New Cert Petition: Private Purpose Pretext In Economic Development Takings

by Robert Thomas, InverseCondemnation.com

In the nearly eight years since the Supreme Court's infamous decision in Kelo v. City of New London, the Court has yet to provide any clarification about what it meant when it said that a taking will not survive public use analysis when the proffered justification is a pretext to private benefit. Despite massive uncertainty and conflicting rulings from the lower courts about how to apply this standard and more than a few requests for guidance (including our own), the Court has not taken up a case.

Here's the latest, a cert petition out of Guam, that we think stands a pretty decent chance to grabbing the Court's attention. The Question Presented sets out the facts well, so we won't go into the details of the case, but let's just say that this condemnation doesn't just seem to lack a public purpose, or appear that it was for a predominantly private purpose, it looks out-and-out corrupt and purely for a private gain, cloaked in the veneer of economic development:

Mr. Ilagan owns land on which he owns and operates an apartment building. His neighbors—the Ungactas—own an adjacent, residentially zoned lot. In 1981, the Ungacta property lacked access to a road. That same year, while Mr. Ungacta was Mayor of the City of Agana, the Ungactas appraised a part of Mr. Ilagan’s property that had access to a road and which was used to provide parking for tenants of the Ilagan apartment. Soon after, the government condemned the appraised area, paying for it with compensation supplied by the Ungactas, and transferred it to the Ungactas.

The government justified the property transfer as an "economic development" measure occurring under the "Agana Plan," a post-World War Two redevelopment plan enacted to reconfigure irregular lot lines in Agana. The Plan had been defunct for seven years prior to the 1981 Ilagan taking. When active, it did not contemplate a single lot taking and had never been used that way. No other lots were taken under purported authority of the Plan at the time of the Ilagan taking. In the 30 years since then, the Plan has never been used to take any property. Although the Guam trial court held the taking unconstitutional, the Guam Supreme Court reversed. At the urging of the Real Parties in Interest Ungactas (the Government did not appeal), that court applied a standard of "judicial deference" pursuant to Kelo v. City of New London, 545 U.S. 469 (2005), and held the taking served a valid public purpose.

The Questions Presented are:

1. Does the Public Use Clause of the Fifth Amendment prohibit a taking which the government claims is for economic development, when the evidence shows it is actually designed to give property to a favored private party for that party’s own private purposes and enjoyment?

2. Does the doctrine of Kelo v. City of New London, 545 U.S. 469 (2005), according deference to a legislative claim that a taking serves a public economic purpose, apply when there is a real risk that the taking serves a private purpose because (a) the taking was initiated and funded by the private party who acquired the property; (b) that party was identified before the taking, (c) the taking produces no meaningful public benefit, but (d) clearly advances the private goals of the property transferee?

This reminds of a recent decision from the Pennsylvania Supreme Court holding that a private road statute (which allows a landlocked property owner to petition for condemnation of a private access road over a neighbor's property) might violate the Public Use Clause.

The Guam petition seems like a good vehicle for the U.S. Supreme Court to revisit the pretext issue, should it desire to do so. And we suppose that is the big question since the issue is otherwise certworthy by virtue of the diverging and conflicting lower courts: does the Court want to wade back into the Public Use issue?

Petition for a Writ of Certiorari, Ilagan v. Ungacta, No. ___ (Dec. 10, 2012)