The Omnibus

NEWS AND NOTES FROM THE LAWYERS AT PRATT-THOMAS WALKER.


Welcome to the 'law blog' of Pratt-Thomas Walker. In addition to regular updates and news from our practice areas, partner, Andy Gowder, holds court on 'Grounded' - a special topic area dealing with land use rights and other matters.

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Local Motorcycle Helmet Ordinance Pre-empted by State law

The South Carolina Supreme Court recently decided in Aakjer v City of Myrtle Beach that the City of Myrtle Beach’s Helmet Ordinance, drafted in response to large motorcycle rallies in Myrtle Beach, was invalid because it was preempted by existing state statutes that already require motorcycle drivers to wear helmets and goggles or protective shields.
At issue was whether a local ordinance passed by the City of Myrtle Beach requiring motorcycle riders to wear a helmet and protective eye wear was enforceable and could serve as the basis of citations issued by Myrtle Beach police, to be adjudicated before Municipal Judges.  Petitioners, all of whom were cited for failing to wear helmets and eye protection in the City, filed a lawsuit in the original jurisdiction of the South Carolina Supreme Court to determine whether the Helmet Ordinance was preempted by state law and whether the City, by repealing parts of the more comprehensive Motorcycle Ordinance, also impliedly repealed the Helmet Ordinance portion.
In determining the validity of a local ordinance, the courts examine whether the local government has the power to enact an ordinance and if it does, whether the ordinance is consistent with the state’s constitution and with the statutes and common law of the state.  The Court also pointed out that an ordinance is preempted under “implied field preemption” when the state statutory scheme “so thoroughly and pervasively covers the subject as to occupy the field or when the subject requires statewide uniformity. “
The Supreme Court pointed out that in this case, a local ordinance specifying what protective gear is required to operate a motorcycle must necessarily be uniform statewide, because if it were otherwise, “riders would need to familiarize themselves with the various ordinances in advance of a trip, so as to ensure compliance.  Riders opting not to wear helmets or eye wear in other areas of the state would be obliged to carry the equipment with them if they intended to pass through a city with a Helmet Ordinance.”  These burdens would “unduly limit a citizen’s freedom of movement throughout this state.  Consequently, the Helmet Ordinance must fail under the doctrine of implied preemption.”
The Court also went on to point out that when the City repealed a section of the Motorcycle Ordinance that dealt with how violations of the Ordinance would be decided (eliminating the original administrative tribunal) the City had impliedly repealed the Helmet Ordinance and so, for that reason as well, the Ordinance was invalid.
Though South Carolina is a home rule state, there will continue to be circumstances, such as the Helmet Ordinance, in which the Supreme Court will determine that there is a need for statewide uniformity and invalidate local ordinances that conflict with state statutes passed in Columbia.  The Court must strike a continuing balance between the necessity of having central control and uniformity in some instances with the desirability of having local issues decided by local governments.

PTW in Forbes

The May 24th issue of Forbes magazine features a profile on Pratt-Thomas Walker, highlighting the firm’s agility and our strong commercial litigation practice. In case you missed it, click here:  Forbes

Walker admitted to American College of Trial Lawyers

Pratt-Thomas Walker managing shareholder, Trenholm Walker, was one of 129 fellows inducted in the prestigious American College of Trial Lawyers at the College’s 2009 annual meeting in Boston. This honor is extended by invitation only, after stringent peer review. Fellows are experienced trial lawyers who have become masters of the art of advocacy, and their careers reflect the highest standards of professional excellence, ethics, civility and collegiality.

Founded in 1950, the College and its members represent the best of the trial bar from the United States and Canada, and by including attorneys from both the plaintiff and defense realms, the ACTL speaks with a balanced voice on issues affecting the legal profession. Its mandate is to “improve and elevate the standards of trial practice, the administration of justice, and the ethics of the profession.”

Live from the ABA Spring Meeting: Water Supply in a Time of Climate Change

The second outstanding program at the ABA Spring Meeting was a panel sponsored by the SLG Environmental Law Committee entitled: “Water Supply in a Time of Climate Change.”

The panel was moderated by Michelle Diffenderfer, with the West Palm Beach, Florida office of Lewis Longman & Walker, P.A. where her practice includes seeking consumptive use permits for local governments, Native American tribes and others.

Michelle outlined the basic differences between Western and Eastern water law and how both strains were blended in the law in Florida.

The “Western Way” is based on prior appropriation.  Water is a property right and belongs to the land owner, not the state.  The principle can be summarized as “first in time, first in right,”   and those rights date back to the first settlers.  As long as those owners are using the water for “beneficial use” the law maintains that use as long as the use lasts, to the extent of the use. What this encourages is, of course, ongoing, substantial use.  There are fights under this system around whether the use is, in fact, beneficial and whether it is ongoing.

Eastern water law has developed more recently, since water in the East has historically been more abundant than in the West.  Water is seen as a natural resource that is shared in common by riparian owners and the public.  The law in the East centers more on reasonable use of available water resources.

The law that applies in any particular jurisdiction has to do both with geography, water abundance or scarcity, and that state’s history of development.

In Florida, a “modified riparian state,” [my home state of South Carolina is a riparian rights state], water is held in trust for the benefit of its citizens.  Ownership of land does not equal ownership of water.  In Florida, the right to use is regulated by that state through regional water management districts.

Even in Florida, a “wet” state that usually receives an annual rainfall amount of 54” annually, the issue is not supply, but storage.  In earlier times, landowners drained the Everglades and built canals to get rid of water, seen by many as a natural enemy.  With dramatically increased year- round water use caused by increased development, the question is now how to save water for the months when it stops raining?   The system of consumptive use permitting (CUP) regulates the consumption of water by municipalities and industrial users. The water management districts (WMD) use minimum flow levels as a regulatory tool and have identified water as a limited resource.  These WMDs restrict new users, issue limited duration permits (5 years) and emphasize the need to conserve and look for alternative sources of water.

Scott Cole, with the Atlanta law firm of HBSS, spoke on the tri-state water litigation involving the states of Georgia, Alabama and Florida, and the US Army Corps of Engineers. Recently the presiding federal judge in that case ruled that based on his interpretation of Congressional action in 1946, the only authorized purposes for Lake Lanier are hydropower, flood control and navigation. The court gave a window of three years to obtain approval from Congress for the operational changes that are necessary to allow water from Lake Lanier to continue to be used for water supply purposes. Failing that, the operation of Buford Dam will revert to “base line” operations of the mid-1970s, which will require Georgia to stop withdrawal of water from that source, upon which much of the metropolitan Atlanta area relies.  Consequently, Georgia is being forced to assess its available resources, address gaps between the current demand and anticipated supply, and identify management practices to deal with the gap.

One traditional tool for supplying growing metropolitan areas with water from remote locations has involved transferring water from one basin to another.  In Atlanta, located in the headwaters of 5 river systems, there has been extensive use of interbasin transfers.  Recently, though, there has been much more concern over the impacts of these transfers, particularly on donor basins?  Minimum flows have been imposed to avoid damages to flora, fauna, and water quality.  Some jurisdictions, like the Great Lakes system have prohibited interbasin transfers altogether.  Others allow it, but balance the need versus the impact on donor basin.

[South Carolina has just such a system.  See, for example, S.C. Code Sec. 49-21-20: Permit required for certain transfers.

Following the effective date of this chapter, no person shall withdraw, divert, pump, or cause directly the transfer of either five percent of the seven-day, ten-year low flow, or one million gallons or more of water a day on any day, whichever is less, from one river basin and use or discharge all or any part of the water in a different river basin unless the person shall first obtain a permit from the department. “]

Ken Ramirez, of the Austin, Texas office of Brown McCarroll, whose practice focuses on Texas water law, explained how water is allocated in Texas, a western water law state allocating rights in water use based on the principal of prior appropriation (“first in time, first in right.”). In Texas, as in other western states, water rights are a property right, so there is no need to renew permits if you are priority owner, and new water rights are practically useless. However, “new” water rights are being mined from older, abandoned rights.  If a water right is not used, it is lost, and the State is actively searching for unused rights to cancel.  As opposed to surface water, ground water in Texas is the private property of the owner. Even with regard to well water, though, ground water conservation districts have been formed that now require permits and regulate the use of ground water.

Since in Texas all surface water has been spoken for, the battle has turned to who owns effluent from sewerage treatment plants.  Does effluent belong to the municipality that treated it, or is it the water of the state, once it is discharged in the water course.  A fierce battle has been fought over the last 7-8 years over the concepts of direct and indirect reuse.  You can use and reuse all water you are allocated, as long as it is not discharged.  If it is discharged, though, there is a question of whether you can you take it out again a mile or so downstream.  Once removed and stored, is the stored water a new appropriation, or the old appropriation of the “original” water?

Water coming out of a treatment plant is pretty clean, but not potable, yet, so there have been innovations in the area of further treatment to discharge so that it can be reused as drinking water. Dallas is currently using a system of discharging the effluent, letting it run down stream for a mile, into a new wetlands area, where the water seeps through the wetlands, before storage in a reservoir for later use as potable water.

Finally, Richard Lotspeich of the Tampa Water Authority reviewed the Model Water Code, which employs a 3-prong test:  (1) a use is a reasonable beneficial use (2) that does not interfere with an existing legal use; (3) and is consistent with public interest.  The Code thus incorporates aspects of both eastern and western water laws.   The Code is administered by water management districts, using the concept of “local sources first.”  The latest amendments to the code, prefers use of water nearest of the source of use and encourages use of alternate sources, including reuse and desalinization over transfer of water from remote sources.  In Florida, with significant annual rainfall, water is harvested during the wet season and is put in reservoirs for the dry season.

In a time of climate change, then, traditional principles of water ownership, use and regulation, which vary across jurisdictions in the United States, are also changing to adapt to the demands of a growing population serviced by diminishing supplies of water.

Live from the ABA Spring Meeting: Takings International

I have just returned from attending the American Bar Association State and Local Government Section’s spring meeting in Miami (April 28-May 2) and attended several compelling programs there that I’ll be featuring for you in the next few blog entries.

The first program on Friday morning set the tone for the rest of the day with world-class (literally) speakers on the issue of comparative land use, eminent domain and regulatory takings across various national jurisdictions around the world.

The panel was organized around the recently published volume by the ABA press, Takings International: A Comparative Perspective on Land Use Regulations and Compensation Rights, edited and coauthored by Professor Rachelle Alterman, an Israeli lawyer and planner who teaches at Technion – Israel Institute of Technology in Haifa, Israel.  The panel was moderated by my friend and colleague, Robert Thomas, a land use and appellate lawyer based in Honolulu, Hawaii.  The panel included several of the book’s authors and leading experts on the law of eminent domain and regulatory taking as it exists in judicial systems around the world.

Professor Alterman began her remarks by pointing out that though no other country comes close to the United States in the amount of litigation, academic writing and public media generated on the issue of takings, it does not have the broadest compensation rights.  In fact, the US is generally in the middle of the pack, with Poland, Germany, Sweden, Israel, and the Netherlands offering significantly more to the landowner in compensation for taking of property by the government, with the Netherlands, interestingly, having the highest rate of compensation

Professor Bryan Schwartz, a member of the law faculty at the University of Manitoba, Canada, contrasted the treatment of real property rights under the constitutional systems in the US and Canada.  Under the Canadian legal system, property rights are not as explicitly protected in the text of the Canadian constitution or statutes, as they are in the US, though private property rights do show up in common law decisions, or judge-made law.  Canada also looks at property rights in the context of the comparative legal order; in other words, Canadian judges will examine what other countries in the world are doing and how that informs what the standards in Canada should be.  Though US Supreme Court has occasionally used this comparative legal analysis in some cases: (capital punishment for juveniles, for example) it is far less common in the US courts to look at other nations’ laws or judicial decisions.

Professor Russell Brown, a law professor at the University of Alberta, Canada, recognized that there are other bases for compensation other than constitutional bases (under the US Constitution, the Fifth Amendment) For example, international treaties like the North American Free Trade Agreement (NAFTA) may provide a basis for private property protection.  Some arbitration panel decisions under these trade agreements might actually provide a lower threshold for compensation than under the current state of the US Supreme Court’s constitutional analysis. Another source of protection is the common law of some judicial systems. In Canada, New Zealand, and the UK, that is where the action has been.

In Canada, uncompensated takings are barred, absent legislation that makes it clear that a taking is to be without compensation.  So, uncompensated takings are allowed, as long as it is transparent.  This requirement of explicitness has been an effective discouragement to taking, since it requires legislative action, though it has resulted in taking of property belonging to entities and owners who were politically unpopular. For example, Vancouver zoned a railroad property rather than expropriating it (paying for it).  He assumes this would not pass muster under the US Supreme Court’s Kelo decision.

Prof. Brown concluded by pointing out that there is also an entire body of international law, like the UN Declaration of Individual Rights, that deals with taking of private property and which is incorporated into Canadian and US law through participation in the Organization for American States (OAS).

Prof. David Callies, who teaches at the University of Hawaii School of Law (and is former chair of the ABA SLG Section) addressed takings in Asia.  In most Asian countries there is no regulatory taking, but expropriation (actual physical taking of title by the government) is a huge issue.  The question of expropriation in Asia is not whether the government can do it (it can) but the mechanics of it.  How does the government calculate compensation?  How much compensation is required by the law, or the political process? Professor Callies gave examples of situations in which threats of violence and civil unrest by those whose property is being taken in the countryside has gotten the government’s attention in Asia, and has led to compensation in those countries.  Across Asia, the kind of takings law that exists depends on the kind of legal system the country has.  If it is derivative of the UK, such as in Singapore and Malaysia, you will find links to the town and country planning system from England. In those countries, the comprehensive plan does not arise locally (as in the US) but from a national planning panel, based on a national physical plan.  Our contribution (US) was to make zoning popular, but the mechanism of implementation in Asia, largely is through a national plan.

Prof. Tom Roberts, of the Wake Forest University School of Law, also a former chair of the Section (and my real property professor) concluded by talking about perception versus reality in the US protection of private property rights.  In Europe, the impression is that we are a strong property rights country. We are a very conservative society, compared to rest of world.  In US Supreme Court decisions, though, the court has not gotten very much involved in local zoning as it affects individual property rights.  The decisional law is based on the Fifth Amendment.  Our country has no federal legislation and very little state law protecting property rights.  In fact, a local zoning law has never been found to be a taking.  The Lucas decision, for example, did find a taking under its facts, but it involved a state statute.  There have physical invasions of property (Nolan/ Dollan) and actual physical taking (Loretto) but these, again, did not involve local zoning.

A copy of the book can be purchased on the ABA website, http://www.abanet.org/abastore.

* Andy Gowder

Exactions and Impact Fees in The Urban Lawyer

In the spring of every year, the Land Use Committee of the American Bar Association Section of State and Local Government Law meets for its annual Hot Topics luncheon.  Section members and guests present (at lightning speed) short summaries of the papers that they have prepared on a particular aspect of land use law, some following and writing about a topic for many years.  When I first became involved in the Section in 2003, I was given the great privilege to write a paper on the topic of exactions and impact fees with a legend in land use and local government law, Dan Curtin.  Dan practiced in his native San Francisco Bay area, in Walnut Creek, California and wrote the multi-volume treatise on California planning and zoning law that bears his name.  He was the president of the International Municipal Lawyer’s Association and the chair of the State and Local Government Section of the ABA.   Dan was very generous with his time and insight with me (as he was with so many others) and allowed me to write with him for several years.  A few years ago, he then introduced me to his protégé, Bryan Wenter, who began contributing to this annual paper with us.  Then, when Dan passed away unexpectedly at the end of 2006, Bryan and I kept going, and have continued to produce the update on the law of exactions and impact fees.  Fittingly, Bryan is the assistant City Attorney for Walnut Creek, California, where Dan practiced for many years, and has become a very great friend.

What are exactions and impact fees, anyway, and why write about them year after year?  Frequently, local government requires developers and landowners to dedicate property or property rights or pay fees in exchange for the right to develop property in a certain way.  By doing this, the local government hopes to shift the burden that the new development might cause from the local government’s operating budget to the developer, at least for a period of time, or ameliorate a negative condition that might be caused by the development.  Or, in some cases, to get something from the landowner that the local government wants, which it would otherwise not have to opportunity “to exact.”  The US Supreme Court dealt with these issues in the Nollan case in 1987 and the Dolan case in 1994, but determining whether a local government has properly calculated an impact fee or demanded an exaction that is within its constitutional power to do is continually worked out in state courts across the country every year, as local governments struggle to make ends meet and developers seek to minimize costs and to retain as many rights through the entitlement process as possible.

The 2009 article has now been published in The Urban Lawyer, one of the leading law reviews on state and local government law, produced by the UMKC School of Law, by agreement with the ABA Section of State and Local Government Law.  I have attached the full article at the link below.

The Urban Lawyer – Exactions and Impact Fees

The impact of Medicare “Never Events” in medical malpractice litigation

Since October 1, 2008, as mandated by the Deficit Reduction Act of 2005 (DRA), the Centers for Medicare & Medicaid Services (CMS) requires Medicare-participating hospitals to disclose all hospital-acquired conditions (HACs).  An HAC is defined as a reasonably preventable condition, not present or identifiable at the time of hospital admission, but present during discharge, and generally falling into three categories:  (1)  those that are high cost, high volume, or both, as determined by CMS; (2) those identified through the International Classification of Diseases, 9th Revision, Clinical Modification coding (ICD-9-CM) as “complicating conditions” (CCs) or “major complicating conditions” (MCCs) that, when present as secondary diagnoses on claims, result in a higher-paying MS-DRG; and (3) those that are reasonably preventable.   CMS no longer pay hospitals any increased rate or any cost attributed to care made necessary by HACs as part of the Medicare Severity Diagnosis Related Groups (MS-DRGs).  Medicare will also prohibit the billing of these additional incurred costs to the patient.

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Welcome to Grounded

“So much has been destroyed/ I have cast my lot with those /who, age after age, perversely, with no extraordinary power, / reconstitute the world.”   Adrienne Rich

Welcome to the first entry of my new blog, which I have named “Grounded.”  I want to explain the title and what I expect the focus of the blog to be.

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Healing or Stealing?

In a college commencement speech delivered earlier this summer, the visionary environmental activist and entrepreneur Paul Hawken outlined for the graduates the rather bleak state of the planet, both from an environmental and a social perspective, and why that, ironically, is presents them with an extraordinary opportunity. He told them:

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