Supreme Court Watch: The Wonderland's Rabbit Hole and Other Conundrums

Vol. 36 No. 3

By

Sophia M. Stadnyk is a lawyer and writer with extensive experience in local government and municipal law. She is admitted to the bar in jurisdictions in the United States and Canada.


The Supreme Court has recently ruled on a case summarized in the winter issue’s column, Arkansas Game & Fish Comm’n v. United States, 133 S. Ct. 511, 568 U.S. ___ (2012). The Commission had sued the United States, alleging that six years of temporary water releases from a dam operated by the U.S. Army Corps of Engineers into the Commission’s management area, causing timber loss and other damage, constituted a taking of property. The issue before the Court was whether government actions that imposed recurring, but temporary, flood invasions were sufficient to constitute a “taking” of property within the meaning of the Takings Clause. The court below, the U.S. Court of Appeals for the Federal Circuit, had held that they did not. Relying on Sanguinetti v. United States, 264 U.S. 146, 150 (1924), it held that government-induced flooding could give rise to a taking claim only if a permanent condition of flooding or some other kind of inevitable overflow existed.

In an opinion by Justice Ginsburg, the eight-member Court hearing the case unanimously reversed and remanded. Although “no magic formula enable[d] a court to judge, in every case, whether a given government interference with property [was] a taking,” there were a “few invariable rules” that applied: a permanent physical occupation of property and a regulation that permanently required a property owner to sacrifice all economically beneficial uses of land constituted takings.1 To these, the Court added another—that a government action could be temporary in duration and could still amount to a compensable taking.

Because government-induced flooding can constitute a taking of property, and because a taking need not be permanent to be compensable, our precedent indicates that government-induced flooding of limited duration may be compensable. No decision of this Court authorizes a blanket temporary-flooding exception to our Takings Clause jurisprudence, and we decline to create such an exception in this case.2

Sanguinetti, the Court found, was distinguishable both on the facts and because no distinction between permanent and temporary flooding was material to its result. Moreover, to accept the government’s argument in this case and recognize a blanket exemption for flood invasions from temporary takings would not serve the public interest and would be unlikely to open the floodgates (as it were) to a “deluge” of liability claims.3

Accordingly, in analyzing the existence of such takings claims, the Court instructed that the timing and duration of the occupation were factors, as were the character of the land, “the degree to which the invasion [was] intended or [was] the foreseeable result of authorized government action,” the “severity of the interference,” and the “owner’s ‘reasonable investment-backed expectations’ regarding the land’s use.”4 In the instant case, a number of these factors were in dispute but had not been fully addressed by the court below. As a result, the case was remanded so that the challenged fact-findings, including those as to damages, could be properly dealt with.

Upcoming Cases

Exaction Takings; No Interest in Land But Money and Labor. Another and rather interesting takings case is pending before the Court: Koontz v. St. Johns River Water Mgmt. Dist., 77 So. 3d 1220 (Fla. 2011), cert. granted, 81 U.S.L.W. 3193 (U.S. Oct. 5, 2012) (No. 11-1447).

Mr. Koontz owned vacant land that was largely located within a Riparian Habitat Protection Zone. In 1994, he sought a permit from the St. Johns River Water Management District to allow him to develop, for commercial uses, a 3.7 acre portion. A District staffer agreed to recommend approval if Koontz would deed the rest of his property to the state for a conservation area and perform off-site mitigation on 50 acres of wetlands on the District’s property located between four and a half and seven miles away. Koontz agreed to the property dedication (almost 11 acres), but refused the condition of the off-site enhancement, which his expert estimated would cost between $90,000 and $150,000. According to Koontz, the District never demonstrated how the off-site requirement was related in any way to the alleged impact of Koontz’s proposed development. Koontz’s permit request was denied as a result. He brought an inverse-condemnation suit against the District, challenging only the off-site improvements condition as unconstitutional under the Fifth and Fourteenth Amendments, as interpreted in Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994).

The trial court held that a taking had occurred, as did Florida’s Fifth District Court of Appeal (although a dissenting judge there asked: “In what parallel legal universe or deep chamber of Wonderland’s rabbit hole could there be a right to just compensation for the taking of property under the Fifth Amendment when no property of any kind was ever taken by the government and none ever given up by the owner?”5).

On further appeal, the Supreme Court of Florida reversed, ruling that under the Takings Clauses of the U.S. and Florida Constitutions, the Nollan/Dolan rules on “essential nexus” and “rough proportionality” was applicable only “where the condition/exaction sought by the government involve[d] a dedication of or over the owner’s interest in real property in exchange for permit approval; and only when the regulatory agency actually issue[d] the permit sought, thereby rendering the owner’s interest in the real property subject to the dedication imposed.”6Because the District did not condition approval of the permit on Koontz dedicating his interest in real property in any way to public use, Nollan/Dolan did not apply. Even assuming theNollan/Dolan test did apply to nonreal property exactions, Koontz would still fail in his exactions challenge because the District did not issue any permits, Koontz never expended funds toward the performance of off-site mitigation, and nothing was ever taken from him. “As noted by the United States Supreme Court, Nollan and Dolan were not designed to address the situation where a landowner’s challenge is based not on excessive exactions but on a denial of development. . . . Here, all that occurred was that [the District] did not issue permits for Mr. Koontz to develop his property based on existing regulations and, therefore, an exactions analysis [did] not apply.”7

The questions before the Supreme Court center on the scope of exactions takings—specifically, whether a government can be held liable for a taking when it refuses to issue a land-use permit on the sole basis that the applicant did not accede to a permit condition that, if applied, would violate the essential nexus and rough proportionality tests set out in Nollan andDolan; and whether the Nollan/Dolan tests apply to a land-use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property to a public use.

Nonresidents and Access to Records. In McBurney v. Young, 667 F.3d 454 (4th Cir. 2012), cert. granted, 81 U.S.L.W. 3193 (U.S. Oct. 5, 2012) (No. 12-17), the Court will address the question of whether, under the Privileges and Immunities Clause of Article IV and the dormant Commerce Clause, a state may preclude citizens of other states from enjoying the same right of access to public records that the state affords its own citizens.

The statute at issue, the Virginia Freedom of Information Act (VFOIA), contains a provision that “all public records shall be open to inspection and copying by any citizens of the Commonwealth during the regular office hours of the custodian of such records. Access to such records shall not be denied to citizens of the Commonwealth . . . .”8 Two out-of-state applicants were denied access to information under the VFOIA on the basis that they were both noncitizens of Virginia. McBurney was a citizen of Rhode Island, although he had ties to Virginia as his former residence through divorce, child custody, and child support decrees adjudicated in that state, and his FOI requests related to documents regarding delays in the collection of his ex-spouse’s child support payments. The other applicant, Hurlbert, was a citizen of California and ran a business that aggregated real-property tax assessment information for clients throughout the country. Both men brought an action under 42 U.S.C. § 1983, seeking declaratory and injunctive relief on the basis that the citizens-only provision impermissibly discriminated against them by denying them access to public records solely because they were not Virginia citizens, in violation of the federal Privileges and Immunities Clause (“The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.”). By limiting access to government records, the applicants argued the VFOIA denied them equal access to information, equal access to courts, the ability to pursue their economic interests on equal footing with state residents, and the right to participate in Virginia’s governmental and political processes. Hurlbert raised a separate Commerce Clause claim alleging that the citizens-only provision violated the dormant Commerce Clause because it negatively affected his ability to pursue his business in Virginia on substantially equal terms as Virginia citizens.

The Fourth Circuit dismissed the appeal, finding that the VFOIA survived these constitutional challenges. It noted, first, that the range of “fundamental rights” protected under the Privileges and Immunities Clause was a narrow one and covered four general categories (which did not include a “right of access to information”). Only two of these asserted rights—the right to access courts and the right to pursue a common calling—were implicated in this case. The VFOIA, however, was entirely unrelated to trade or professional requirements. It “did not regulate anyone’s qualifications or prerequisites to enter into or engage in any profession or trade within Virginia,” establish a license, fee, or other burden to nonresidents entering or engaging in a profession, nor did it “act as a wholesale barrier to entering a business.”9 At most, it had the effect of limiting one method by which Hurlbert could carry out his business. As such, it did not implicate the right to pursue a common calling in Virginia. Regarding the right of a citizen of one state to access the courts of another state, access to courts had “never been interpreted to mean that states must provide individuals with access to public records that may or may not lead to discovery of a potential legal claim,”10 and “access to public records as part of the preparation for possible litigation [was] not ‘sufficiently basic to the livelihood of the Nation’ so as to fall within the protection of the Privileges and Immunities Clause.”11 Last, the Commerce Clause argument failed because it was “not enough that a statute discriminate[d] on the basis of citizenship for it to offend dormant Commerce Clause principles. Rather, the challenged statute had to discriminate ‘against interstate commerce’ or ‘out-of-state economic interests,’” and nothing in the VFOIA met this requirement.12

Telecommunications, the FCC, and Chevron Deference. In 2008, CTIA—The Wireless Association filed a petition for a declaratory ruling with the Federal Communications Commission (FCC) regarding the interpretation of 47 U.S.C. § 332(c)(7) of the Telecommunications Act of 1996 (TCA). This provision restricts the land use and zoning power of state and local governments over decisions regarding the placement and construction of wireless communications facilities and seeks to remove certain impediments to the construction and modification of such facilities. The CTIA’s petition requested that the FCC: provide guidance on what constituted a “failure to act” by a state or local government, on a request to place, construct, or modify such facilities; deem an application granted in the event no final action was taken within the suggested 45- and 75-day time periods of an application; prevent state and local governments from raising, as a defense, the existence of another provider within the same market, in applying a provision that barred state and local governments from taking action that would “prohibit or have the effect of prohibiting the provision of personal wireless services”; and declare that the TCA preempted any ordinance that automatically required a wireless carrier to seek a variance, regardless of the type and location of the wireless siting proposal. States and local governments argued that the FCC had no jurisdiction to issue any ruling under 47 U.S.C. § 332(c)(7) apart from a ruling on radio-frequency emissions, because Congress intended for the courts to have exclusive jurisdiction over all other disputes arising under that section.

In 2009, the FCC issued the Declaratory Ruling13 in which it granted in part and denied in part CTIA’s petition. It included a determination that a lack of a decision within 90 days for personal wireless service facility siting applications requesting collocations, and 150 days for all other applications, would be deemed a “failure to act.” Several entities subsequently filed a petition for reconsideration, and the City of Arlington, Texas, filed a petition for review of the Declaratory Ruling in the Fifth Circuit on the basis that the FCC lacked the statutory authority to establish the 90- and 150-day timeframes; had abused its discretion and acted in an arbitrary and capricious way; and had violated the Administrative Procedure Act (APA). The FCC, in the meantime, rejected the petition for reconsideration.

The issue before the Fifth Circuit was whether the FCC had jurisdiction to implement 47 U.S.C. § 332(c)(7) and, consequently, the extent to which judicial deference under Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), applied. The court denied the city’s petition, concluding that, although it was “clear” that Chevron review did not apply once it was determined that an agency lacked the authority to interpret a statute, it would apply Chevron to an agency’s interpretation of its own statutory jurisdiction. Section 332(c)(7) was ambiguous about the FCC’s authority to establish the 90- and 150-day timeframes, and given this ambiguity, the court was required to “defer to the agency’s resolution of the question if the agency’s interpretation [was] based on a permissible construction of the statute.”14 Accordingly, Chevron required it to defer to the FCC’s own assessment of its jurisdiction. The case is City of Arlington, Texas v. FCC, 668 F.3d 229 (5th Cir. 2012), cert. granted, in part, 81 U.S.L.W. 3193 (U.S. Oct. 5, 2012) (No. 11-1545).

The petitioner city’s brief, as does at least one amicus brief in support, points out that the Fifth Circuit’s decision did not follow the “proper analytical path” by not looking for and finding any sign of a clear congressional intent to delegate authority for the FCC to clarify any ambiguity, before deferring to the agency’s interpretation,15 and that questions of agency jurisdiction are questions of law for the courts to resolve at first instance.16 The issue of whether a court should apply Chevron to review an agency’s determination of its own jurisdiction came before the Supreme Court for argument in January.

Endnotes

1. 133 S. Ct. 511, 518 (2012).

2. Id. at 519.

3. Id. at 521.

4. Id. at 522−23.

5. St. Johns River Water Mgmt. Dist. v. Koontz, 5 So. 3d 8, 20 (Fla. Dist. Ct. App. 2009) (“Koontz IV”) (Griffin, J., dissenting).

6. 77 So. 3d 1220, 1230 (Fla. 2011).

7. Id. at 1231.

8. Va. Code Ann. § 2.2-3704(A) (2011).

9. 667 F.3d 454, 464 (4th Cir. 2012).

10. Id. at 467.

11. Id.

12. Id. at 469.

13. 24 FCC Rcd. 13,994 (Nov. 18, 2009).

14. 668 F.3d 229, 252 (5th Cir. 2012).

15. See e.g., Brief amici curiae of Cato Institute, et al., filed Nov. 26, 2012, at 15, and Brief of Petitioners City of Arlington, Texas, et al., filed Nov. 19, 2012, at 21.

16. Brief amici curiae of Cato Institute, et al., filed Nov. 26, 2012, at 15.

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