Articles Posted in Real Estate & Property Law

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Peat mining companies sought a Clean Water Act, 33 U.S.C. 1311(a), 1362, permit from the Army Corps of Engineers, to discharge material onto wetlands on property that they own and hope to mine. The Corps issued a jurisdictional designation (JD) stating that the property contained “waters of the United States” because its wetlands had a “significant nexus” to the Red River of the North, located 120 miles away. The district court dismissed their appeal for want of jurisdiction, holding that the JD was not a “final agency action for which there is no other adequate remedy,” 5 U.S.C. 704. The Eighth Circuit reversed. The Supreme Court affirmed. The Corps’ approved JD is a final agency action judicially reviewable under the Administrative Procedures Act. An approved JD clearly “mark[s] the consummation” of the Corps’ decision-making on whether particular property contains “waters of the United States.” It is issued after extensive fact-finding regarding the property’s physical and hydrological characteristics and typically remains valid for five years. The Corps describes approved JDs as “final agency action.” The definitive nature of approved JDs gives rise to “direct and appreciable legal consequences.” A “negative” creates a five-year safe harbor from governmental civil enforcement proceedings and limits the potential liability for violating the Act. An “affirmative” JD, like issued here, deprives property owners of the five-year safe harbor. Parties need not await enforcement proceedings before challenging final agency action where such proceedings carry the risk of “serious criminal and civil penalties.” The permitting process is costly and lengthy, and irrelevant to the finality of the approved JD and its suitability for judicial review. View "Army Corps of Eng'rs v. Hawkes Co." on Justia Law

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The Alaska National Interest Lands Conservation Act (ANILCA) set aside 104 million acres of land in “conservation system units,” to include “any unit in Alaska of the National Park System, National Wildlife Refuge System, National Wild and Scenic Rivers Systems, National Trails System, National Wilderness Preservation System, or a National Forest Monument,” 16 U.S.C. 3102(4), plus 18 million acres of state, Native Corporation, and private land. Sturgeon was piloting his hovercraft over the Nation River in the Yukon-Charley Rivers National Preserve, a conservation system unit managed by the National Park Service. Alaska law permits the use of hovercraft. National Park Service regulations, adopted under 54 U.S.C. 100751(b), do not. Rangers told Sturgeon that hovercraft were prohibited. Sturgeon protested that Park Service regulations did not apply because the river was owned by the state. Sturgeon complied, then filed suit. The Ninth Circuit affirmed summary judgment in favor of the Park Service. ANILCA provides: “No lands ... conveyed to the State, to any Native Corporation, or to any private party shall be subject to the regulations applicable solely to public lands within such units.” Public land is generally land to which the U.S. holds title.. The Ninth Circuit reasoned that the hovercraft regulation applied to all federal-owned lands and waters administered by the Park Service nationwide, so it did not apply “solely” within the units. The Supreme Court unanimously rejected that reasoning and vacated. ANILCA carves out numerous Alaska-specific exceptions to the Park Service’s general authority over federally managed preservation areas, reflecting that Alaska is often the exception, not the rule. The Court did not determine whether the Nation River qualifies as “public land” under ANILCA or whether the Park Service has authority to regulate Sturgeon’s activities on the Nation River. View "Sturgeon v. Frost" on Justia Law

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In 1854, the Omaha Tribe entered into a treaty with the United States to establish a 300,000-acre reservation and to “cede” and “forever relinquish all right and title to” its remaining land in present-day Nebraska for a fixed price. In 1865, the Tribe entered into another treaty, agreeing to sell land to the government for a fixed sum. In 1872, the Tribe sought to sell more land. Instead of a fixed-sum purchase, Congress authorized the Secretary of the Interior to survey, appraise, and sell tracts of reservation land to settlers and to deposit proceeds with the Treasury for the Tribe’s benefit. Congress took the same approach in 1882 with respect to roughly 50,000 acres of reservation land (22 Stat. 341). Peebles purchased land under the terms of the 1882 Act and established the village of Pender. In 2006, the Tribe sought to subject Pender retailers to tits amended beverage control ordinance pursuant to 18 U.S.C. 1161 (permitting tribes to regulate liquor sales on reservation land and in “Indian country”). Concluding that the 1882 Act did not diminish the Reservation, the district court ruled in favor of the Tribe. The Eighth Circuit and Supreme Court affirmed. Only Congress may diminish the boundaries of an Indian reservation, and its intent to do so must be clear. The 1882 Act had none of the common textual indications that express clear intent, but falls into a category of surplus land acts that “merely opened reservation land to settlement.” Although the Tribe has been absent from the disputed territory for more than 120 years, the Court stated that subsequent demographic history is the “least compelling” evidence; the justifiable expectations of non-Indians living on the land cannot alone diminish reservation boundaries. View "Nebraska v. Parker" on Justia Law

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The federal government provides low-income housing tax credits that are distributed to developers by state agencies, including the Texas Department of Housing and Community Affairs. The Inclusive Communities Project (ICP), which assists low-income families in obtaining affordable housing, brought a disparate-impact claim under Fair Housing Act sections 804(a) and 805(a), alleging that allocation of too many credits to housing in predominantly black inner-city areas and too few in predominantly white suburban neighborhoods resulted in continued segregated housing patterns. Relying on statistical evidence, the district court ruled in favor of ICP. While appeal was pending, HUD issued a regulation interpreting the FHA to encompass disparate-impact liability and establishing a burden-shifting framework. The Fifth Circuit held that disparate-impact claims are cognizable under the FHA, but reversed, concluding that the court had improperly required proof of less discriminatory alternatives. The Supreme Court affirmed and remanded. Disparate-impact claims are cognizable under the FHA. The Court noted that the statute shifts emphasis from an actor’s intent to the consequences of his actions. Disparate-impact liability must be limited so that regulated entities can make practical business choices that sustain the free-enterprise system. Before rejecting a business justification—or a governmental entity’s public interest—a court must determine that a plaintiff has shown “an available alternative . . . that has less disparate impact and serves the [entity’s] legitimate needs.” A disparate-impact claim relying on a statistical disparity must fail if the plaintiff cannot point to a policy causing that disparity. Policies, governmental or private, are not contrary to the disparate-impact requirement unless they are “artificial, arbitrary, and unnecessary barriers.” When courts find disparate impact liability, their remedial orders must be consistent with the Constitution and should concentrate on eliminating the offending practice. Orders that impose racial targets or quotas might raise difficult constitutional questions. View "Texas Dep't of Hous, & Cmity Affairs v. Inclusive Communities Project, Inc." on Justia Law

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The Agricultural Marketing Agreement Act authorizes the Secretary of Agriculture to promulgate orders to maintain stable markets for agricultural products. The marketing order for raisins established a Raisin Administrative Committee, which requires that growers set aside a percentage of their crop, free of charge. The government sells the reserve raisins in noncompetitive markets, donates them, or disposes of them by any means consistent with the purposes of the program. If any profits are left over after subtracting administration expenses, the net proceeds are distributed back to the growers. In 2002–2003, growers were required to set aside 47 percent of their raisin crop; in 2003–2004, 30 percent. The Hornes refused to set aside any raisins on the ground that the reserve requirement was an unconstitutional taking of their property for public use without just compensation. The government fined them the fair market value of the raisins, with additional civil penalties. On remand from the Supreme Court, the Ninth Circuit held that the requirement was not a Fifth Amendment taking. The Supreme Court reversed. The Fifth Amendment requires that the government pay just compensation when it takes personal property, just as when it takes real property. The reserve requirement is a clear physical taking. Actual raisins are transferred. Any net proceeds the growers receive from the sale of the reserve raisins goes to the amount of compensation, but does not mean the raisins have not been taken. This taking cannot be characterized as part of a voluntary exchange for a valuable government benefit. The ability to sell produce in interstate commerce, while subject to reasonable government regulation, is not a “benefit” that the government may withhold unless growers waive constitutional protections. The Court noted that just compensation can be measured by the market value the government already calculated when it fined the Hornes. View "Horne v. Dep't of Agriculture" on Justia Law

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Exactly three years after borrowing money to refinance their home mortgage, the Jesinoskis sent the lender a letter purporting to rescind the transaction. The lender replied, refusing to acknowledge the rescission’s validity. One year and one day later, the Jesinoskis filed suit, seeking a declaration of rescission and damages. The district court entered judgment on the pleadings, concluding that a borrower can exercise the Truth in Lending Act’s right to rescind, 15 U. S. C.1635(a), (f), only by filing a lawsuit within three years of the date the loan was consummated. The Eighth Circuit affirmed. The unanimous Supreme Court reversed. A borrower exercising his right to rescind under the Act need only provide written notice to his lender within the 3-year period, not file suit within that period. Section 1635(a)’s language: a borrower “shall have the right to rescind . . . by notifying the creditor . . . of his intention to do so,” indicates that rescission is effected when the borrower notifies the creditor of his intention. The statute says nothing about how that right is exercised and does not state that rescission is necessarily a consequence of judicial action. View "Jesinoski v. Countrywide Home Loans, Inc." on Justia Law

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The Agricultural Marketing Agreement Act of 1937 (AMAA), enacted to stabilize prices for agricultural commodities, regulate “handlers,” defined as “processors, associations of producers, and others engaged in the handling” of covered agricultural commodities, 7 U.S.C. 608c(1). The California Raisin Marketing Order, promulgated under the AMAA, established a Raisin Administrative Committee, which recommends annual reserve pools of raisins not to be sold on the open domestic market and requires handlers to pay assessments to help cover administrative costs. The petitioners, raisin producers, refused to surrender requisite portions of raisins to the reserve. The USDA began administrative proceedings. An ALJ found that petitioners were handlers and had violated the AMAA and the Order, and rejected a takings defense. The district court entered summary judgment for the USDA. The Ninth Circuit affirmed. A unanimous Supreme Court reversed, holding that the Ninth Circuit had jurisdiction to decide the takings claim. Petitioners argued that they were producers, not subject to the AMAA or the Order, but the USDA and the district court concluded that they were handlers. Fines and penalties were levied on them in that capacity. Their takings claim, therefore, was necessarily raised in that capacity. The Ninth Circuit confused a statutory argument that they were producers with a constitutional argument that, if they were handlers, their fine violated the Fifth Amendment. The claim was ripe. The petitioners were subject to a final agency order; because the AMAA provides a comprehensive remedial scheme that withdraws Tucker Act jurisdiction over a handler’s takings claim, there is no alternative remedy. View "Horne v. Department of Agriculture" on Justia Law

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Robers, convicted of submitting fraudulent mortgage loan applications to two banks, argued that the district court miscalculated his restitution obligation under the Mandatory Victims Restitution Act of 1996, 18 U.S.C. 3663A–3664, which requires property crime offenders to pay “an amount equal to ... the value of the property” less “the value (as of the date the property is returned) of any part of the property that is returned.” The court ordered Robers to pay the difference between the amount lent to him and the amount the banks received in selling houses that had served as collateral. Robers argued that the court should have reduced the restitution amount by the value of the houses on the date on which the banks took title to them since that was when “part of the property” was “returned.” The Seventh Circuit and a unanimous Supreme Court affirmed. “Any part of the property ... returned” refers to the property the banks lost: the money lent to Robers, not to the collateral the banks received. Because valuing money is easier than valuing other property, this “natural reading” facilitates the statute’s administration. For purposes of the statute’s proximate-cause requirement, normal market fluctuations do not break the causal chain between the fraud and losses incurred by the victim. Even assuming that the return of collateral compensates lenders for their losses under state mortgage law, the issue here is whether the statutory provision, which does not purport to track state mortgage law, requires that collateral received be valued at the time the victim received it. The rule of lenity does not apply here. View "Robers v. United States" on Justia Law

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The General Railroad Right-of-Way Act of 1875 provides railroad companies “right[s] of way through the public lands of the United States,” 43 U.S.C. 934. One such right of way, created in 1908, crosses land that the government conveyed to the Brandt family in a 1976 land patent. That patent stated that the land was granted subject to the right of way, but it did not specify what would occur if the railroad relinquished those rights. A successor railroad abandoned the right of way with federal approval. The government sought a declaration of abandonment and an order quieting its title to the abandoned right of way, including the stretch across the Brandt patent. Brandt argued that the right of way was a mere easement that was extinguished upon abandonment. The district court quieted title in the government. The Tenth Circuit affirmed. The Supreme Court reversed. The right of way was an easement that was terminated by abandonment, leaving Brandt’s land unburdened. The Court noted that that the government had argued the opposite position in an earlier case. In that case, the Court found the 1875 Act’s text “wholly inconsistent” with the grant of a fee interest. An easement disappears when abandoned by its beneficiary. View "Marvin M. Brandt Revocable Trust v. United States" on Justia Law

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In 1972 Koontz bought 14.9 undeveloped acres. Florida subsequently enacted the 1972 Water Resources Act, requiring a permit with conditions to ensure that construction will not be harm water resources and the 1984 Henderson Wetlands Protection Act, making it illegal to “dredge or fill in, on, or over surface waters” without a wetlands permit. The District with jurisdiction over the Koontz land requires that applicants wishing to build on wetlands offset environmental damage by creating, enhancing, or preserving wetlands elsewhere. Koontz decided to develop 3.7-acres. In 1994 he proposed to raise a section of his land to make it suitable for building and installing a stormwater pond. To mitigate environmental effects, Koontz offered to foreclose development of 11 acres by deeding to the District a conservation easement. The District rejected Koontz’s proposal and indicated that it would approve construction only if he reduced the size of his development and deeded a conservation easement on the larger remaining property or hired contractors to improve District wetlands miles away. Koontz sued under a state law that provides damages for agency action that constitutes a taking without just compensation. The trial court found the District’s actions unlawful under the requirements of Nollan v. California Coastal Commission and Dolan v. City of Tigard, that the government may not condition permit approval on the owner’s relinquishment of a portion of his property unless there is a nexus and rough proportionality between the demand and the effects of the proposed use. The court of appeal affirmed, but the Florida Supreme Court reversed. The U.S. Supreme Court reversed and remanded, holding that a governmental demand for property from a land-use permit applicant must satisfy the Nollan/Dolan requirements even when it denies the permit. The Nollan/Dolan standard reflects the danger of governmental coercion in the land-use permitting context while accommodating the legitimate need to offset public costs of development through land use exactions. It makes no difference that the Koontz property was not actually taken. It does not matter that the District might have been able to deny Koontz’s application outright without giving him the option of securing a permit by agreeing to spend money improving public lands. Even a demand for money from a land-use permit applicant must satisfy the Nollan/Dolan requirements; there is a direct link between the demand and a specific parcel of real property. The Court rejected arguments that applying Nollan/Dolan scrutiny to money exactions will leave no principled way of distinguishing impermissible land-use exactions from property taxes, stating that its holding “will not work a revolution in land use law or unduly limit the discretion of local authorities to implement sensible land use regulations.” View "Koontz v. St. Johns River Water Mgmt. Dist." on Justia Law