Federal Court: City Stopped Blowing Hot And Cold And Had Exclusive Possession Of Property Under Quick-Take Statute, So It Was OK To Seize Anti-Eminent Domain Sign

by Robert Thomas, InverseCondemnation, August 31, 2015

You remember that case about property on the rural north shore of Oahu, in which the City and County of Honolulu is condemning a vacant parcel in order to build a new fire station. The City hasn't moved on building the station and hasn't included money in the budget to do so. There's even some question about whether this is a good place for a fire station.

All this caused the property owner to erect several protest signs on the parcel, one of which is depicted above. An additional brouhaha arose when the City removed and stored the signs, which caused the owner to sue the City in federal court, alleging among other things, due process and First and Fourth Amendment violations, and violations of the City's "stored property" ordinance. 

We reported on proceedings in the first case, where the court denied the City's motion for summary judgment. The City argued the writ of immediate possession which it obtained in the state court condemnation proceedings effectively transformed the parcel into City property, and gave the City exclusive possession of the land. Since the City possessed the property, it argued, it was not in the wrong when it removed the protest signs from its own land.

The federal court rejected the argument in part, holding that the Hawaii eminent domain statute which allows governmental condemnors to obtain immediate possession of property, Haw. Rev. Stat. § 101-29, does not mean that the property subject to condemnation is publicly-owned once a writ is issued. Nor does it give the condemnor exclusive possession as a matter of law, merely the ability "to do such work thereon as may be required for the purpose for which the taking of the property is sought."

And because there were questions of whether the City had acted like it was in exclusive possession (the City continued sent the owner property tax bills, and cited her for failing to keep the property free of weeds -- talk about municipal chutzpah), the court concluded there were issues of fact still unresolved about whether the City had taken full advantage of what the statute allows, and actually exercised exclusive possession. And that meant no summary judgment.

That case eventually settled for $21. 

As we noted, the court's rationale appeared to us to be the right call in this situation. Yes, the statute could give a condemnor exclusive possession, provided that it is required for the purpose for which "the taking of the property is sought." But here, the City blew hot and cold and did not act like it had exclusive possession: it dinged the owner for letting the parcel get overgrown; it collected property taxes.

The court's ruling was a good reminder to Hawaii condemning agencies that they need to adhere to the limitations in the eminent domain statutes, and cannot act outside the strict confines of what the law allows. Even though Hawaii's statute allowing immediate possession is commonly referred to as a "quick-take" rule, in actuality it is not a true quick-take statute because it does not transfer title immediately, merely the right of possession as noted in the language quoted above. True quick-take statutes immediately transfer ownership and title to the condemnor. By contrast, Hawaii law holds off on title and ownership transfer until there's been a judgment of condemnation.

At the very least, the ruling is a reminder that agencies can't take inconsistent and contradictory positions, arguing on one hand that the statute granted exclusive possession, yet on the other doing things inconsistent with that posture. But because eminent domain is such a potent power, condemning agencies often behave as if they have carte blanche and can take what they want, the rights of the property owners be darned. And because they are going to win in the end and get the property, owners have no business insisting that their rights be respected. But the requirements of the statutes are not mere details that do not need to be scrupulously followed.

But now here's chapter 2 of the saga.

After the owner filed the first federal lawsuit, the City sent a notice that it was exercising exclusive possession, issued tax reimbursement checks, and informed Reynolds (a recycling business that had been on the land) that it could not operate there. Pretty much everything it failed to do the first time.

The property owner put up several more signs, which the City, after notice, removed. The City rented the abutting property, which it owns, to Reynolds. The property owner brought another suit in federal court, which "largely recycles her Complaint from the First Action, but also includes additional allegations regarding an October 18, 2013 seizure of signs and the City's alleged interference with [her] contract with Reynolds Recycling Inc. ("Reynolds"), who was leasing the subject property from [her]."

In this order issued earlier this week, the court granted the City summary judgment on all federal claims. The difference between now and before is that the City effectively rectified its ambiguous behavior and started consistently acting like the exclusive possessor of the land:

Specifically, after the May 2013 seizure of James’ signs and the filing of the First Action, the City made well known to James that, despite its earlier mixed messages regarding James’ possession, the City was now taking exclusion possession of the subject property. In particular, the City established unequivocally that it was taking possession of the subject property by: (1) filing in the State Action an August 15, 2013 Certification stating that the City took possession of the subject property on June 4, 2010, Doc. No. 14-17, City Ex. M; (2) notifying James’ then-attorneys that James does not have a legal right of possession to the subject property, that neither James nor any other person is authorized to enter the subject property, and that any personal property found on the subject property will be removed without notice, Doc. No. 29-6, James Opp’n Ex. F; Doc. No. 14-21, City Ex. Q; and (3) issuing tax reimbursement checks on the subject property to James.

Slip op. at 19-20. 

Thus, the court concluded, "[t]hese actions left no question that the City was exercising its right of possession of the subject property to the exclusion of James, and the City took no contradictory actions suggesting to James that she still had possession of the subject property (such as by taxing James and/or requiring her to maintain the property as it previously did)." Slip op. at 20.

Once the court determined the City now has exclusive possession of the land, it had little problem disposing of the property owner's federal claims. Her Fourth Amendment rights were not violated, because the City has a clear possessory interest in the land, and its seizure of the signs was reasonable. The City provided her all the process that was required under the circumstances because it gave pre-deprivation notice and "announced its intentions" to the owner which allowed her the chance to remove or retrieve them. It was not a free speech problem because it is not a public forum for speech, it is "a vacant lot on which a fire station is to be built, and the City never opened it to the public." Slip op. at 29.

The court refused to exercise supplemental jurisdiction over the owner's state law claims.

What's left is the City's ongoing eminent domain case in state court, in which it estimates the compensation for the land taken is $521,000. 

PDF: Order (1) Granting in Part Defendant City and County of Honolulu's Motion for Partial Summary Judgment...