Real Estate & Property Law

Preacquisition Regulations Depressing Value And The "Scope Of The Project" Rule

By Robert Thomas (inversecondemnation.com)

Most of the buzz these days about eminent domain is about the "public use" side of the equation -- whether a condemor can take property, and the legitimacy of its professed reasons for doing so. Today, however, the U.S. Supreme Court is considering the other side, which makes up a vast majority of eminent domain cases, but does not get nearly the exposure: just compensation.

The Court has been asked to review an 11th Circuit decision about compensation arising out of property located near the Florida Everglades. In United States v. 480.00 Acres of Land, No. 07-13584 (Feb. 11, 2009), the 11th Circuit held that in calculating compensation, the federal government could take advantage of the fact that the local government's restrictive land use regulations had severely depressed the value of the acquired property. We detailed the decision here.

The property owner sought Supreme Court review, asking the Court to consider these Questions Presented:

1. When it is alleged that the federal government has induced local authorities to increase regulation of property the United States then condemns, and the property owner seeks to have the regulation?s effects disregarded in calculating just compensation under the "scope of the project" rule, must the owner show the federal government?s sole motive or primary purpose was to depress land value, as held by the Second, Third, Fifth, and Eleventh Circuits, or merely demonstrate a nexus between the regulation and the condemnation, as held by district courts in the First and Fourth Circuits?

2. What standard governs due process claims under the Fifth Amendment, where a property owner alleges that the federal government has manipulated the Fed. R. Civ. P. 71.1 land commission process to artificially depress just compensation payments by denying an owner a meaningful opportunity to be heard?

The petition is available here. The Supreme Court's docket entry (No. 09-505) is here.

The Cato Institute, which filed an amicus brief, summarizes the issue here.

Full post as published by inversecondemnation on January 08, 2010 (boomark / email).