Legal News « Disasters, Property, and Politics

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US Supreme Court Rules for Property Owners in Unanimous Decision

It’s a good day to post because the US Supreme Court handed down its widely anticipated decision in USACE v. Hawkes.

This is part of constellation of cases involving the EPA’s understanding of how it will interpret and implement regulations concerning “the waters of the US”. In this particular case, the issue of “jurisdictional determination” concerning whether or not an owner has “waters of the US” present on their property. While this is an issue that is complex in part because it’s sometimes difficult to know whether or not such waters are present, in the facts of the case the US Army Corps of Engineers had defined “waters of the US” to include “all wetlands that that “use, degradation or destruction of which could affect interstate or foreign commerce” (33 CFR Section 328.8(a)(3)). The Corps would make a “jurisdictional determination” (binding for five years) to specify whether the waters on a property were “waters of the US”. There are two types of jurisdictional determinations (JDs): one is “preliminary”, and the other is “approved”. The “preliminary” JD lets the property owner know that there may be “waters of the US” on their property. However, the “approved” JD states that such waters do in fact exist, and impacts permitting process for land use.

The question posed in Hawkes is whether the “approved jurisdictional determination” is a “final decision”. The Government argued that the “approved” JD was not “final” because it could be revised. However, the Court found that it was final because it had legal effects; and that as such, it could be appealed as a “final agency action”. This potentially will save property owners a great deal of time in a permitting process and provide with an opportunity to receive scrutiny on a decision that could have very important long term consequences for their use of the land.

The Court ruled unanimously in their decision, though the concurrences suggest that there were some differences of opinion in the specifics the case. Chief Justice Roberts, writing for the Court, explains that in the Court’s view the revised (“approved”) JD is a final agency action, which makes the reviewable by courts. He explains that there are two conditions that the Court considers when they determine whether an agency action is “final” under the Administrative Procedure Act. First, the action must “mark the consummation of the agency’s decisionmaking process — it must not be of a merely tentative or interlocutory nature. And second, the action must be one of which rights or obligations have been determined, or from which legal consequences will flow” (Hawkes Slip Opinion, p. 5). The Court determined that both conditions were met. You can read the full Slip Opinion here: USACE v. Hawkes Slip Opinion.

There were concurrences in the case, but I found the concurrence filed by Kennedy, Alito and Thomas particularly important, though not so much because of any doctrinal discussion in the decision. It reiterates what the Court says in the majority opinion and I found it especially interesting since Kennedy is its author, and usually considered a moderate conservative on the Court. He was the author of the same sex marriage decision from last summer, and has been the swing vote in cases involving many other highly contested issues. Here, he finishes his concurrence with this paragraph, which I found particularly insightful concerning matters on the minds of the eight justices serving on the current Court:

“The Act, especially without the JD procedure were the Government permitted to foreclose it, continues to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.” (Hawkes Slip Opinion Concurrence, p. 2).

Indeed. But I don’t think it’s the Act itself that’s the problem — it’s the way it’s being interpreted and implemented, particularly currently, that has been especially disconcerting. So, I’ll keep an eye out for the rest of the waters of the US cases, and will try to blog updates when I have them. Let me direct readers, as I have in the past, to Leland Beck’s excellent blog, which tracks these issues in useful and lucid ways as well.

Editor’s note, 6/1/2016: I had to do a bit of editing here in light of a second review of the decision, and will be looking more closely at the various concurrences in the case. Stay tuned for a post with more analysis!

In Other DPP News…

In the meantime, watch for a few changes here. With the help of one of my students at Southeast Missouri State, Wesley Cox, we have a page under construction that will provide links to various resources for rural communities that are undergoing the stressful process of recovery, or are working through emergency management plans to help themselves be more resilient should a disaster strike. That page should be up and running in the next few weeks. I’ll post when it’s ready. In the meantime, if any readers have resources they’d like me to add or check out, please email me at dpphatcher@gmail.com.

I’ll also be traveling to New Orleans this coming week to attend the Law and Society Association Annual Meeting. This is always a fun meeting, and I’m looking forward to seeing some of my former students and lots of wonderful colleagues from all over the world. I’m also taking my camera and my notebook. After all, whenever I drive along the Mississippi, there are things to see, photograph and write about!

So, as posted earlier, this the morning US Supreme Court handed down a fascinating takings decision in Horne v. Department of Agriculture. I think as both Logan and I work through the decision, we’ll do a series of posts. Logan had written about the case as it made its way through the courts (you can find those posts here and here).

Here are some of the highlights from Chief Justice Roberts majority opinion (all quotes come from the Horne Slip Opinion, which I’ll just identify as “Slip Opinion”):

The Court determined, contrary to the Government’s argument and a decision by the Ninth Circuit, that first, personal property is as protected as real property from being taken. To quote the Chief Justice, “The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes you home” (Slip Opinion, p. 5). There’s a lengthy discussion in the decision concerning the history of the takings clause and why agricultural crops, in particular, have featured in that history.

Toward the end of that historical discussion, Chief Justice Roberts writes,

“According to the author of the first treatise on the Constitution, St. George Tucker, the Takings Clause was ‘probably’ adopted in response to ‘the arbitrary and oppressive mode of obtaining supplies for the army, and the public uses by impressment, as was too frequently practiced during the revolutionary war, without any compensation whatever.’ [citing Blackstone’s Commentaries] (Slip Opinion, p. 6).

This brings the Chief Justice to the distinction between regulatory and physical takings, which for the majority is very important in this case. They see appropriation of raisins as a physical taking of private property rather than a regulatory taking. This matters because the constitutional rules around physical takings are pretty simple: if the government physically takes property, just compensation is due. However, it’s more complicated with regulatory takings, which Chief Justice Roberts says are more flexible and more forgiving than the jurisprudence around physical takings. Indeed, regulatory takings cases require, under Lucas v. South Carolina Coastal Council, a “total wipe-out” of value before they require just compensation.

Again, quoting from today’s decision:

“Lucas, however, was about regulatory takings, not direct appropriations. Whatever Lucas had to say about reasonable expectations with regard to regulations, people still do not expect their property, real or personal, to be actually occupied or taken away. Our cases have stressed the ‘longstanding distinction’ between government acquisitions of property and regulations… The different treatment of real and personal property in a regulatory case suggested by Lucas did not alter the established rule of treating direct appropriations of real and personal property alike.”

The distinction provides the Court with the basis for overturning the Ninth Circuit’s opinion because the Ninth Circuit had used Lucas to decide Horne — and today, the Court says that this was the wrong line of precedents to apply in deciding a case involving the physical taking of personal property (i.e., the raisins).

There’s a few things that I find especially interesting in the decision: first, there’s a strong implication that the Supreme Court would have seen a regulation that limited production of raisins differently than a law that required the surrender of already produced raisins to the government. Chief Justice Roberts writes,

“A physical taking of raisins and a regulatory limit on production may have same economic impact on a grower. The Constitution, however, is concerned with means as well as ends. The Government has broad powers, but the means it uses to achieve its ends must be ‘consistent with the letter and spirit of the constitution.’ [citing McCulloch v. Maryland]”.

The issue that matters to the Court in Horne is that the raisins were actually physically taken from the owners. Or would have been, had the Hornes complied with the law (which they did not — and were fined the market value of the raisins ($438,000) plus an additional $200,000 for breaking the law by not surrendering the raisins — something the majority says they did not understand they were required to do).

That brings me to another interesting point: the Chief Justice mentions more than once that this program is mandatory and not voluntary. Chief Justice Roberts says that had it been voluntary, of course, there would be no taking. This is also interesting… Between this and the language around a regulatory limit on production vs. a taking of produce, I wonder if there are not hints here concerning what the Court thinks would be an acceptable way to control the raisin market… But that’s just a thought that ran through my mind as I read through the case. There is no indication that the majority were sending such signals to Congress in the actual text.

While the 8-1 decision (Justice Sotomayor was the lone dissenter) on the issue of whether the raisins were taken seems to really hinge on the idea that the raisins are personal property that was physically taken away and is pretty straight forward, the decision becomes a little more complicated on the issue of just compensation. On the issue of determining what just compensation is, the Court split 5-4. In the minority, three of the four (Justices Breyer, Ginsburg and Kagan) wanted the case to be remanded back to the Ninth for an inquiry into whether the price of the raisins in the years that were of concern in the case would have yielded just compensation to the Hornes for the loss of their raisins. Chief Justice Roberts and four other members (Scalia, Kennedy, Thomas and Alito) decided, however, that in levying a fine of the market value of the raisins, the Government had already determined what the just compensation should be. That just compensation should be the market value of the raisins. Moreover, they were concerned because the value of the raisins is itself set by “the taker”, i.e., the Government. This was clearly an issue for the 5 who believed that the market value assessed by the Government was the best way to go. The implication, from my reading, is that they did not want to leave it to the Government to decide whether “just compensation” had been provided by the price of the raisins. I’ll go into that issue when I discuss the concurrence in another post. Therefore, the Supreme Court said today the Hornes do not owe the fine to the Government.

One last interesting note: in deciding not to remand the case, the Chief Justice points out that the case had been nearly a decade in litigation, and that it was time for the matter to be settled. He should know a lot about takings cases that take a long time — he was the lawyer that argued Tahoe Sierra Preservation Council v. Tahoe Regional Planning Agency for the agency (i.e., the regulator — yes, he was a hired gun at one time in his life). In that case, which is cited more than once in today’s decision, the litigation had taken so long to make its way to the Supreme Court that many of the original land owners involved in the lawsuit had passed away and their heirs were left to see the litigation through. I’ve mentioned as well that sometimes these cases start to feel a bit like the situation that Charles Dickens wrote about in Bleak House with regard to yet another takings case, Palazzolo v. Rhode Island. There is, indeed, something be said to seeing the end of a case, particularly for the litigations and especially when the courts are already overburdened with litigation. Perhaps that is a discussion for another day, but it is worth noting that the Court seems to be paying attention to the timeline in these takings disputes.