Takings issues discussed in D.C.

If a government does not approve your development, or changes zoning to your detriment - thereby depriving you of the use of your property in a de facto taking - it could take years for your lawsuit to wend its way through various courts.

Under current law, a property owner must exhaust all their administrative remedies, then exhaust all state court actions, before being allowed years later to pursue the same lawsuit in Federal Court for a final determination.

But bills being promoted in Congress would skip the state court step and allow property owner's claims to be pursued directly in Federal Court, thereby lopping years off aggravation and expenses from the process.

Local attorney and developer Randy Lee is one of those lobbying for passage of such a measure. He particularly likes HR 1534, which was passed last winter by the House, and its companion Senate bill S 1204, which is 'languishing" in the Senate, held up by some Republicans who are seeking changes that Lee says would "neuter" the bill.

"If you think your Federal constitutional rights have been violated, [these bills] allow you to go directly to Federal Court," Lee explained.

Lee describes one example where such a law could provide faster adjudication, such as when a property is newly mapped as a wetlands.

Such an action is basically inverse condemnation by the government, he said. During a regular condemnation action, the local government exercises what is known as "eminent domain," which provides for recognized processes to obtain compensation.

The problem comes, Lee said, when the government regulates land use in such a way that it becomes a defacto taking.

"The reason [the property] has no value is because of this regulation, and you have the right to sue, the theory being that no individual should share the burden of good works," he said. "So you can't build, you take your appeal, you go through the state court system, and then pursue your Federal claim, but these all take forever," he said.

Lee is active with the executive committee of National Association of Home Builders (NAHB) and has worked with the group to urge passage of these bills, which would provide a speedier adjudication for property owners.

The measures include a definition of "ripeness," which describes when the case is ready to be heard by the Federal Court. Under the definition, this would essentially occur after the owner has appealed the local administrative action, such as a decision by a local planning board, and has been turned down. In such a case, "you've gone far enough," Lee explained.

If the local government's decision describes what it would take to have the project approved, and it is reasonable, Lee continued, then the owner is required to refile to attempt to comply with those recommendations.

But if the project is again turned down, statutorily, "the case becomes ripe and you are defined as exhausting your remedies and you can go right to Federal court."

The current problem with going to State court first, Lee said, is that they take years to adjudicate the matters, and decisions can vary widely. Besides, at each level, when the government loses, it takes an appeal.

Lee says most land use cases spend eight to 10 years cycling their way through courts from the occurrence to the adjudication.

"This bill would allow you to go directly to Federal Court, and cuts down the time to four or five years, which is still ridiculous," added Lee.

Today, if an owner tries to go directly to Federal Court, it will hold the case in abeyance - under the abstention doctrine - while the State Court hears the matter, saying in effect "if you are still unhappy, come back tO US."

Neither HR 1534 nor S1204 allows the Federal courts to abstain.

An outerborough home-builder under the New York City Partnership and 421a certificate programs, Lee runs the legal program for the NAHB. Known as the Legal Action Network for Development Strategies, the LANDS program goal is to obtain better laws and better judicial systems for land use actions.

"We want to encourage legislation that would provide even-handed decisions and those favorable to the development industry," he said.

An earlier bill, known as the Hatch bill, never went anywhere, as it would have been a radical change from current law, and could have bankrupted local governments, Lee explained.

"Now if all or substantially all [of the property has been] taken away, it gives rise to the claim, and then provides or proves the compensation."

The home builders changed strategy to take advantage of the current state of the law, recognizing that since the governments appeal everything, they should try to shorten the adjudication time periods.

"We believe that the trend in the U.S. Supreme Court is to expand on private property rights and honor them," Lee noted, having observed that instead of one property rights case being heard during the yearly session, the court has voted to hear two or three cases.

While the House of Representatives has passed its version, Washington insiders believe that without intense lobbying, the Senate is unlikely to vote its version of the bill out of the Judiciary Committee, thus stalling it for yet another year.