[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
                        PRIVATE PROPERTY RIGHTS 
                       IMPLEMENTATION ACT OF 2005

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON THE CONSTITUTION

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 4772

                               __________

                              JUNE 8, 2006

                               __________

                           Serial No. 109-105

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov


                                 ______

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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California        ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah                   MAXINE WATERS, California
SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
RIC KELLER, Florida                  ADAM B. SCHIFF, California
DARRELL ISSA, California             LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona                  CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana                  DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

             Philip G. Kiko, General Counsel-Chief of Staff
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

                    Subcommittee on the Constitution

                      STEVE CHABOT, Ohio, Chairman

TRENT FRANKS, Arizona                JERROLD NADLER, New York
WILLIAM L. JENKINS, Tennessee        JOHN CONYERS, Jr., Michigan
SPENCER BACHUS, Alabama              ROBERT C. SCOTT, Virginia
JOHN N. HOSTETTLER, Indiana          MELVIN L. WATT, North Carolina
MARK GREEN, Wisconsin                CHRIS VAN HOLLEN, Maryland
STEVE KING, Iowa
TOM FEENEY, Florida

                     Paul B. Taylor, Chief Counsel

                      E. Stewart Jeffries, Counsel

                          Hilary Funk, Counsel

                 Kimberly Betz, Full Committee Counsel

           David Lachmann, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              

                              JUNE 8, 2006

                           OPENING STATEMENT

                                                                   Page
The Honorable Steve Chabot, a Representative in Congress from the 
  State of Ohio, and Chairman, Subcommittee on the Constitution..     1
The Honorable Jerrold Nadler, a Representative in Congress from 
  the State of New York, and Ranking Member, Subcommittee on the 
  Constitution...................................................     3

                               WITNESSES

Mr. Joseph L. Trauth, Jr., Partner, Keating, Muething & Klekamp, 
  PLL
  Oral Testimony.................................................     6
  Prepared Statement.............................................     8
Mr. Franklin Kottschade, President, North American Realty
  Oral Testimony.................................................    19
  Prepared Statement.............................................    21
Mr. Daniel L. Siegel, Supervising Deputy Attorney General, Office 
  of the Attorney General, State of California
  Oral Testimony.................................................   132
  Prepared Statement.............................................   134
Professor Steven J. Eagle, Professor of Law, George Mason 
  University School of Law
  Oral Testimony.................................................   164
  Prepared Statement.............................................   166

                                APPENDIX
               Material Submitted for the Hearing Record

Response to Post-Hearing Questions from Joseph L. Trauth, Jr., 
  Partner, Keating, Muething & Klekamp, PLL......................   196
Response to Post-Hearing Questions from Franklin Kottschade, 
  President, North American Realty...............................   198
Response to Post-Hearing Questions from Daniel L. Siegel, 
  Supervising Deputy Attorney General, Office of the Attorney 
  General, State of California...................................   200
Response to Post-Hearing Questions from Professor Steven J. 
  Eagle, Professor of Law, George Mason University School of Law.   202
Letters submitted for the Record by Chairman Chabot:
    Letter from Joseph M. Stanton, National Association of 
      Homebuilders to the Honorable Jim Sensenbrenner, dated 
      March 1, 2006..............................................   205
    Letter from R. Bruce Josten, Executive Vice President, 
      Government Affairs, Chamber of Commerce of the United 
      States of America, to the Members of the U.S. House of 
      Representatives, dated March 8, 2006.......................   207
    Letter from Bob Stallman, President, American Farm Bureau 
      Federation, to the Honorable Steve Chabot, dated April 12, 
      2006.......................................................   208
    Letter from Dan Danner, Executive Vice President, National 
      Federation of Independent Business, to the Honorable Steve 
      Chabot, dated May 15, 2006.................................   209
Letters submitted for the Record by Ranking Member Nadler:
    Letter from Terry L. Adkins, City Attorney, City of 
      Rochester, Minnesota to the Honorable Steve Chabot and the 
      Honorable Jerrold Nadler, dated June 9, 2006...............   210
    Letter from Rudolph W. Giuliani, Mayor, City of New York to 
      the Honorable Patrick J. Leahy, dated October 28, 1997.....   261
    Letter from The United States Conference of Mayors to the 
      Honorable Arlen Specter and the Honorable Patrick Leahy, 
      dated June 6, 2006.........................................   262
    Letter from the National League of Cities, U.S. Conference of 
      Mayors, National Association of Counties, National 
      Conference of State Legislatures, Council of State 
      Governments and the International City Management 
      Association to the Honorable Steve Chabot and the Honorable 
      Jerrold Nadler, dated June 8, 2006.........................   269
    Letter from W. Paul Farmer, Executive Director and CEO, 
      American Planning Association to the Honorable Steve Chabot 
      and the Honorable Jerrold Nadler, dated June 11, 2006......   270
    Letter from Timothy J. Dowling, Chief Counsel, Community 
      Rights Counsel, to the Honorable Steve Chabot and the 
      Honorable Jerrold Nadler, dated June 14, 2006..............   272


                        PRIVATE PROPERTY RIGHTS 
                       IMPLEMENTATION ACT OF 2005

                              ----------                              


                         THURSDAY, JUNE 8, 2006

                  House of Representatives,
                  Subcommittee on the Constitution,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:03 p.m., in 
Room 2141, Rayburn House Office Building, the Honorable Steve 
Chabot (Chairman of the Subcommittee) presiding.
    Mr. Chabot. The Committee will come to order.
    This is the Constitution Subcommittee of the Judiciary 
Committee, and we welcome everyone here this afternoon. We will 
have some other Members probably coming here shortly on both 
sides.
    The Constitution Subcommittee convenes today to discuss 
H.R. 4772, the ``Private Property Rights Implementation Act,'' 
which I introduced earlier this year, along with the Democratic 
principal sponsor of the bill, Bart Gordon, to help all 
Americans defend their constitutional property protected 
rights.
    Most Americans are familiar with one recent decision 
involving all Americans property rights, the case of Kelo v. 
City of New London, in which the Supreme Court held that the 
Constitution allows the Government to take private property 
from one citizen and give it to private companies or other 
private individuals.
    The House of Representatives acted to correct that 
notorious decision by passing a bill, H.R. 4128, by the 
overwhelmingly bipartisan margin of 376-38. However, the 
Supreme Court, during its last term, handed down another--what 
many of us consider us to be bad decisions--that fails to 
protect the private property rights of all Americans. And 
correcting that decision through the legislation we will be 
discussing today should have the same bipartisan support, we 
hope.
    Here is what the problem is. Strange as it sounds, under 
current law, property owners are now blocked from raising a 
Federal fifth amendment takings claim in Federal court.
    And here is why. The Supreme Court's 1985 decision in 
Williamson County v. Hamilton Bank requires property owners to 
pursue, to the end of all available remedies, for just 
compensation in State court before the private property owner 
can file suit in Federal court under the fifth amendment.
    Then, just last year, in the case of San Remo Hotel v. City 
and County of San Francisco, the Supreme Court held that, once 
a property owner tries their case in State court and loses, the 
legal doctrine of claim preclusion requires Federal courts to 
dismiss the claims that have already been raised in State 
court, even though the property owner never wanted to be in 
State court with their Federal claims in the first place.
    The combination of these two rules means that those with 
Federal property rights claims are effectively shut out of 
Federal court on their Federal takings claims. These decisions 
set them unfairly apart from those asserting any other kind of 
Federal rights, such as those asserting free speech or 
religious freedom rights, who nearly universally enjoy the 
right to have their Federal claims heard in Federal court.
    The late Chief Justice Rehnquist commented directly on this 
unfairness, observing in his concurring opinion in the San Remo 
case that, ``The Williamson County decision all but guarantees 
that claimants will be unable to utilize the Federal courts to 
enforce the fifth amendment's just compensation guarantee.''
    The Second Circuit Court of Appeals also noted that, ``It 
is both ironic and unfair if the very procedure that the 
Supreme Court required property owners to follow before 
bringing a fifth amendment takings claim, a State court's 
taking action, also precluded them from ever bringing a fifth 
amendment takings claim in Federal court.''
    H.R. 4772, the ``Private Property Rights Implementation 
Act,'' will correct the unfair legal bind that catches all 
property owners in what is effectively a Catch-22. This bill, 
which is based on Congress's clear authority to define the 
jurisdiction of the Federal courts and the appellate 
jurisdiction of the Supreme Court, would allow property owners 
raising Federal takings claims to have their cases decided in 
Federal court without first pursuing a wasteful and unnecessary 
litigation detour, and possible dead end, in State court.
    H.R. 4772 would also remove another artificial barrier 
blocking property owners' access to Federal court. The Supreme 
Court's Williamson County decision also requires that, before a 
case can be brought for review in a Federal court, property 
owners must first obtain a final decision from the State 
government on what is an acceptable use of their lands.
    This has created an incentive for regulatory agencies to 
avoid making a final decision at all by stringing out the 
process, and thereby forever denying a property owner access to 
courts. Studies of takings cases in the 1990's indicate that it 
took property owners nearly a decade of litigation, which most 
property owners can't afford, before takings claims were ready 
to be heard on the merits in any court.
    To prevent that unjust result, H.R. 4772 would clarify when 
a final decision has been achieved and when the case is ready 
for Federal court review. Under this bill, if a land use 
application is reviewed by the relevant agency and rejected, a 
waiver is requested and denied, and an administrative appeal 
also rejects the application, then a property owner can bring 
their Federal constitutional claims in a Federal court.
    The bill would change the way agencies resolve disputes. 
Rather, H.R. 4772 simply makes clear the steps the property 
owner must take to make their case ready for court review.
    H.R. 4772 also clarifies the rights of property owners 
raising certain types of constitutional claims in the following 
ways.
    And I recognize myself for 1 additional minute, without 
objection.
    First, it would clarify that conditions that are imposed 
upon a property owner before they can receive a development 
permit must be proportional to the impact the development might 
have on the surrounding community.
    Second, it would clarify that, if property units are 
individually taxed under State law, then the adverse economic 
impact of a regulation--excuse me--then the adverse economic 
impact of a regulation has on a piece of property should be 
measured by determining how much value the regulation has taken 
away from the individual lot affected, not a whole collection 
of lots grouped together.
    Third, the bill would clarify that due process violations 
involving property rights should be found when the Government 
has been found to have acted in an arbitrary and capricious 
manner.
    I think we all look forward to discussing this legislation 
with our witnesses here this afternoon. We want to, again, 
thank them for appearing.
    And at this time I will yield to the gentleman from New 
York, Mr. Nadler, who is the Ranking Member of the Constitution 
Subcommittee, for the purposes of making an opening statement.
    Mr. Nadler. Thank you, Mr. Chairman. I want to join you in 
welcoming our witnesses today.
    I think we all agree that the Constitution's protection of 
property rights must be preserved. The Constitution provides 
for just compensation when Government takes property, but 
nowhere does it spell out exactly what a taking is. That has 
been left to those unelected Federal judges who, just 
yesterday, we were trying to strip of all authority to hear 
cases involving the Pledge of Allegiance.
    We were told by the sponsors of this legislation that 
Congress has the power to strip the Federal courts of their 
jurisdiction to hear a particular constitutional claim, so long 
as the State courts remained available to hear the claim. What 
a difference a day makes.
    Today, we have legislation that removes the most 
fundamentally local issues--zoning, environmental protection, 
infrastructure costs, development, sprawl--and plucks them out 
of the States and into the arms of those unelected Federal 
judges we didn't trust yesterday. It is enough to make your 
head spin.
    Whatever dangers to the environment this legislation may 
pose, it is green in at least one respect: It is an outstanding 
example of recycling, taking us all back to those memorable 
days of Newt Gingrich's contract on America.
    Later versions of that effort, which have been called 
kindler and gentler--and gentler, by at least one legal 
scholar, focused on procedural issues, a euphemism for forum 
shopping.
    This bill is a little less kind and a little less gentle. 
It greatly expands the definition of a taking. It appears to 
require the Government to provide compensation in many cases 
where the Constitution would not. It would allow developers to 
game the system by arbitrarily dividing their lots to squeeze 
money out of our communities.
    Let us remember what is involved in many of these so-called 
regulatory takings cases. What is involved is the protection of 
the environment and local planning areas.
    Should we have to pay off someone to keep them from 
degrading our water supply? That seems to be the claim of some 
developers who want to fill in wetlands at will.
    What shall we tell the communities devastated by Hurricane 
Katrina who are bracing for the next hurricane season and need 
remaining wetlands to protect them? Who pays for the damage 
caused by wetlands devastation? Other taxpayers. They are the 
ones who--who will have their taxes raised to build new water 
purification plants.
    Should we have to pay off people if we want to control 
sprawl? How about if we make them pay for some or all of the 
costs of the new roads, sewers, water lines and schools that 
will be needed when they are done with their development?
    My friends on this Committee have often railed against 
trial lawyers who engage in forum shopping. Now this Committee 
appears prepared to legislate forum shopping to benefit one 
particular group: real estate developers.
    This legislation provides a new and preferential standard 
for one group asserting its rights under section 1983, real 
property owners, not other property owners, not people who have 
been denied the right to counsel, not the descendents of former 
slaves, or any of the other myriad groups who look to the 
courts to vindicate their rights and for whom section 1983, 
which deals with depravation of civil rights under color of 
law, was written.
    By all means, we should protect property rights. But we 
should not so distort the process to give some developers 
virtual immunity from legitimate land use and environmental 
legislation, as I very much fear that this bill would do.
    I look forward to the testimony of the witnesses, and I 
yield back the balance of my time.
    Mr. Chabot. I thank the gentleman.
    And the chair would just note--I am sure it was a slip of 
the tongue--but it was the ``Contract with America,'' not the 
``Contract on America.''
    Mr. Nadler. It was most certainly not a slip of the tongue. 
[Laughter.]
    Mr. Chabot. I stand corrected, as so does the Ranking 
Member.
    Do any of the other Members of the Committee present wish 
to make an opening statement?
    Okay, we will go right into introducing the distinguished 
witness panel that we have here this afternoon.
    Our first witness is Joseph Trauth. Mr. Trauth is a member 
of the Cincinnati law firm of Keating, Muething and Klekamp, 
where he practices zoning, planning and land use law. Mr. 
Trauth is a graduate of Xavier University and the University of 
Cincinnati's School of Law.
    Prior to practicing law at his current--excuse me--Mr. 
Trauth served in the U.S. Peace Corps as assistant to the 
director of economic development in Western Samoa, as assistant 
to U.S. Congressman W.J. Keating, and as chairman of the 
Volunteer Lawyers for the Poor Foundation. He was also listed 
as Ohio's ``SuperLawyer'' in 2004.
    And we welcome you here this afternoon, Mr. Trauth.
    Our second witness is Franklin Kottschade.
    Am I pronouncing that correctly, Mr. Kottschade? Thank you.
    Representing the National Association of Home Builders, a 
federation of more than 800 State and local associations, whose 
mission is to enhance the climate for housing in America.
    Five years ago, Mr. Kottschade was named party in a case 
called Kottschade v. City of Rochester that sought to overrule 
the Supreme Court's Williamson County decision, but the Supreme 
Court ultimately decided not to hear his case.
    And we welcome you here this afternoon.
    Our third witness is Daniel L. Siegel. Mr. Siegel is the 
supervising deputy attorney general, in charge of the 
California attorney general's land law section. He represents 
various State agencies in complex State and Federal land use 
lawsuits, including many taking factions.
    In this capacity, he has authored amicus curiae briefs on 
behalf of the California attorney general in takings cases such 
as Brown v. Legal Foundation of Washington and San Remo Hotel 
v. City and County of San Francisco. Mr. Siegel is graduate of 
the New York University School of Law.
    And we welcome you here this afternoon, Mr. Siegel.
    Our fourth and final witness is Professor Steven Eagle of 
George Mason Law School. Excuse me. Professor Eagle is an 
expert in regulatory takings and other aspects of property law, 
who has appeared before this Subcommittee many times.
    He is the author of a leading property law treatise and 
many other scholarly and popular articles on the subject. He 
also teaches a variety of programs for judges and the 
practicing bar. Professor Eagle received his J.D. from Yale Law 
School.
    We thank all our witnesses for taking their time out of 
very busy schedules, as we know, to appear before us this 
afternoon.
    And, Professor Eagle, congratulations, by the way, on a 
tremendous basketball season this year. We were all watching, 
and hoping, and praying. Since the University of Cincinnati in 
my district didn't quite make it this year, we were pulling for 
you all. And we had staff people that were attending almost all 
your games. So a job well done.
    It is the practice of the Committee to swear in all 
witnesses appearing before us, so if you would all please stand 
and raise your right hands.
    Do you swear that, in the testimony you are about to give, 
you will tell the truth, the whole truth, and nothing but the 
truth, so help you God?
    Thank you. All witnesses have indicated in the affirmative.
    Finally, I would like to just explain to you what we call 
the 5-minute rule here. Each of the witnesses will have 5 
minutes. And each of the Members who are asking questions up 
here will also have 5 minutes.
    We even have a lighting system up there. When you begin 
speaking, the green light will come on. That will be on for 4 
minutes. A yellow light will come on after 4 minutes to let you 
know you have about a minute to wrap up. And then the red light 
will come on.
    We would appreciate it if you would wrap up within that 
time, if at all possible. I won't gavel you down immediately, 
but we are keeping pretty close track of time. So if you could 
stay within that, we would very much appreciate that.
    And, Mr. Trauth, you are recognized for 5 minutes.

 TESTIMONY OF JOSEPH TRAUTH, JR., PARTNER, KEATING, MUETHING & 
                          KLEKAMP, PLL

    Mr. Trauth. Thank you, Chairman Chabot, Ranking Member 
Nadler, Members of the Subcommittee.
    My name is Joseph L. Trauth, Jr. I am an attorney with the 
law firm of Keating, Muething & Klekamp in Cincinnati, Ohio, 
full service law firm. I am licensed to practice both in Ohio 
and Kentucky, and I have specialized during that period in land 
use law and real estate law.
    The primary purpose of H.R. 4772 is to simply and expedite 
access to the Federal courts for parties injured under the 5th 
and 14th amendment of the United States Constitution. The bill 
is primarily concerned with regulatory takings.
    We often hear about the eminent domain cases, which are 
very high-profile, but every day we have regulatory takings, 
and I have seen it over the past 32-plus years.
    The following details the significant impact the bill would 
have, as well as the reasons its passage is necessary. My 
testimony focuses primarily on section II and section V of the 
bill.
    And I would like to say that this is not a developers' 
bill; it is not a builders' bill. It is a personal property 
rights bill, and those are the people that I represent every 
day. These are the personal; these are the people who own 
property personally, farmers, people who have held land in 
their family, people who have put all of their money into 
property.
    Section II of the bill is primarily aimed at granting 
property owners with Federal takings claims access to the 
Federal courts system. Currently, an aggrieved party must file 
suit in State court when municipalities or other governmental 
agencies violates his or her 14th amendment or fifth amendment 
property rights. Even if the property owner brings a purely 
Federal claim, he or she will be barred from filing in Federal 
court.
    The Williamson County case that was talked about early 
strips property owners of protected rights. Williamson County 
created three harmful effects for property owners.
    First, by requiring that fifth amendment takings cases to 
originate in State court, States have developed different 
standards interpreting what constitutes a taking and when a 
taking is unconstitutional.
    The second consequence of Williamson County is that the 
costs associated with litigating a taking claim have 
dramatically increased.
    And, finally, after San Remo Hotel v. San Francisco was 
decided in 2005, property owners were left with the possibility 
of never being able to bring their takings claims under the 
fifth amendment in a Federal court.
    The problem is with different State standards. There is no 
logical reason why the fifth amendment should mean different 
things depending upon which State you reside in. However, as a 
result of Williamson County, this is exactly what has happened.
    State courts, such as Ohio, have elevated themselves above 
the Supreme Court of the United States in regards to 
interpreting the Federal Constitution.
    The Supreme Court has established a two-part disjunctive 
test to prove unconstitutionality. Does the ordinance 
substantially advance the legitimate State interests? Or does 
it deny the owner with economically feasible use of his land?
    Unfortunately, in Ohio, back in 1990, Ohio created a 
conjunctive test. You had to prove both, and you had to prove 
both beyond fair debate, which was interpreted under case law 
as to mean beyond a reasonable doubt.
    So to protect your constitutional fifth amendment right in 
Ohio, you have a criminal prosecution standard to meet in order 
to protect your federally granted fifth amendment property 
rights. That is just wrong; it is inappropriate.
    Kentucky and Indiana, who are in our region, have slightly 
different standards. Passing H.R. 4772 solves the problem of 
differing State standards. Its passage is necessary for Ohioans 
to fully enjoy their constitutional rights.
    Ohio essentially seceded from the fifth amendment and the 
14th amendment for 8 years. And they still today require a 
criminal conviction standard for property owners to prove that 
his or her Fifth and 14th amendment rights have been trampled. 
Passing of this bill will reunite Ohioans with their 5th and 
14th amendment rights.
    The exhaustion requirement of Williamson County can 
prohibitively increase litigation costs. I have two stories. 
One was a case that I had in Ohio, where an intersection next 
to an expressway was zoned for single-family housing. We fought 
it for 8 years in a State court before we got to a damage 
claim, and at that point in time my clients had to settle, 
because it had just gone on too long and was too costly.
    The second one is two parties, the township and the 
developer and the property owner, had signed a consent decree 
and the judge refused to sign the consent decree. This case is 
still going on today after 3 years, with no remedy in sight.
    San Remo preclusion is a problem. And as I said, the fifth 
section of the bill, I think, clarifies and defines multiple 
constitutional standards. It does not make a dramatic shift in 
the law.
    Finally, H.R. 4772 will provide uniformity to fifth 
amendment regulatory takings and eminent domain takings cases 
and ensure property owners rights throughout the United States 
as being adequately protected by the Federal courts.
    Again, this is not for Fortune 500 companies. This bill is 
not for developers. This is for citizens of the United States 
who own property and have a right to have that protected in the 
Federal court, and I think this bill will do that. And we urge 
its passage.
    Thank you.
    [The prepared statement of Mr. Trauth follows:]

              Prepared Statement of Joseph L. Traugh, Jr.




    Mr. Chabot. Thank you very much.
    Mr. Kottschade, you are recognized for 5 minutes.

         TESTIMONY OF FRANKLIN KOTTSCHADE, PRESIDENT, 
                     NORTH AMERICAN REALTY

    Mr. Kottschade. Mr. Chairman, before I start, I would like 
to claim personal privilege to introduce my wife.
    Mr. Chabot. Go right ahead.
    Mr. Kottschade. My wife, Bonnie, who is--we have been 
married 39 years. Thank you.
    Mr. Chabot. We welcome you here, also, Mrs. Kottschade.
    Mr. Kottschade. Chairman Chabot, Ranking Member Nadler, 
Members of the Subcommittee, my name is Franklin Kottschade. I 
am a builder-developer from Rochester, Minnesota. And I am 
pleased to testify on behalf of the National Association of 
Home Builders in support of H.R. 4772, the ``Private Property 
Rights Implementation Act.''
    Last year, the House took decisive and swift action in 
response to the United States Supreme Court's Kelo decision. 
Unfortunately, misuse of eminent domain powers is not the only 
abuse of the fifth amendment protections.
    A more persuasive and subtle abuse of private property 
rights can occur when Government regulates the property as if 
they condemned it. When Government entities take private 
property rights through excessive regulation and then refuse to 
pay just compensation, property owners should be able to 
protect their constitutional rights in Federal court, just as 
has been done with other constitutional rights.
    H.R. 4772 levels the playing field in the regulatory 
takings context by allowing owners to bring takings claims 
directly to Federal court. I am one of the many litigants who 
attempted without success to address the violations of my 
constitutional rights in Federal court.
    In 1992, I embarked on a 14-year legal battle. I applied 
for approval of 104-unit development, consistent with existing 
zoning regulations. The city said yes, but imposed nine owners 
conditions that rendered the number of townhouses I could build 
to 26, and made the project economically infeasible.
    The city's conditions would have added $70,000 to each 
townhouse, a 300-percent increase in an area where the average 
townhouse market was $125,000.
    Every effort I made to negotiate or appeal the decisions of 
the zoning board and the city common council was flatly denied. 
After 9 years of negotiations with the city, I filed suit in 
Federal court in 2001. And 5 years after filing that suit, I 
still do not--I still don't know if my fifth amendment rights 
were violated because a court has never heard the merits of my 
case.
    Federal courts refuse to hear my case, ruling that I must 
first defend my constitutional rights in State court, and yet 
the recent Supreme Court decision in San Remo confirms that 
once a takings plaintiff goes to State court, he will be unable 
to later access the Federal courts.
    As a result, property rights claims under the fifth 
amendment bear the unfortunate and unique distinction of never 
being heard in Federal court, unlike the protection of other 
provisions by the Bill of Rights.
    Accordingly, various studies show, undertaken by the 
National Association of Home Builders, over the past 15 years, 
only 19 out of 161 taking cases brought to Federal court were 
considered on its merits. Of course, this was before San Remo 
completely shut the door to the Federal court.
    And of 18 Federal appellate cases where the merits were 
reached, it took property owners on an average of 9.1 years to 
have a Federal court reach its final determination. This is 
wrong.
    Ironically, if my case were involved in building of a 
church instead of townhouses, I could have gone directly to 
Federal court, because Federal courts will hear the first 
amendment land use cases. Only property owners with fifth 
amendment claims are denied ever the specter of justice.
    Currently, municipalities and local governments hold all 
the cards. I learned recently of a case that clearly shows the 
system is broken, Koscielski v. City of Minneapolis. The 
property owner filed a claim in State court. Minneapolis had 
the case removed to Federal court, which the federal--which the 
Supreme Court rules under its ruling in the College of 
Surgeons.
    Once in Federal court, the city of Minneapolis argued that 
Mr. Koscielski's takings were not ripe because he had not gone 
to State court. Yet it was the city of Minneapolis that 
requested the removal to Federal court in the first place.
    And this is not an isolated situation. The exact same thing 
happened in the Fifth Circuit.
    The Government's abuse of the system in these cases is 
egregious. It wastes the court's time and forces property 
owners on an expensive, wild goose chase through our courts. 
Congress must restore the balance between Government and 
property owners by passing this important legislation which 
will put the fifth amendment back on par with the rest of the 
Bill of Rights.
    Mr. Chairman, Members of the Committee, thank you for the 
opportunity to testify today.
    [The prepared statement of Mr. Kottschade follows:]

              Prepared Statement of Franklin P. Kottschade




    Mr. Chabot. Thank you, Mr. Kottschade.
    And, Mr. Siegel, you are recognized for 5 minutes.

    TESTIMONY OF DANIEL SIEGEL, SUPERVISING DEPUTY ATTORNEY 
  GENERAL, OFFICE OF THE ATTORNEY GENERAL, STATE OF CALIFORNIA

    Mr. Siegel. Chairman Chabot, Ranking Member Nadler, Members 
of the Subcommittee, on behalf California Attorney General Bill 
Lockyer, thank you for this opportunity to testify.
    Forty attorneys general, Republicans as well as Democrats, 
oppose the predecessors to this bill. I would like to review 
why there has been such strong bipartisan opposition to these 
measures.
    First, they run counter to basic concepts of federalism. 
Most significantly, this bill would reduce the role of State 
courts in local land use disputes. State courts, however, are 
the best forum for resolving local disputes.
    As the Supreme Court explained just last year in its San 
Remo decision, ``State courts undoubtedly have more experience 
than Federal courts do in resolving the complex factual, 
technical and legal questions related to zoning and land use 
regulations.''
    Similarly, the newest Supreme Court member, Justice Alito, 
cautioned in an opinion he authored shortly before joining the 
Supreme Court that the Federal judiciary should reject 
procedural rules--reject procedural rules--under which it could 
be, ``cast in the role of a zoning board of appeals.''
    This bill, however, would do just that: It would move local 
land use disputes out of the State courts and into the Federal 
courts, making them zoning board of appeals.
    Second, this bill facilitates the intimidation of local 
governments, instead of locally based collaborative--the use of 
a locally based collaborative process. A key supporter made 
this clear.
    In 2000, promoting a prior effort to alter these Williamson 
County requirements, the chief lobbyist for the National 
Association of Home Builders, Jerry Howard, declared that, 
``This bill will be a hammer to the head of these State and 
local bureaucracies.''
    He is right, especially when you consider whose head this 
hammer will be to. This will mainly be to the head of the 
approximately--excuse me, there are approximately 36,000 cities 
and towns throughout the nation. Ninety percent of them have 
populations of under 10,000.
    These small towns and cities, with their limited financial 
resources, will be highly intimidated by the threat of a 
Federal lawsuit. They will also be intimidated by the bill's 
finality provisions, which facilitate the filing of premature 
lawsuits, if local governments try to work out reasonable 
compromises to often difficult land use issues. That is not 
good policy.
    Finally, this bill runs counter to separation of powers 
principles. The separation of powers defect is particularly 
stark in the section V of--section V of the bill, which is 
called a clarification. It is a new provision that was not in 
prior bills.
    It seeks to change--this bill seeks to change, for example, 
the test used by the courts in reviewing substantive due 
process challenges involving property rights disputes.
    As Justice Alito explained in an appellate decision he 
wrote shortly before joining the Supreme Court, ``These land 
use disputes are judged under a 'shocks the conscience' 
standard, not an arbitrary and capricious standard.'' That was 
expressed holding.
    This bill, however, seeks to change the standard to an 
arbitrary and capricious standard that is not permitted under 
separation of powers principles. In City of Boerne v. Flores, 
the Supreme Court expressly held that Congress cannot dictate 
the standard that courts already use in reviewing 
constitutional challenges; that is the rule of the judiciary. A 
similar separation of powers problem permeates the rest of this 
bill.
    Is the current land use system--land use system perfect? 
No, of course not. With the tens of thousands of decisions 
being made each year, there are sure to be abuses. Most are 
corrected by the State court; moreover, State and local 
governments are continuously seeking to improve the system.
    This bill, however, is not the solution. It would 
federalize local land use issues. It facilitates the use of 
intimidation rather than a thoughtful, deliberative process. 
And it runs counter to separation of powers principles.
    On behalf of the California attorney general, I therefore 
respectfully urge that you reject this bill.
    Thank you.
    [The prepared statement of Mr. Siegel follows:]

                 Prepared Statement of Daniel L. Siegel




    Mr. Chabot. Thank you, Mr. Siegel.
    And our final witness here this afternoon will be Professor 
Eagle.
    Professor Eagle, you are recognized for 5 minutes.

         TESTIMONY OF STEVEN EAGLE, PROFESSOR OF LAW, 
             GEORGE MASON UNIVERSITY SCHOOL OF LAW

    Mr. Eagle. Thank you, Mr. Chairman, Representative Nadler, 
and distinguished Members of the Subcommittee.
    My name is Steven Eagle. I am a professor of law at George 
Mason University, in Arlington, Virginia. I testify today in my 
individual capacity as a teacher of property, land use, and 
constitutional law. I write extensively on property issues.
    My prepared statement, Mr. Chairman, is somewhat technical. 
In my oral statement, however, I wish to stress principles more 
than technicalities. It is not my general inclination to 
suggest that more laws be passed, and that goes especially for 
Federal laws. I want America to be a nation under the rule of 
law and not a nation under the rule of laws in the plural.
    My own approach is one of subsidiarity, that decisions be 
made at the lowest appropriate level. I neither oppose local 
government nor want to deprive local officials of their 
legitimate powers.
    To the extent that completing the third edition of a 1,200-
page treatise on regulatory takings makes me a student of the 
subject, Mr. Chairman, I would be the first to concede that the 
line separating private property rights and legitimate 
Government regulations is not always easy to draw.
    But at the same time, Mr. Chairman, we have to struggle 
with real issues. We ought not to create artificial ones for 
ourselves and for the public.
    Mr. Kottschade is a home builder. In a real sense, he 
represents the young families and others who are depending on 
him for places to live. The rest of us on this panel are 
employed in interpreting words.
    It is tempting to use language and to invent and defend 
unnecessary procedural requirements with the result of 
discouraging those with whom we disagree from seeking justice. 
We inveterate federalism in the United States, but federalism 
is inherently messy.
    No one knows what kind of politics, or religion, or 
personal characteristics might be acceptable to the people of a 
given community like its local officials. However, our Federal 
Constitution provides certain rights to individuals, and those 
rights sometimes work against the grain of what local officials 
want. This is the heart of our Bill of Rights.
    In Dolan v. City of Tigard, the Supreme Court declared, 
``We see no reason why the takings clause of the fifth 
amendment, as much a part of the Bill of Rights as the first 
amendment or the fourth amendment, should be relegated to the 
status of a poor relation.''
    The fact that State courts might be more aware of local 
preferences doesn't prevent plaintiffs from bringing other 
kinds of claims involving the Bill of Rights to Federal courts, 
and that should be the case here, as well.
    Likewise, in a bond covenant case, United States Trust 
Company of New York v. New Jersey, the Supreme Court warned us 
that more judicial oversight is required when the State's self-
interest is at stake. In the regulation of real property, the 
financial interests of municipalities might well depend on 
keeping out uses that result in the expenditure of tax 
revenues, such as the creation of residences that will house 
school pupils.
    I support H.R. 4772, Mr. Chairman, because I think it will 
remove artificial impediments to individual property owners, 
vindicating their rights not to have their property taken 
without just compensation.
    My friend, Daniel Siegel, is concerned that H.R. 4772 would 
provide a hostile process involving land owners and local 
government, as opposed to a thoughtful and balanced process he 
thinks exists now.
    I would suggest, with respect, that salaried planning 
staffs and city attorneys are better able to use delay to 
advantage than home builders and land owners, who must pay 
property taxes, mortgage interests, and their own litigation 
fees.
    Under the final decision prong of Williamson County, 
localities have yet an additional incentive to avoid giving 
permanent applicants a straightforward response. If they are 
going to have to wait for a truly final decision, as Mr. Siegel 
indicates, they have a long time to wait.
    The Williamson County State compensation prong is one that 
many courts have mentioned. Yet, in the case of Lingle v. 
Chevron, we saw that a phrase, long repeated by the Supreme 
Court, when first subject to re-analysis fell by the wayside.
    Likewise, Mr. Chairman, I think that, in this case, we will 
find that, when the Supreme Court finally does get down to 
examining Williamson County, it will decide that the State 
compensation prong is not necessary as a constitutional 
standard and makes little sense as a prudential standard.
    I hope, Mr. Chairman, that the Subcommittee understands 
that, if it and the Congress express the intent of having the 
process one where it is easier for individuals to vindicate 
their rights, that the Supreme Court probably will accept many 
of those provisions. And if it does not, Mr. Chairman, that is 
something that will have to be dealt with in the normal course 
of legislation and judicial adjudication.
    But most of the issues we are talking about are not written 
in stone, and for the Supreme Court to have the benefit of a 
clear expression of congressional intent and a congressional 
statute would be very salutary.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Eagle follows:]

                 Prepared Statement of Steven J. Eagle




    Mr. Chabot. Thank you, Professor Eagle.
    Members of the Committee will now have 5 minutes each to 
ask questions. And the Chair will recognize himself for 5 
minutes for that person--that purpose.
    And, Mr. Trauth, I will begin with you.
    Can you describe what it takes under current law for a 
citizen to get into Federal court with a Federal free speech or 
religious discrimination claim and contrast that to what it 
takes for someone to get into court with a Federal property 
rights claim?
    Mr. Trauth. Yes. Mr. Chairman, today, for a free speech or 
religious discrimination claim, a person under the U.S. 
Constitution has direct Federal access to Federal courts. Under 
a taking claim, property rights claim, you have no access under 
the case law of San Reno in 2005.
    Mr. Chabot. We are talking about Federal rights under both 
issues, in essence, both?
    Mr. Trauth. What is that?
    Mr. Chabot. I say that we are talking about a right that 
one would think one would have under the Constitution in both 
instances?
    Mr. Trauth. Yes, right. I mean, to be denied access to 
Federal court on a constitutional claim is ridiculous. When, 
you know, this is as sacrosanct as any other Federal right 
under the Constitution--even more so. I mean, our country was 
founded on private property rights.
    And, you know, not to be able to address that in Federal 
court, I think, is absurd.
    Mr. Chabot. Thank you.
    Mr. Kottschade, I will go with you next, if I can. What has 
happened to your land since the Supreme Court denied your cert 
petition?
    Mr. Kottschade. Mr. Chairman, in March of 2003, the State 
of Minnesota Department of Transportation commenced 
condemnation proceedings against it. Now, this is very 
significant, and I just heard the testimony that the State and 
local governments are working to improve the system. I am not 
sure I can afford that.
    The reason I say that tongue-in-cheek is real simple: The 
city of Rochester attached conditions onto my property which 
devalued it. Now, the State of Minnesota has come in and is 
clipping the coupons. They have offered me, at this point, 10 
cents on a dollar.
    When I challenged them on that, ``Why are they doing 
that?'' They said, ``Well, you can't get the permits anyway.''
    So there is a collaboration between local and State 
government, as was testified. I am not sure that, as a citizen 
of this community, of this nation, that I can afford that.
    Mr. Chabot. Thank you.
    Let's see, Mr. Siegel, if I could go to you next. In one 
case in Minnesota, a property owner filed his Federal takings 
lawsuit in State court first, as he was required to do so by 
the Supreme Court's Williamson County case. Then the city 
removed the case to Federal court, as they are allowed to do 
under the Supreme Court's College of Surgeons case.
    Then, the Federal court dismissed the property owner's case 
because the property owner hadn't litigated his case in State 
court first, even though that is exactly what the property 
owner was doing when the city removed the case to Federal 
court.
    Can you give me any example from any other area of law that 
results in such a hopelessly unfair Catch-22 for the average 
citizen?
    Mr. Siegel. Well, I have not read that case, the Minnesota 
case. But I what I believe happened, from my--reading the 
testimony of my co-witness here--is that, under the removal 
statutes, any party to a State action who believes that an 
action should have been filed in Federal court can remove the 
case into Federal court, which is like filing a complaint, a 
new lawsuit in Federal court.
    The court then looks at that new lawsuit and says, ``Should 
this really be here in Federal court or not?'' And it sounds 
like, in that case, in should never have been in the Federal 
court in the first place, so that Federal court put the court--
the case back where it belonged, in State court, because there 
never had been an exhaustion of State court requirements, which 
is required under Williamson County.
    So it is just the way that the removal statutes work. And, 
you know, the Committee may want to look at the removal 
statutes, but that is how they operate.
    Mr. Chabot. Mr. Kottschade?
    Mr. Kottschade. Mr. Chairman, for the record, the Federal--
or the State moved to take that into Federal court under the 
College of Surgeons v. Chicago case, where the State can take 
court cases into Federal court, but I as a property owner am 
denied that right. And I guess the question is: Why isn't a 
level playing field, that if the city can petition a takings 
case into Federal court, why can't I, as an individual, go to 
State--or go into Federal court?
    Mr. Chabot. In the little time that I have left, if I can 
go to you, Professor Eagle. Practically speaking, under current 
rules, can the average person expect to be able to litigate 
their Federal property rights claims up to and through the 
Federal court system today? And what financial and time 
barriers await such people who try to do so?
    Mr. Eagle. No, Mr. Chairman, they cannot. If they file an 
as applied case, that is, that the regulation is 
unconstitutional, given their specific situation, it can take 
them up to a decade and several hundred thousand dollars of 
expenses to ripen their case for Federal court.
    And then, of course, under San Remo, they will be precluded 
from having the substance heard anyway. So that is absolutely a 
dead end.
    On the other hand, Mr. Chairman, there could be a facial 
challenge, saying that the regulation, under all circumstances, 
never conceivable can be constitutional, but, of course, that 
is impossible to win, so they lose right off. Either way, they 
have no chance.
    Mr. Chabot. Thank you. My time has expired.
    The gentleman from New York, Mr. Nadler, is recognized for 
5 minutes.
    Mr. Nadler. Thank you.
    Mr. Siegel, the bill makes certain changes to the ripeness 
doctrine. To what extent do you think that these changes to 
ripeness and other standards in section V, of the takings 
standard in section V, present constitutional issues we have to 
deal with, not just statutory issues?
    Mr. Siegel. They very definitely present constitutional 
issues. And it is most stark in section V.
    For example, I gave one example concerning changing the 
standard of review and substantive due process cases, where in 
essence what this bill does is it directs the judiciary to 
change the law, change the judiciary's interpretation of the 
Constitution.
    Another example is in the so-called partial as a whole 
provision. That is in subsection two of section V. And what 
this bill does is it says that if a property owner owns, say, 
100 lots, and if one of those lots cannot be developed because 
it has a wetland, but the other 99 can, the court is directed 
to only look at that single lot that cannot be developed.
    That is not current law. As explained in District Intown 
and many other cases, the courts look at what is--whether or 
not a property holding is a unified holding or not, and that is 
the test that is used.
    This directs the courts to change their interpretation of 
the Constitution, and that is, on the separation of powers 
principles, there is--Congress does not have that authority.
    Mr. Nadler. Do you think this provision will be ineffective 
as passed?
    Mr. Siegel. Well, it will not only be ineffective, but it 
will--rather than helping developers, to the extent that 
developers rely on these provisions it is going to delay rather 
than speed up their lawsuits, because there is going to be 
litigation over this bill and whether or not it is valid.
    So there is going to be more confusion and more delay, 
rather than what its supporters are hoping for, which is to try 
to speed things up.
    Mr. Nadler. Okay, one more question, Mr. Siegel, before I 
go onto others. We have considered several bills over the years 
that are similar to this one. How is this one different? I am 
sure you are familiar with the other takings bills we have 
considered in the last few years.
    And should Members who voted for the other bills have any 
concerns that this contradicts those?
    Mr. Siegel. They should be very concerned about section V. 
Section V never appeared in any of the prior bills. It is 
described as a ``clarification'' of constitutional law, but 
what it is doing is attempting to make constitutional law, and 
that has never been done before in any of the prior bills.
    Mr. Nadler. Thank you.
    Mr. Kottschade, are there jurisdictions where a developer 
would fare better in State court than in Federal court? Would 
this legislation give the developer the choice of forum?
    Mr. Kottschade. Congressman, that is a great question. The 
short answer is: I do not want to go to court, period. I want 
to be able to develop. I want to be able to pull projects 
together. I--but----
    Mr. Nadler. Yes, but this--excuse me, but this bill--if you 
don't want to go to court, this bill doesn't affect it.
    The question is, if this--if you have to go to court, you 
feel you have to go to court, does this bill give you a choice 
of forums?
    Mr. Kottschade. What, Congressman, this bill would give me 
a right to go to court, Federal court, as I testified earlier. 
I don't believe today, based upon a decision in Minnesota, that 
I have--can go to State court, because, if I do, I am going to 
get bounced into Federal court and I am going to get bounced 
out.
    So I think, after the--after the Koscielski v. Minneapolis, 
this is very important that we have this.
    Mr. Nadler. May I ask Professor Eagle the same question?
    Mr. Siegel. If I could----
    Mr. Nadler. Mr. Siegel, go ahead? Whoever is most eager to 
answer.
    Mr. Siegel. We could change our names.
    Mr. Nadler. Whoever is the most eager to answer. 
[Laughter.]
    Mr. Siegel. Well, I would like to just quickly answer, 
which is that the removal statutes involve a very quick 
process. So if there is a concern, I think, if one has a good 
case, they should bring it in State court.
    I am surprised. My understanding is that Mr. Kottschade 
never brought his case, even after the--being thrown out of 
Federal court, never brought his case in State court, which is 
surprising, because that is----
    Mr. Nadler. Why should he bring it into State court, as 
opposed to Federal court, if he can do it in either?
    Mr. Siegel. Well, he can bring his case to State court. 
What he is saying is that he would be removed to Federal court 
under a removal--he--under a removal statute, which is----
    Mr. Nadler. Yes, but are there cases where you would be 
advantaged in bringing it in Federal court, as opposed to State 
court, and vice versa?
    Mr. Siegel. I don't think so.
    Mr. Nadler. Okay.
    Professor Eagle?
    Mr. Eagle. If I may answer that, Mr. Chairman, if you look 
at City of Chicago v. International College of Surgeons itself, 
I think it is no accident that the International College of 
Surgeons wanted this matter heard in State court. The Illinois 
courts have a tradition of taking property rights more 
seriously than the courts of some other States.
    But there is nothing incongruous about this, Mr. Nadler, 
because when a plaintiff chooses to bring an action, the 
plaintiff almost always has the right to pick the cause of 
action and to bring that case in the applicable court. So this 
is the same treatment that the International College of 
Surgeons wanted that any other plaintiff would get.
    Mr. Chabot. The gentleman's time has expired.
    The gentleman from Arizona, Mr. Franks, is recognized for 5 
minutes.
    Mr. Franks. Well, thank you, Mr. Chairman.
    Professor Eagle, I would like to ask you first, you know, 
some of the critics of the legislation, H.R. 4772, have somehow 
said that this would federalize local disputes. But isn't it 
true that Federal constitutional property rights and the 
procedural rules that ultimately govern them is truly a Federal 
issue?
    Mr. Eagle. Well, as I said earlier, Mr. Franks, I think 
that the Bill of Rights of the Constitution does understand 
that individuals have certain rights.
    One of those rights is the right not to be deprived of 
property without just compensation, and this should be treated 
in the same fashion as other rights within the Bill of Rights. 
And, thus, I think it certainly is amenable to hearing in 
Federal court.
    Mr. Franks. Thank you.
    Well, Mr. Chairman, I might then just take, based on that, 
take a moment to respond to something that was said earlier, 
that somehow a day had changed a great deal of this Committee's 
focus.
    The central premise of the United States Constitution and 
its declaration is that governments are instituted among men to 
protect their basic, God-given rights. And among those are 
life, liberty and property, in the Constitution and in life, 
liberty and the pursuit of happiness in the declaration.
    And it occurs to me that the right of property, as outlined 
in the Constitution, is a very basic, foundational, 
constitutional right.
    And far from moving from our concept of yesterday, when we 
in this Committee, in the full Committee, we were doing what we 
could to tell courts that they had failed in protecting the 
rights of freedom, freedom of religion, in telling people that 
they could not say the words ``under God'' in the Pledge of 
Allegiance, we were, at that time, trying to protect a basic 
constitutional right: life, liberty and property being the 
first three of those.
    And here again today, the reason that we are putting this 
in the courts, wanting to put this into the Federal courts, is 
simply because people like Mr. Kottschade and others are unable 
to get a clear hearing on the Federal issue of property rights.
    And far from holding the courts to be the--the Supreme 
Court from being the ultimate arbiter, if, indeed, the Supreme 
Court is the ultimate arbiter of all of those issues and the 
Constitution is not, then I ask myself: Why are we here? Why 
don't we just close the doors, and go home, and let the courts 
do it all, if they are the ultimate arbiter?
    The truth is, as Members of Congress, we are given a great 
charge to protect those basic, federal, Constitution rights; 
among those are life, liberty and property.
    And I think that is what we are trying to do here, Mr. 
Chairman. Thank you.
    Mr. Chabot. Thank you very much. Does the gentleman yield 
back?
    Mr. Franks. I yield back.
    Mr. Chabot. Okay. The gentleman's time is expired.
    The gentleman from Virginia, Mr. Scott, is recognized for 5 
minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, I think the last comment from the gentleman 
from Arizona shows how complicated some of these things are, 
but it can be boiled down to the idea that, if we agree with 
what the courts are going to do, we want them to hear the case 
as quickly as possible. If we don't think we are going to agree 
with what the courts are going to do, we don't want them to 
hear it at all.
    So, Mr. Siegel, there is a concept of exhausting 
administrative remedies. At some point, you want the case to 
remain through the normal steps of administrative procedure, 
that is the little zoning board, the city council, and wherever 
else you have to agree to it. When is it appropriate for the 
case to be ripe for a Federal review of a Federal 
constitutional right?
    Mr. Siegel. Well, the courts have explained, most recently 
in the Pallazzolo decision, that, when the permissible uses of 
property are known to a reasonable degree of certainty, then 
the case is ripe.
    The courts want to know what uses of property are 
permitted, so it can decide whether or not there has been such 
an economic impact on the property, that is, as the court 
recently explained, so onerous as to amount to a direct 
appropriation.
    But to make that determination, is this imposition so 
onerous you have to know what local government is doing? And 
there needs to be a reasonable degree of certainty, according 
to the courts.
    Mr. Scott. Well, the way it is working now in practice is 
you never get there.
    Mr. Siegel. Oh, certainly cases get there all the time. I 
mean--and people complain sometimes about the California--
California courts----
    Mr. Scott. No, because, if you stuck--you never get to a 
Federal court review--let me back up. You think there ought to 
be somewhere in the process a Federal review of a Federal 
constitutional right?
    Mr. Siegel. Oh, I am sorry, no, I misspoke if I implied 
that. The court has been clear, going back to Allen v. McCurry, 
a case decided, I believe, in 1981, that there is no right to 
have a 1983 action heard in Federal court.
    If there is a meaningful opportunity to be heard in a State 
court and one has been given that opportunity, that can bar, 
through collateral estoppel, the right to a Federal hearing and 
access to a Federal court.
    That was not a property rights case. It was not a--it was a 
search and seizure case. In San Remo, the court explained that 
the same principle applies in that search and seizure case to a 
property rights case, so there is not an absolute right to go 
to Federal court.
    Mr. Scott. So, in those cases, there would never be a 
Federal--following that line of thinking, there can in some 
cases be no Federal review of a Federal constitutional right?
    Mr. Siegel. There can't--there would be Federal review, but 
not by a Federal district court or court of appeal. There could 
be Federal review by the United States Supreme Court, because 
the--once a State court has reached its decision, if it 
involves the interpretation of Federal law or Federal 
Constitution, there is the right to petition for certiorari to 
the United States Supreme Court.
    And, in fact, many of the takings case that, you know, 
takings litigants at least know about are just such cases. The 
first English case, the Nolan case, the Pallazzolo case are all 
cases that came out of the State court systems. Property owners 
said, ``Wait a second; we disagree with the way the State 
courts are interpreting the Constitution.''
    The United States Supreme Court stepped in to decide 
whether or not the State courts were interpreting the 
Constitution properly or not.
    Mr. Scott. And if the State is hanging things up so that it 
takes, as has been pointed out, an average of over 9 years to 
get there, does that seem like a reasonable length of time to 
get--finally get a Federal review of a Federal right?
    Mr. Siegel. Nine years, I think, is a long time for any 
case to proceed. That is a reality, in some situations, in some 
courts, not just in takings law, but in any law.
    There has been no comparison that I have seen of how long 
it takes for a takings case, which--a ripe takings case to go 
from being filed to being to an ultimate decision versus other 
cases. I don't think there is any difference between how any--
you know, in terms of the length of time it takes for any case 
to be litigated.
    As you say, in my State----
    Mr. Scott. Let me--I don't mean to cut you off, but my time 
is just about up, and I wanted to ask another question on 
section V in the bill, which kind of redefines deals with 
takings, what is the present law? And how does that section 
change present law?
    Mr. Siegel. Present law is that as--one of the takings 
provisions under this bill says that, in analyzing a parcel in 
a subdivision, say, with a hundred different lots, you, under 
this bill, only look at the particular lot that is being 
regulated, while current law says that you look at the parcel 
as a whole.
    Mr. Scott. You mean----
    Mr. Siegel. You look at if all the lots are part of the 
same development, they were purchased at the same time, they 
were part of the same scheme, then the courts have been 
treating those in cases such as Tab Lakes and District--I am 
sorry, I am forgetting the name of the case now--as a single 
unit, rather than this discrete little unit.
    Mr. Scott. Is that the only change by section V?
    Mr. Siegel. No, no. There is an attempt to change the 
Nolan/Dolan standards, to extend what is--as Professor Eagle 
pointed out--at least strongly, implicitly current law, that 
those cases, for example, do not apply to fee impositions. And 
this bill attempts to apply them to fee impositions.
    It also attempts to change the rule articulated in Dolan 
that legislative decisions are given deference, and this bill 
attempts to take away that deference. So those are two changes 
of existing constitutional law, as interpreted by the United 
States Supreme Court.
    Mr. Chabot. The gentleman's time has expired.
    The gentleman from Florida, Mr. Feeney, is recognized for 5 
minutes.
    Mr. Feeney. Well, Professor Eagle, with respect to the 
deference--if I understood Mr. Siegel's last comment--what we 
really do in section V is to clarify the standard. The Supreme 
Court has never used ``shock the conscience'' as a test in a 
property takings case; it is usually police work.
    What we go back to is an arbitrary and capricious standard, 
is that right?
    Mr. Eagle. Yes, sir. And if I may, let me just make a much 
more general comment about this notion that this bill would go 
against existing law.
    There was a very insightful colloquy in the oral argument 
in San Remo--which I had the privilege of attending--where the 
attorney for the city said that the court had never considered 
the interaction of issues of preclusion and the Williamson 
County doctrine.
    And Justice O'Connor said, ``Well, it is clear we didn't, 
so now we are faced with the consequences of that. And it looks 
to me like the lower courts have run pretty far with Williamson 
County.''
    And that is exactly what has happened. There are decisions 
in some of the lower courts that reached the results that Mr. 
Siegel has indicated, but the Supreme Court's view of these has 
not yet been definitively determined. And I certainly don't 
think, apart from what the Chair has, in my view correctly, 
pointed out to be this Committee's independent duty and Mr. 
Franks has pointed out to be this Committee's independent duty 
to look at the Constitution.
    The fact of the matter is that the Supreme Court itself has 
not really definitely ruled in the Constitution on these 
issues. And even in the International College of Surgeons case, 
the Chicago case, we are talking about how that interacts with 
the decision of the court in Williamson County.
    And the point is: The court didn't consider it; the court 
didn't even mention Williamson County.
    Mr. Feeney. We address a lot of unaddressed issues, at 
least from the Supreme Court. I actually have a parochial 
interest here, and I want to make sure that my understanding is 
correct.
    In Florida, for--we have different guaranteed 
constitutional rights if property is taken by the State or a 
subdivision thereof, a country or a city, for example, 
attorney's fees on top of fair market value. There is 
actually--you know, by and large, property owners would rather 
be condemned by the State than by the feds, for that reason.
    My question is, supposing a property owner condemned by a 
State or a subdivision thereof opted--wanted to opt for a 
Federal court under this law, once it was passed in Florida, 
the Federal court, as I understand it, would be applying State 
law in the remedy stage, including attorney's fees. Does 
everybody agree with that?
    Mr. Eagle. Well, I think the question would be what body of 
law--what right that the plaintiff is seeking to have 
vindicated in court.
    Mr. Feeney. Well, assuming that--okay, I have put the bunny 
in the hat, as my professors used to say. Assuming that the 
property owner can establish a regulatory takings under the 
fifth amendment in a Federal court by a State subdivision, 
would the property owner then be eligible for attorney's fees?
    Mr. Siegel, do you have an opinion on that?
    Mr. Siegel. I do not believe, if it was based upon Federal 
law, unless----
    Mr. Feeney. Supposing the statute--supposing the State 
statute of Florida said that, if a State subdivision takes your 
property, you are entitled to attorney's fees? In that case, at 
the remedy stage, wouldn't they get--avail themselves as the 
property owner of----
    Mr. Siegel. In State court, they would. What I am 
struggling with and I have don't have the answer to is, if the 
Federal court--if the property owner seeks to have a State 
compensation claim also brought into Federal court and have the 
Federal court decide that, and if the Federal court decides to 
accept that claim under pendant jurisdiction----
    Mr. Feeney. Well----
    Mr. Siegel [continuing]. Then it might----
    Mr. Feeney [continuing]. I would like to put that question 
in writing. Basically, the question is, supposing there is a 
regulatory taking, a rezoning issue, for example, by a State 
subdivision, but I, as a property owner, I decide to go to 
Federal court.
    And so I will put that in writing. Maybe we can all do 
collectively some research about how this would impact the 
rights of Florida property owners, which is preeminent in my 
mind on occasion.
    Mr. Siegel, I was interested in the question about a 
property owner--whether 9 or 10 years is a reasonable length of 
time to wait for all--to all your State remedies and processes 
to expire before you eventually get to a Federal court on an 
important Federal principle.
    And aside from the fairness of that, how about the mere 
fact that, you know, if I acquire property when I am 50 and 
have a life expectancy of 70, the 10 years that I am tied up--I 
can't use my property while I am having courts decide what my 
rights are--hasn't half the value to me effectively been taken, 
merely because the Government has an endless amount of 
resources? They are taxing me to pay to promote their position, 
and I have to pay out of my pocket during that 10-year period.
    Do you have sort of a moral problem with the fact that 
there is an imbalance between the resources, typically, between 
a private property owner and the Government?
    Mr. Siegel. Well, let me answer the delay question from the 
point of view of my State. Delay in having justice issued is a 
problem in property rights cases and in any other kind of case. 
It is a very serious problem.
    In California, we therefore have the Trial Court Delay 
Reduction Act, which forces trial courts to move cases along. 
We also have--quickly, and it has that time limit in which 
cases need to be brought to trial.
    We also have strict limits on the amount of time an 
appellate court can take to issue a decision and the California 
Supreme Court. So that delay is a problem for property owner 
and for any other litigant, and it is something that has been 
addressed in our State and should be addressed.
    It should be--what we are saying, though, is the whole 
system of reviewing these property rights disputes should not 
be federalized. It should be addressed in the Florida courts, 
and in the California courts, and in any other State courts. 
And the States have been and should continue to work on making 
their systems fair and efficient.
    And, yes, it is a very serious problem to have a 9-year 
delay for a litigant.
    Mr. Chabot. The gentleman's time has expired.
    Mr. Feeney. Could I ask unanimous consent just to follow up 
on that point?
    Mr. Chabot. Yes. I think Mr. Kottschade would like to 
answer the question, as well.
    Mr. Feeney. Well, wonderful. And if--but with the--with the 
patience of my colleagues, on that point, Mr. Siegel, you said 
it is a very serious problem.
    If States aren't as efficient in California at resolving 
issues, do you think that the mere length of time that it takes 
to go through the State process and resolve all of your--
expedite or go through all of your procedural rights, before 
you ever get to Federal court, you think, in and of itself--and 
I would like to hear Professor Eagle's and perhaps Mr. Trauth's 
opinion on--could that be a fifth amendment problem?
    Mr. Siegel. Well, these aren't just----
    Mr. Feeney. If a State is not as efficient as California 
and if it is taking 10 or 15 years before I could actually 
figure out what I can do with Black Acre, in and of itself, is 
the length of time a fifth--does that implicate the fifth 
amendment, potentially?
    Mr. Siegel. Let me just make one point before answering 
that, which is that, when one goes to State court, they are not 
just going to State court to bring procedural, technical 
challenges. They are going to State court to bring their claim 
for just compensation, because the takings clause prohibits the 
taking of property without just compensation.
    And what is being litigated is not some technicality. It is 
as I am as--am I entitled to just compensation? And the Florida 
court or the California court is saying either, ``Yes, your 
property was taken; you were denied compensation; you have the 
right to money,'' or the court will say, ``No, this was not a 
taking; you are not entitled to just compensation.''
    Mr. Chabot. The gentleman's time has once again expired, 
but the other witnesses were asked to respond.
    And, Mr. Kottschade, if you would like to--Professor Eagle, 
did you want to respond to anything on that?
    And Mr. Trauth?
    Okay, and then Mr. Kottschade? I don't care which order you 
go.
    Mr. Kottschade. Congressman, I really appreciate your 
question, in terms of 9 years, 10 years, but I want you to 
remember that I am 14 years into this. And, by the way, another 
couple of years and this is going to be old enough to vote; 
that is how long it has been going on.
    And I don't--I honestly don't know when the end is near. 
And that frightens me, because, you know, when I started this 
project, purchased this land, I was 50--I was 50 years old. 
Tomorrow, I will become 65.
    Does this mean--and my wife keeps asking me when, when, 
when? And, you know, I can't honestly answer here. Will this be 
another 10 or 15 years? There has got to be an end to it, and 
so your question is a great question. Thank you for asking it.
    Mr. Trauth. Yes, Congressman Feeney. I think the problem is 
an equal protection problem, to a certain extent, because, why 
should one constitutional right be treated differently than 
another constitutional right?
    And, in the one, like a first amendment issue or a 
religious freedom issue, you are entitled to go directly to 
Federal court, but here, where you have go a property right, 
you know, which a fairly substantial right under the U.S. 
Constitution 5th and 14th amendment, you can't go to Federal 
court.
    And the reason that I want to be able to have the option to 
go to Federal court with a property owner is that Federal 
courts are usually more efficient in handling these cases than 
our State courts. I mean, I have seen it over, and over, and 
over again in State courts, where you get lost in the black 
hole, literally, and you never get out.
    And that is what happened with Mr. Kottschade.
    The other issue deals with costs. It is not going to cost 
the Government--governmental entities any more. Most of them 
actually have insurance. So the property owner is fighting the 
governmental entity who is insured with their own fund; so, the 
balance is clearly unequal. And, therefore, access to Federal 
court is a must.
    And, again, I get back to the fact that this is not a 
developer issue. It is not a home builder issue. It is a 
personal property rights issue.
    Mr. Chabot. And Professor Eagle, this will be our last 
response.
    Mr. Eagle. Yes. I think, Mr. Feeney, that the answer to the 
question is that the delay is not the delay in a given court 
proceeding, as much as the fact that the needless complexities 
and technicalities we have causes remands, re-hearings by 
appellate courts, other remands.
    And you also have the fact that administrative agencies 
take a long time to process situations and also may 
gratuitously and wrongfully bring actions, such as has happened 
in California, where an agency tries to assume jurisdiction 
when it doesn't have the basis to do so.
    That could be litigated for 2 or 3 years until it finally 
gets back to the agency it is supposed to be--that is supposed 
to have jurisdiction over the matter. And this is simply 
attributed to a normal administrative delay.
    Mr. Chabot. Thank you. The gentleman's time has expired.
    Mr. Nadler is recognized to make a point?
    Mr. Nadler. Thank you. I just wanted to be observed, and 
then I am going to make a unanimous consent request.
    As we have discussed these issues, we are all conscience of 
the fact of how we lucky we are that we never have similar 
delays in the Federal courts.
    Mr. Chairman, I ask unanimous consent to place the 
following letters in opposition, one from the United States 
Conference of Mayors, one from the National League of Cities, 
and one from former Mayor Giuliani of New York City in 
opposition to this legislation into the record.
    Mr. Chabot. Without objection, so ordered.
    Mr. Nadler. Thank you. And I also ask unanimous consent 
that all Members have 5 legislative days to revise and extend 
their remarks and to include additional materials in the 
record.
    Mr. Chabot. Without objection, so also ordered.
    Mr. Nadler. Thank you, Mr. Chairman.
    Mr. Chabot. Okay. The gentleman's time has expired.
    I want to thank the panel very much for their testimony 
this afternoon. It was really excellent. And I think you gave 
us an opportunity to consider this from many different angles.
    And the Committee will further consider this in the near 
future and, in that consideration, your contribution will be a 
big part of that. So thank you for doing that.
    If there is no further business to come before the 
Committee, we are adjourned. Thank you.
    [Whereupon, at 3:15 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Response to Post-Hearing Questions from Joseph L. Trauth, Jr., Partner, 
                    Keating, Muething & Klekamp, PLL



Response to Post-Hearing Questions from Franklin Kottschade, President, 
                         North American Realty



 Response to Post-Hearing Questions from Daniel L. Siegel, Supervising 
   Deputy Attorney General, Office of the Attorney General, State of 
                               California



  Response to Post-Hearing Questions from Professor Steven J. Eagle, 
        Professor of Law, George Mason University School of Law



Letter from Joseph M. Stanton, National Association of Homebuilders to 
          the Honorable Jim Sensenbrenner, dated March 1, 2006



   Letter from R. Bruce Josten, Executive Vice President, Government 
 Affairs, Chamber of Commerce of the United States of America, to the 
   Members of the U.S. House of Representatives, dated March 8, 2006



 Letter from Bob Stallman, President, American Farm Bureau Federation, 
          to the Honorable Steve Chabot, dated April 12, 2006



 Letter from Dan Danner, Executive Vice President, National Federation 
 of Independent Business, to the Honorable Steve Chabot, dated May 15, 
                                  2006


    Letter from Terry L. Adkins, City Attorney, City of Rochester, 
   Minnesota to the Honorable Steve Chabot and the Honorable Jerrold 
                       Nadler, dated June 9, 2006




    Letter from Rudolph W. Giuliani, Mayor, City of New York to the 
           Honorable Patrick J. Leahy, dated October 28, 1997



  Letter from The United States Conference of Mayors to the Honorable 
   Arlen Specter and the Honorable Patrick Leahy, dated June 6, 2006




 Letter from the National League of Cities, U.S. Conference of Mayors, 
    National Association of Counties, National Conference of State 
 Legislatures, Council of State Governments and the International City 
Management Association to the Honorable Steve Chabot and the Honorable 
                   Jerrold Nadler, dated June 8, 2006



   Letter from W. Paul Farmer, Executive Director and CEO, American 
 Planning Association to the Honorable Steve Chabot and the Honorable 
                  Jerrold Nadler, dated June 11, 2006



    Letter from Timothy J. Dowling, Chief Counsel, Community Rights 
   Counsel, to the Honorable Steve Chabot and the Honorable Jerrold 
                      Nadler, dated June 14, 2006





                                 
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