[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
______
U.S. GOVERNMENT PRINTING OFFICE
27-988 WASHINGTON : 2006
_____________________________________________________________________________
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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
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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
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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