The Travis decision is a milestone because it says land use regulators aren't above the law."

Read "State Supreme Court Rules in Favor of Landowner" in the Santa Cruz Sentinel.


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Heeding PLF, Michigan [supreme] court [unanimously] dumps infamous eminent domain ruling


Earlier this month the Michigan Supreme Court unanimously overruled its two-decade-old precedent that allowed government to condemn private citizens' homes and give them to private companies. The new decision, which has nationwide implications for redevelopment agencies, restricts the use of eminent domain to the taking of property for the use of the public, not for the use of private corporations. PLF submitted a friend of the court brief urging just this result. The following is adapted from a PLF opinion piece that appeared recently in the Detroit Free-Press:

"Poletown" Condemnation Case Gets a Deserved Wrecking Ball
 
By PLF attorney Timothy M. Sandefur

One writer called it "the Dresden of eminent domain cases."

Two decades ago, Detroit's Poletown neighborhood was leveled to make way for a General Motors Corporation's auto plant.
 
Turned to rubble was an area of more than 1,200 homes, 140 businesses, six churches, and a hospital.

What was hailed as progress by some civic movers and shakers -- coincidentally, they tended to reside in other neighborhoods -- was seen somewhat differently by the blue collar homeowners who were forced to clear out of Poletown.
 
Many of the residents sued, but the wrecking balls were blessed by the Michigan Supreme Court in Poletown Neighborhood Council v. City of Detroit. This 1981 decision was immediately recognized as a turning point in American eminent domain law.

Homeowners argued that the Michigan Constitution allows government to take property only for a "public use" -- e.g., a public road, firehouse, or school.

But the Poletown court disagreed: It gave the word "public" a slippery and expansive definition -- stretching it to cover projects clearly owned and operated for private gain.
 
Because the GM plant would create jobs, the court reasoned that condemning people's homes at the behest of the auto giant was "public" enough.

Now, 23 years later, the Michigan Supreme Court has recognized that Poletown was a mistake.
 
In a case concerning Wayne County's attempt to condemn 1,300 acres near Detroit Metro Airport so private interests can build an office park, the court took the occasion to reverse Poletown and affirm that eminent domain should be used only to take property for the use of the public, not for the use of private corporations.

The justices recognized that the years have not been good to Poletown's reputation.
 
A long series of controversial government land grabs have looked to that case for inspiration.
 
Typically in these schemes, government muscle is flexed on behalf of the prosperous and powerful, while the property owners who get muscled out are not rich or politically connected.

For instance, Mississippi recently tried to condemn 23 acres of minority owned land to give to the Nissan Corporation.
 
Atlantic City, New Jersey, tried to take a widow's house so a Donald Trump casino could put up a parking lot.
 
[I]n California, the City of Cypress condemned church land to give Costco another store site.

Sometimes a business is asked -- or forced -- to move aside for a more politically favored enterprise. Merriam, Kansas, recently condemned a Toyota dealership to sell the land to a BMW dealer.
 
Mesa, Arizona, tried to transfer land owned by an auto shop to a hardware store.

The thinking seems to be that if a property owner isn't paying enough taxes, the city should sell their property to richer people who can pay more.

One problem with giving city planners a broad license to label property transfers as "public uses" is that while the bureaucrats can promise a lot, they can't guarantee it.
 
Some urban analysts now believe the Poletown teardown, and its dispersal of homeowners, hastened the decline of Detroit's core business region through the 1980s.

The Michigan Supreme Court's reversal of Poletown was consistent with precedents that preceded that infamous case.
 
A long line of decisions prior to 1981 rejected attempts to distort the concept of "public use."
 
As early as 1877, the state Supreme Court explained that the term cannot apply to every enterprise or initiative that benefits the public in any way. If every project that indirectly benefits the public is a "public use," government could rationalize its way to taking citizens' property for any business interest that asks.

Worse, influential groups can rig the system.
 
If government can take property from some people and give it to others, those with the best lobbyists will win, and property rights will be subject to the whims of politicians and the bidding of interest groups.
 
Government doesn't condemn wealthy neighborhoods or the homes of powerful politicians; it takes land from people who have little political pull.

Poletown-style planning would have horrified the authors of the U.S. and Michigan Constitutions.
 
They understood how the right to own property is essential for the protection of other freedoms.
 
Indeed, it is especially important to defend the property rights of the poor and marginalized minorities who have less political influence.

This is why Pacific Legal Foundation urged Michigan's high court to reconsider Poletown -- and now congratulates the court for returning to the clear intent of the Constitution: Government's authority to take private property should be strictly and carefully restrained.

This way, Michiganders won't hold their homes at the mercy of lobbyists and politicians.

PLF's Tim Sandefur has also written on the reversal of Poletown for National Review Online.


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Established in 1973, PLF is America's trusted champion of constitutional rights, fighting and winning decisive actions in the courts of law and the court of public opinion to rescue liberty from the grasp of government power. PLF is the oldest, largest and, in the words of the Washington Post, "perhaps most influential" public interest law foundation of its kind. PLF is a tax-exempt, charitable organization under Section 501(c)(3) of the Internal Revenue Code and relies entirely upon private donations for its support.