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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Trust, but Verify?

“Trust, but verify” was used by President Reagan in describing his dealings with the Soviet Union.  Interestingly, it was a Russian proverb, “doveryai, no proveryai” (Russian:  Доверяй, но проверяй) and had been frequently used by Lenin. It could also serve as a succinct statement of the law of reasonable reliance in fraud cases when a false representation could have been found out by checking another source, like the public record.

Can a person ever rely on a fraudulent statement, though, when he could have determined that the statement was false by looking at a publicly filed document?

This is the question answered by a recent South Carolina Supreme Court case, Moseley v. All Things Possible, Inc..  In Moseley, the seller showed the buyers an altered plat on which an existing easement of record had been removed.   After acquiring the property, the buyers discovered the easement, to their dismay.  When the buyers sued the seller for fraud, the seller defended, in part, on the basis that the easement was shown on a recorded plat filed at the courthouse, and the buyers were therefore on constructive notice of the easement, even though the buyer had taken pains to hide it from the sellers on the forged plat.  The Supreme Court, however, referred to the state’s prior decisions reflecting a preference for a case-by-case approach to the question of whether a person’s reliance on misrepresentations is reasonable. “That is so because “[f]raud … assumes so many hues and forms, that courts are compelled to content themselves with comparatively few general rules for its discovery and defeat, and all the facts and circumstances peculiar to each case to bear heavily upon the conscience and judgment of the court or jury in determining its presence or absence.”

The court concluded: “While there may be cases in which a hearer’s reliance on a misrepresentation that is a matter of public record is unreasonable as a matter of law, this is not one of those cases.”  The court found that the case presented a question of fact to be decided by a jury and that the seller’s fraudulent misrepresentations, when viewed in a light most favorable to the buyers, induced the buyers to refrain from an examination of the public records. Whether the buyers’ reliance on the seller’s fraud was reasonable, given that the easement was in the public record, is a question to be determined by a jury.   For the full decision, seeMoseley v All Things Possible, Inc.

A Quorum of One

An “Army of One” was a short-lived National Guard recruiting slogan from a few years back.  A recent SC Supreme Court decision might be entitled “A Quorum of One,” where it upheld a vote to override a veto by Governor Sanford when the vote in the Senate was 1-0.

In Board of Trustees of the School District of Fairfield County v. State of South Carolina, et al (Opinion No. 27035, August 29, 2011) the SC Supreme Court decided a case filed in its original jurisdiction to answer the question of whether a piece of legislation affecting the Fairfield County School District was constitutional.  The Board of Trustees, challenging the legitimacy of the legislation argued (1) the General Assembly did not override the Governor’s veto  of the statute in accordance with the voting provisions of the South Carolina Constitution and (2) the statute is impermissible special legislation.

The statute at issue would have stripped the power to administer the Fairfield County School District from the school board based on alleged financial mismanagement and would have placed it in the hands of a finance committee to be appointed by the Fairfield Legislative Delegation.   The statute passed the General Assembly, but was vetoed by the governor.  In response, the legislature took up a vote to override that veto. The House of Representatives voted to override the Governor’s veto by a vote of 33 to 10.  At the time of the vote, a quorum (or majority) of the House was present.  Specifically, 120 representatives were present for roll call, although only 43 representatives voted on the matter.

In the Senate, however, the body voted 1-0 to override the veto.  On that day, although a quorum of the Senate was present, only Fairfield County Senator Creighton Coleman voted.  The 1 to 0 vote was in accordance with a purported “long-held precedent in the Senate where members do not vote on legislation affecting solely one county, also known as local legislation.”

The school board filed a complaint against the State in circuit court challenging the constitutionality of the statute.  The circuit court granted the Board a temporary restraining order.  The General Assembly then moved to intervene, after which the Board and the State jointly petitioned the Supreme Court to take the case in its original jurisdiction, which it did.

The state’s constitution provides, regarding a vote to override a governor’s veto: “if after such reconsideration two-thirds of that house shall agree to pass it, it shall be sent, together with the objections, to the other house, by which it shall be reconsidered, and if approved by two-thirds of that house it shall have the same effect as if it had been signed by the Governor.”

After examining earlier precedent, the majority of the court concluded that two-thirds of a quorum was necessary to override a governor’s veto.  The court recognized that recent practice in both houses of the legislature allowed some number less than two-thirds of a quorum to override, using the practice of counting those “present and voting,” rather than a quorum of the body, but the court concluded that practice was not consistent with the state’s constitution.

So, the court concluded that the constitution requires two-thirds of a quorum.  Assuming full membership, the minimum quorum in the House of Representatives is 63 and the minimum quorum in the Senate is 24; two-thirds of those numbers would be 42 Representatives and 16 Senators, respectively.  Here, a quorum was present in each house.  The court held the veto override votes of 33 to 10 in the House of Representatives and 1 to 0 in the Senate fell short of the constitutionally mandated two-thirds requirement.  Accordingly, the Governor’s veto was sustained.  The court did not need to reach the special legislation challenge.

Chief Justice Toal dissented, saying that the majority failed to follow “our long-standing precedent requiring the affirmative vote of two-thirds of the membership present and acting upon the matter, so long as a quorum is present to conduct business.”  She would have upheld the constitutionality of the legislation by affirming the veto override vote and by finding it permissible special legislation.

ULI SC Program Tonight! Creating Value With Green Space

Tonight, I will be moderating a ULI South Carolina program entitled, “Creating Value with Green Space” to be held at the Charleston Museum, 360 Meeting Street. The featured speaker is Ed McMahon, ULI/Charles Fraser Chair for Sustainable Development. Conservation development technologies have been around for decades, but only in the past few years have developers, conservation organizations, landowners, and local governments begun to harness the potential of these technologies to link land conservation with land development while protecting natural resources. Ed McMahon will provide insights from his new book, Conservation Communities: Creating Value with Nature, Open Space, and Agriculture, which illustrates that developers can profit by creating value with nature, open space, and agriculture.

Following Ed’s presentation, a panel of three local industry experts, Matt Sloan(Daniel Island Company), Elizabeth Hagood (Lowcountry Open Land Trust) and Perry Wood (Wood Partners) will share their experiences from local projects and discuss the issues raised by Ed McMahon as they might impact projects and communities in the coastal South Carolina Region.
Following the program, Ed’s book,  will be for sale at the event, and Ed will be available for book signing.
Registration begins at 5:00 pm and the program will begin at 5:30.

County Council Members Can Be Sued for Civil Conspiracy

The South Carolina Court of Appeals ruled, in August, that a developer frustrated in its attempts to have a development plan approved in light of a County Council’s efforts to pass a height limitation ordinance, where there had been no limitation before, could maintain an action against Council members, in their unofficial, individual capacities for civil conspiracy, where the developer was able to allege the required elements of civil conspiracy in its complaint. On the other hand, where that complaint names the Council members only as individuals, and not as officials, no causes of action addressing their actions as Council members could be maintained.

Cricket Cove sought to construct two condominium buildings containing over 200 units each in the Little River section of unincorporated Horry County. The property was located in a Resort Commercial zoning district, where construction height was unlimited, subject to parking and flight path ordinances. On July 7, 2005, Council held a special meeting and gave first reading to Ordinance 107-05 for the purpose of limiting the height of all new construction within the Little River area to sixty feet. The meeting was not advertised properly, however, and Cricket Cove did not receive notice of County Council’s actions to limit height in its zoning district.

In August, 2005, Cricket Cove submitted a sketch site plan to the county’s planning department for review and comment, which it accepted for review. At the same time, the height ordinance was referred to the Planning Commission for approval. The Commission, however, voted to recommend disapproval of the ordinance. Thereafter, Council deferred a second vote on the ordinance and referred it to Council’s Infrastructure and Regulations Committee for further deliberation.

Meanwhile, a planning department employee sent a letter to Cricket Cove stating that its sketch plan needed several modifications. After making the modifications, Cricket Cove scheduled a meeting with the employee for review of the plan. Several county representatives attended the meeting to advise Cricket Cove that the plan could not be reviewed because it contemplated new construction that would exceed sixty feet in height, but those representatives declined to put that decision in writing.

Cricket Cove filed a lawsuit in October 2005 against Horry County and the Council seeking a declaratory judgment that the County and Council had violated Ordinance 49-05, was acting upon an invalid pending ordinance (draft Ordinance 107-05), and was violating Cricket Cove’s vested right to have its plan reviewed. It also alleged the County and Council were taking its property without just compensation, violating its due process rights, and denying it equal protection under the law. Cricket Cove also sought a writ of mandamus requiring the County and Council to review its proposed plan.

In July, 2006, nine months after filing the action against the County and Council, Cricket Cove brought this lawsuit against two Council members and “Persons Unknown, being ‘JaneDoe’ [sic] And ‘Richard Roe,’” seeking damages for civil conspiracy and injunctive relief. Cricket Cove sought to prohibit these two Council members from giving orders or instructions to county employees in violation of section 4-9-660 of the South Carolina Code (1986) (which prohibits Council members from giving direction to any county official other than the administrator) and also to prohibit them from discussing outside a public forum those matters coming before Council at its meetings.

The second complaint alleged that at Council’s January 2006 meeting, the height ordinance was under review for Third Reading, and when a Council member sought to amend the draft, one of the Council member defendants asked for a recess. During the recess, certain Council members discussed the proposed ordinance outside the public forum. Upon return to the public forum, the proposed amendment was not discussed, but a vote was taken to defer Third Reading until the next scheduled Council meeting.

At the February 2006 meeting, Council adopted an amendment to the proposed ordinance that changed the height limitations to affect only the defendant Council member’s district and to exempt from the height limitations all other areas of the county. Council also adopted an amendment that had the effect of changing the height limitation for construction in that Council member’s district from 180 feet to 120 feet. During the meeting, an unscheduled recess occurred. After the recess, the other defendant Council member admitted that Council had discussed the height ordinance outside the public forum.

The complaint alleged the two Council members who were sued in their individual capacities, as well as persons unknown, engaged in a civil conspiracy to harm Cricket Cove. The complaint also sought to enjoin those Council members from giving orders to County staff in furtherance of the conspiracy and from discussing draft ordinances with other Council members outside the public forum. Cricket Cove also requested a writ of mandamus requiring one of the defendant Council members to properly advertise Council meetings.

The defendant Council members filed a motion to dismiss the complaint pursuant to Rule 12(b)(6), SCRCP, and Rule 12(b)(8), SCRCP on the grounds that the complaint failed to adequately state a cause of action, and because the same action was already pending. The circuit court dismissed this lawsuit on the basis that the first action was the same action.

The Court of Appeals, on review, noted that the second case was different in that the cause of action for civil conspiracy was not the same, and more significantly, the Council members were being sued as individuals and not in their official capacity as County Council members. As a result, the Court of Appeals reversed the circuit and ruled that the complaint did state a cause of action for civil conspiracy, at least enough to get past the pleadings stage. Interestingly, it also ruled that the other causes of action, seeking to address the defendant Council members’ actions in their official capacities, could not be maintained in this case, when they were sued as individuals, not as Council members.

Federal Preemption Defeats Case Based on South Carolina law

Preemption is a concept deeply rooted in the United States Constitution and in our system of federalism. When it presents itself in a state court room, however, the concept becomes more real, and hard-edged, particularly when it is used to defeat a wrongful death claim in favor of Ford Motor Company.

In Priester v. Cromer, — S.E.2d —-, 2010 WL 2990978 (S.C. August 2, 2010), the South Carolina Supreme Court took up the question of whether Federal Motor Vehicle Safety Standard 205 (49 C.F.R. § 571.205 (1971)) preempts a state law products liability claim premised solely on a manufacturer’s choice of tempered glass for a vehicle’s side windows. Regulation 205) mandates that “[g]lazing materials for use in motor vehicles … shall conform” to the American National Standard Institute “safety code for safety glazing materials.” Courts across the country faced with this issue have struggled with the preemptive effect, if any, of Regulation 205 and have reached opposite conclusions.

In this case, two twenty-one year olds, leaving a bar in Santee, South Carolina, drove off the road in a 1997 Ford F-150, rolled the truck several times, and the passenger, in the rear seat without a safety belt, was ejected and died at the scene. The passenger’s father brought a products liability suit against Ford, alleging that Ford used inappropriate glazing materials on the windows which failed to keep his son in the vehicle and instead shattered on impact.

Ford moved for summary judgment, arguing Regulation 205, a regulation promulgated by a federal agency, the National Highway Traffic Safety Administration (NHTSA) preempted the claim. Ford asserted Regulation 205 provided car manufacturers with options of types of glass they were permitted to use, and since Ford used one of the glass options, the state law products liability suit was preempted by the regulation.

The court examined the history of the regulation and the proceedings before the NHSTA in making a decision on what kind of window glazing to require of manufacturers. Under Regulation 205, the NHSTA decided not to require auto manufacturers to use tempered glass, but to allow the choice of laminated glass, which more easily shatters on impact. Three decisions in the country have decided whether state courts can allow juries to decide that the auto manufacturer’s choice resulted in a defective product under state tort law. The Fifth Circuit in O’Hara v. General Motors, 508 F.3d 753 (5th Cir. 2007) decided that the federal regulation is best understood as a minimum safety standard and held the regulation did not preempt the plaintiff’s products liability suit, while two other courts, the West Virginia Supreme Court in Morgan v. Ford Motor Co., 680 S.E.2d 77 (W. Va. 2009) and the Court of Appeals of Tennessee in Lake v. Memphis Landsmen, LLC, 2010 WL 891867 (Tenn. Ct. App. March 15, 2010) held Regulation 205 did preempt a claim against a manufacturer in which the plaintiff alleged his vehicle was defective because Ford used tempered glass in the side window.

The South Carolina Supreme Court recognized that courts across the country are struggling over Regulation 205 and whether it preempts conflicting state law actions, but held, nonetheless, in the absence of a determination from the United States Supreme Court on this matter, Regulation 205 provided a manufacturer with permissible, legal options rather than merely providing a safety floor and, therefore, acted to preempt Appellant’s suit.
The products liability suit based on South Carolina state law, therefore, was dismissed.

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