Charles N. Ganson, Jr., as Personal Representative of the Estate of Molly Beyer v. City of Marathon, Florida, and the State of Florida
No. 3D12-777
Third District Court of Appeal State of Florida
September 14, 2016
Lower Tribunal No. 05-313-M
James S. Mattson; Andrew M. Tobin; Pacific Legal Foundation and Mark Miller and Christina M. Martin (Palm Beach Gardens), for appellant.
GrayRobinson, P.A., and John R. Herin, Jr., and Jeffrey T. Kuntz (Fort Lauderdale), for the City of Marathon; Pamela Jo Bondi, Attorney General, and Jonathan A. Glogau (Tallahassee), Special Counsel Chief, for the State of Florida.
Before SUAREZ, C.J., and WELLS and LAGOA, JJ.
ON MOTION FOR REHEARING
PER CURIAM.
SUAREZ, C.J., and WELLS, J., concur.
LAGOA, J., would grant rehearing.
Before SUAREZ, C.J., and WELLS, SHEPHERD, ROTHENBERG, LAGOA, SALTER, EMAS, FERNANDEZ, and LOGUE, JJ.
ON MOTION FOR REHEARING EN BANC
PER CURIAM.
Denied.
SUAREZ, C.J., and WELLS, ROTHENBERG, SALTER, FERNANDEZ, and LOGUE, JJ., concur.
SHEPHERD, J., dissenting.
This is a significant regulatory takings case, the holding of which is that a local government can regulate private property to an extent that is functionally comparable to the classic physical taking—without paying just compensation—so long as it does so incrementally over a period of time. This cannot be, and indeed is not, the law. I respectfully dissent from the denial of the Beyers’ motion for rehearing en banc, and write to explain my disagreement with this Court‘s willingness to dispense with applicable Takings Clause precedent to reach a result that is contrary to the constitutional principle that excessive economic injuries caused by government action be compensated.
The following is a chronology of the salient facts:
- 1970: Gordon and Molly Beyer purchased an undeveloped island in Monroe County (the “County“) for $70,000. At the time of purchase, the island was zoned “General Use,” which allowed one single-family home per acre. The property is just under nine acres.
- 1986: The County adopted a Comprehensive Land Use Plan (the “1986 Plan“) that downzoned the Beyers’ property to “Offshore Island,” allowing a new development density of one unit per ten acres. Since the Beyers’ property is less than ten acres, this 1986 Plan essentially eliminated their development possibilities.
The 1986 Plan included an administrative process known as a “Beneficial Use Determination.” This process provided landowners with a means of challenging the Plan‘s unconstitutional effects on property, but the administrative remedy was problematic because it only allowed for the minimum necessary relief to raise the value of the property to forty percent of its pre-regulation value. See Monroe Cty. v. Gonzalez, 593 So. 2d 1143, 1144 (Fla. 3d DCA 1992) (affirming the circuit court‘s finding that the 1986 Plan‘s beneficial use determination was not an adequate remedy because it did not provide for just compensation as required by the Fifth Amendment to
- 1996: The County adopted a revised plan—the Year 2010 Comprehensive Plan (the “2010 Plan“). Under this Plan, the Beyers’ property is classified as a “bird rookery.” Under this classification, the only permitted use of the property is “temporary primitive camping by the owner, in which no land clearing or other alteration of the island occurs[.]” Monroe Cty. Year 2010 Comprehensive Plan, Policy 102.7.2.
Revised beneficial use procedures allow property owners to “apply for relief from the literal application of applicable land use regulations or of this plan when such application would have the effect of denying all economically reasonable use of [their] property[.]” Id., Policy 101.18.5. “The relief granted shall be the minimum necessary to avoid a ‘taking’ of the property under state and federal law.” Id.
- 1997: The Beyers submitted a beneficial use application along with the applicable fee to the County.
1999: The City of Marathon (the “City“) was incorporated, and the Beyers’ property became part of the City. As a condition of incorporation, the City adopted the County‘s 2010 Plan. Up to this point, the County had taken no action on the Beyers’ beneficial use application. - 2002: The Beyers submitted a new application and paid another application fee ($3,000) because the City refused to process the pending County application.
- 2005: The Beyers’ cause was finally heard by a Beneficial Use Special Master, nearly nine years after the application was first submitted. The Special Master found that “[o]ther than the Applicant being allowed to enter onto the property to camp, there is absolutely no allowable use of the property” under the 2010 Plan. The Special Master also found that the permitted camping “would not constitute reasonable economic value to the Applicant in light of their investment in the property.” In spite of these findings, however, the Special Master recommended denying the Beyers’ application because “[t]he Applicant has been adequately compensated by the issuance of 16 ROGO1 points[.]” The City Council adopted these findings and recommendations.
The Beyers, having exhausted their administrative remedy, brought an inverse condemnation action against the City, alleging that they “have been deprived of all or substantially all, reasonable economic use of the subject property.”
2008: The circuit court grants final summary judgment in favor of the City (and the State of Florida, a third party defendant) concluding that the statute of limitations had run on the Beyers’ taking claim. The Beyers appealed. - 2010: We reversed and remanded, finding that the Beyers did not bring a facial taking challenge but rather an as-applied taking challenge for which the statute of limitations had not run. Beyer v. City of Marathon, 37 So. 3d 932 (Fla. 3d DCA 2010) (”Beyer I“).
- 2012: On remand, the circuit court again granted summary judgment in favor of the City and State on the ground that the Beyers failed to establish reasonable investment-backed expectations and, alternatively, under the laches doctrine. The Beyers again appealed.
- 2013: We concluded that the laches doctrine did not bar the Beyers’ claim, but we nevertheless affirm summary judgment on the basis that the Beyers failed to establish reasonable investment-backed expectations. Beyer v. City of Marathon, 38 Fla. L. Weekly D2286 (Fla. 3d DCA Nov. 6, 2013) (”Beyer II“).
ANALYSIS
The Takings Clause is clear and concise: “nor shall private property be taken for public use, without just compensation.”
Categories of Takings Challenges
Before engaging in a taking analysis, it is useful to determine the category of the challenge to the regulatory action. There are three2 main categories of regulatory takings challenges. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538 (2005).
The Beyers brought a per se/categorical taking challenge alleging a deprivation of all, or substantially all, economic use of their land (a Lucas-type total regulatory taking claim). See Lucas, 505 U.S. 1003. In Beyer I this court erroneously conflated the Beyers’ per se/categorical challenge with something else entirely—a facial taking challenge. 37 So. 3d at 934. Under the mistaken belief that a per se/categorical taking was equivalent to a facial taking, Beyer I reframed the Beyers’ claim, presumably as one governed by Penn Central,3 to overcome the
Had the Beyers brought a facial taking challenge, there would have been no need for them to waste their time and money on a beneficial use determination because a facial taking claim alleges that the mere enactment of a regulation effects a taking regardless of any determination as to the regulation‘s actual impact on the property in question. See Suitum v. Tahoe Reg‘l Planning Agency, 520 U.S. 725, 736 (1997) (“Such ‘facial’ challenges to regulation are generally ripe the moment the challenged regulation or ordinance is passed, but face an ‘uphill battle,’ since it is difficult to demonstrate that ‘mere enactment’ of a piece of legislation ‘deprived [the owner] of economically viable use of [his] property.‘” (citations omitted)); Hodel v. Virginia Surface Min. & Reclamation Ass‘n, Inc., 452 U.S. 264, 295 (1981) (“Because appellees’ taking claim arose in the context of a facial challenge, it presented no concrete controversy concerning either application of the Act to
The Beyers’ Taking Claim
It is important to recognize at the outset that although the various takings tests outlined above are not particularly coherent, they share a common purpose: “to identify regulatory actions that are functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain.” Lingle, 544 U.S. at 539; see also Penn Cent., 438 U.S. at 124 (“[T]his Court, quite simply, has been unable to develop any ‘set formula’ for determining when ‘justice and fairness’ require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.“). In its attempt to make sense of a genuinely enigmatic regulatory takings jurisprudence, Beyer II appears to have lost sight of this overarching purpose. In short, Beyer II fails to see the proverbial forest for the trees.
1. The Total Taking Inquiry (Lucas)
In Lucas, a property owner purchased two residential beachfront lots that were subsequently rendered undevelopable by the state‘s enactment of the “Beachfront Management Act.” 505 U.S. at 1006. As in this case, the owner did not challenge the validity of the Act as a lawful exercise of the state‘s police power, “but contended that the Act‘s complete extinguishment of his property‘s value entitled him to compensation.” Id. at 1009. Relying, in part, on Justice Holmes‘s “oft-cited maxim” in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922), that “[t]he general rule at least is that while property may be regulated
Since the Beyers obtained a beneficial use determination that specifically considered the permitted economic uses of their property under the 2010 Plan, inquiry into the economic impact is rather straightforward. According to the Special Master, “[o]ther than the Applicant being allowed to enter into the property to camp, there is absolutely no allowable use of the property under the City of Marathon Land Development Regulations.” In essence, the Beyers are required to leave their property in its natural state. Cf. Lucas 505 U.S. at 1018 (explaining “that regulations that leave the owner of land without economically beneficial or productive options for its use—typically, as here, [require] land to be left substantially in its natural state“). This is no different from the beachfront property in Lucas, which was found to have been deprived of all economically beneficial use.6 Id. at 1020. Indeed, the Beyers’ only allowable use for “temporary primitive
Unfortunately, despite the unmistakable parallels between the economic impact in Lucas and the economic impact on the Beyers’ property, the Beyers’ challenge was never considered under Lucas‘s total regulatory takings framework. To add insult to injury, although the economic impact here is tremendously burdensome, it does not appear to have been considered in the context of the Penn Central analysis either. Even assuming for the sake of argument that the 2010 Plan did not give rise to a Lucas-type total regulatory taking because it did not deprive the Beyers of all or substantially all7 economically beneficial use, the regulation‘s economic impact would still be a necessary factor in the Penn Central inquiry. As Justice Scalia, writing for the majority in Lucas, explained:
Justice STEVENS criticizes the “deprivation of all economically beneficial use” rule as “wholly arbitrary,” in that “[the] landowner whose property is diminished in value 95%8 recovers nothing,” while the landowner who suffers a complete elimination of value “recovers the land‘s full value.” This analysis errs in its assumption that the landowner whose deprivation is one step short of complete is not entitled to compensation. Such an owner might not be able to claim the benefit of our categorical formulation, but, as we have acknowledged time and again, “[t]he economic impact of the regulation on the claimant and . . . the extent to which the regulation has interfered with distinct investment-backed expectations” are keenly relevant to takings analysis generally.
505 U.S. at 1019 n.8 (emphasis added) (citing Penn Cent., 438 U.S. at 124).
2. The Ad Hoc, Factual Inquiry (Penn Central)
In Penn Central, the United States Supreme Court identified several factors that “have served as the principal guidelines for resolving regulatory takings claims that do not fall within the . . . Lucas rules.” Lingle, 544 U.S. at 539. As the Supreme Court has explained:
Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation‘s economic effect on the landowner, the extent to which the
regulation interferes with reasonable investment-backed expectations, and the character of the government action.
Palazzolo v. Rhode Island, 533 U.S. 606, 617 (2001) (citing Penn Cent., 438 U.S. at 124).
Both the circuit court and Beyer II claim to evaluate the Beyers’ taking challenge under Penn Central. Yet, despite the Supreme Court‘s insistence that no individual Penn Central factor be singled out as determinative, the circuit court and Beyer II did just that, brushing aside the undoubtedly relevant economic impact factor and focusing solely on “reasonable investment-backed expectations.” See Palazzolo, 533 U.S. at 634 (O‘Connor, J., concurring) (“The court erred in elevating what it believed to be ‘[petitioner‘s] lack of reasonable investment-backed expectations’ to ‘dispositive’ status. Investment-backed expectations, though important, are not talismanic under Penn Central. Evaluation of the degree of interference with investment-backed expectations instead is one factor that points toward the answer to the question whether the application of a particular regulation to particular property ‘goes too far.’ ” (citation omitted) (alteration in original)); Lingle, 544 U.S. at 540 (“And the Penn Central inquiry turns in large part, albeit not exclusively, upon the magnitude of a regulation‘s economic impact and the degree to which it interferes with legitimate property interests.“).
To further complicate matters, the cursory analyses of “reasonable investment-backed expectations” are confused and fundamentally flawed. Both
a. Prolonged Inaction
The prolonged inaction argument is based on the misunderstanding that regulations passed after the acquisition of property, if not challenged quickly enough, diminish a property owner‘s expectations so as to extinguish constitutionally protected property rights. The argument ignores the “investment-backed” qualifier and looks to a property owner‘s non-investment-backed expectations at an unspecified point in time within a post-acquisition regulatory regime. Cf. Daniel R. Mandelker, Investment-Backed Expectations in Taking Law, 27 Urb. Law. 215, 235-36 (1995) (“Investment-backed expectations held by property owners arise at the time of purchase and the information they have then about their property gives them meaning.“). This, of course, creates uncertainty since expectations could be widely variable and without the “investment-backed”
At its core, the theory is predicated on the mistaken belief that notice of post-acquisition regulations is a relevant indicium of investment-backed expectations. This approach is not supported by federal takings jurisprudence, and it is undermined by Supreme Court precedent. For example, in Palazzolo, the Supreme Court held that even regulations passed before the acquisition of property do not necessarily have a detrimental impact on the reasonable investment-backed expectations of subsequent owners who take title with notice of the regulations:
The Takings Clause . . . in certain circumstances allows a landowner to assert that a particular exercise of the State‘s regulatory power is so unreasonable or onerous as to compel compensation. Just as a prospective enactment, such as a new zoning ordinance, can limit the value of land without effecting a taking because it can be understood as reasonable by all concerned, other enactments are unreasonable and do not become less so through passage of time or title. Were we to accept
the State‘s rule, the postenactment transfer of title would absolve the State of its obligation to defend any action restricting land use, no matter how extreme or unreasonable. A State would be allowed, in effect, to put an expiration date on the Takings Clause. This ought not to be the rule. Future generations, too, have a right to challenge unreasonable limitations on the use and value of land.
533 U.S. at 627 (emphasis added). This being the case, the Beyers, who were not on notice of the regulations now being challenged at the time of acquisition, a fortiori, have a right to challenge the alleged unreasonable limitation on the use and value of their land. Notice of regulations passed after the acquisition of property does not intrude on this right.
Since the “prolonged inaction” argument finds no basis in federal takings jurisprudence, it should come as no surprise that the case cited in support of this approach by both the circuit court10 and Beyer II is not a regulatory takings case but a vested rights case.11 See Monroe Cty. v. Ambrose, 866 So. 2d 707 (Fla. 3d
In a nutshell, the vested rights doctrine is a creature of state law13 that prevents the government from interfering with a landowner‘s right to complete
The fact that these are distinct rights is recognized by the primary case cited by both the circuit court and Beyer II.14 See Ambrose, 866 So. 2d at 712 (explaining that although subsequently enacted regulations apply to landowners who do not have vested rights, “to the extent that these regulations render any of the Landowners’ property practically useless, the Landowners are entitled to
b. Lack of Evidence
The second argument advanced by the circuit court and Beyer II is that the Beyers’ failure to provide evidence of their particular investment-backed expectations makes summary judgment in favor the City appropriate. This narrow emphasis on subjective expectations is misplaced. The requirement that “investment-backed expectations” be reasonable requires an objective evaluation. See Lucas, 505 U.S. at 1035 (“The expectations protected by the Constitution are based on objective rules and customs that can be understood as reasonable by all parties involved.“); Res. Investments, Inc. v. United States, 85 Fed. Cl. 447, 511 (2009) (“The investment-backed expectations prong requires ‘an objective, but fact-specific inquiry into what, under all the circumstances, the [landowner] should have anticipated.’ . . . ‘[A] party‘s subjective expectation is irrelevant to whether that expectation is reasonable.’ ” (quoting Cienega Gardens v. United States, 331 F.3d 1319, 1346 (Fed. Cir. 2003))).
It is therefore inaccurate to assert, as do the circuit court and Beyer II, that there is no evidence of investment-backed expectations. Indeed, both the circuit court and Beyer II recognize that expectations can be shaped by a regulatory regime since both conclude that the Beyers did not have reasonable expectations due, at least in part, to the ever-tightening restrictions on their land.15 It is more than a little perplexing that the circuit court and Beyer II seem to have no trouble concluding that the Beyers’ expectations were defined by post-acquisition
c. ROGO Points
Almost as an afterthought, Beyer II concludes that the City‘s award of ROGO points “reasonably meets the Beyers’ economic expectations[.]” This is a puzzling assertion since it seems to undermine the opinion‘s findings elsewhere that the Beyers did not have reasonable investment-backed expectations. After all, how could an award of ROGO points meet non-existent expectations? In any event, Beyer II appears to rely on the Special Master‘s finding that the Beyers have “been adequately compensated by the issuance of 16 ROGO points.” Although it is not clear what the Special Master considered the points compensation for, if they are compensation in the takings context, the Constitution requires not that the compensation merely be adequate, but that the compensation be “just.” See Palazzolo, 533 U.S. at 631 (2001) (“Assuming a taking is otherwise established, a State may not evade the duty to compensate on the premise that the landowner is left with a token interest.“).
Moreover, bearing in mind that Beyer II affirms the circuit court‘s grant of summary judgment, there is a much more profound problem with Beyer II‘s
The only evidence in the record is from the beneficial use hearing. There, the Assistant City Attorney testified that a “two point ROGO dedication lot can generate anywhere from 25 to $40,000” but conceded that he was not a real estate expert and that this figure was arrived at anecdotally and not derived from any economic analysis of the current marketplace. Further, the Special Master sustained the Beyers’ objection to this testimony as improper hearsay evidence.
Since Beyer II improperly relied on this disputed issue of fact, the Beyers were caught by surprise and only able to address the issue in their motion for rehearing, where they argue that ROGO points have no market value. This is problematic because the record is insufficient to make a determination one way or the other. Consequently, the ROGO points valuation is not a fact upon which summary judgment ought to be based, and it is an improper justification for affirmance.
Although the intricacies of the various takings inquiries are without a doubt complicated and imprecise, one thing is certain: the Beyers have been singled out to suffer significant economic injuries in the name of the public good. They purchased an island zoned for residential development that the government transformed into a “bird rookery.” The only allowable use now is temporary, primitive camping (provided, incidentally, that no land clearing or alteration of the island occurs). If this is not a situation where justice and fairness require that economic injuries caused by public action be compensated by the government, I do not know what is. The decision of this Court that the Beyers have no constitutional taking claim against the City for what are indisputably excessive economic injuries is, well, for the birds. I hope that someday in the near future, this court reaffirms the notion that citizens have rights too. Accordingly, I respectfully dissent from the denial of the motion for rehearing en banc.
LAGOA and EMAS, JJ., concur.