Part Five: What qualifies as a “taking” of private property that would trigger your right to compensation?
In our last two segments of this blog, we explored your right to the “full extent of the loss” when your property is taken as well as certain rights you may have under the Federal Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970 and state relocation programs. So, what constitutes a “taking” of your property that would trigger your right to the full extent of the loss? We begin with the most obvious example; being served with an expropriation lawsuit by the government. This starts the formal legal process and imposes on you, as the property owner, strict deadlines within which to act to preserve your rights. Typically, the government must file an expropriation suit prior to taking physical possession of your property. In a “regular” expropriation, the government must file the lawsuit, serve it on you, and go through a trial before obtaining title to your property. Only after the government obtains title may it physically possess your property. That said, however, there many instances in Louisiana law in which the government may use “quick take” expropriation authority, in which the government can obtain title to your property upon the filing of the expropriation lawsuit. Under such a quick take expropriation, the government may obtain title to your property prior to your being served with or even learning about the lawsuit. The next segment of this blog explains what you should do if you are ever served with an expropriation lawsuit.
For purposes of this section of the blog, however, it is important to know that compensable government takings don’t always happen through the filing of expropriation lawsuits. Plus, compensable takings involve both “real property” (land, buildings, etc.) as well as “personal property” (moveable property such as vehicles, inventory, patents, etc.). As the U.S. Supreme Court recently held, the principle that private property should not be taken by the government without just compensation dates back 800 years to the Magna Carta. The Supreme Court ruled that this protection extends to personal property, stating, “The Government has a categorical duty to pay just compensation when it takes your car, just as when it takes your home.” Horne v. Dept. of Agriculture, 135 S.Ct. 2419, 2426 (2015). In Horne, a group of farmers filed suit challenging civil penalties assessed against them for failing to comply with a federal raisin marketing order. Under the raisin marketing order, the farmers were told they had to “reserve” (i.e., not sell on the market) a certain amount of their raisin crop that they grew as a condition of participating in the raisin market. During the time period at issue, the farmers were ordered to surrender possession of 47% of their crop, called the “reserve raisins”, to the Federal Raisin Administrative Committee (yes, there is such a thing) at no cost. The Raisin Committee could do with these reserve raisins as it saw fit, including marketing and selling them in “non-competitive markets”, such as to foreign governments, or disposing of them through donations to charitable causes, etc. When the Raisin Committee’s trucks showed up at the Hornes’ farm to pick up the reserve raisins, the Hornes refused. The Raisin Committee slapped the Hornes with a whopping $480,000 fine, plus a civil penalty of another $200,000 for disobeying the raisin marketing order. The U.S. Supreme Court held the raisin marketing order was a taking of the farmers’ property, and, therefore, the government owed them just compensation for the reserve raisins.
As the Horne case illustrates, the government can take your property – which would entitle you to just compensation – even without the filing of an expropriation lawsuit. Horne involved a physical taking of the Hornes’ property without just compensation. As we discuss below, however, compensable takings can occur much more subtly, such as through the adoption of an oppressive regulation or a wrongful denial of a permit application. A taking of private property by the government without the filing of an expropriation lawsuit is called an “appropriation” in Louisiana and is called an “inverse condemnation” in other states. We’ll use inverse condemnation since that is how most people describe it.
An inverse condemnation occurs when the government damages or takes private property in connection with a public project, or for a public purpose, without filing an expropriation lawsuit and without compensating the property owner. State Through Dept. of Transp. and Development v. Chambers Inv. Co., Inc., 595 So.2d 598, 602-03 (La. 1992). For example, if the government widens a roadway in front of your business and destroys part of your parking lot or physically restricts your ability to use the property as you did prior to the project without just compensation, that is likely an inverse condemnation. SDS, Inc. v. State, Dept. of Transp. and Development, 2007-0406 (La.App. 4 Cir. 2/13/08), 978 So.2d 1013, 1016-17, writ denied, 2008-0592 (La. 5/2/08), 979 So.2d 1289. Similarly, if a government project causes damage to properties outside of the footprint of the project – such as when vibration damage occurs to homes near a public construction project – an inverse condemnation may have occurred. Reymond v. State, Through Dept. of Highways, 231 So.2d 375, 383-84 (La. 1970). Likewise, if a government project causes flooding on a neighboring owner’s property, even temporarily, it might qualify as an inverse condemnation if the flooding is the reasonably foreseeable result of the government action. Arkansas Game and Fish Commission v. United States, 133 S.Ct. 511 (2012).
In addition, even without a physical occupation of or damage to your property, a taking – called a “regulatory taking” – can occur if a zoning ordinance, variance, permit, or other government regulation is passed, or your request to grant or change any of the foregoing is denied, the effect of which is to destroy a major portion of your property’s value or eliminate the practical economic uses of your property. Standard Materials, Inc. v. City of Slidell, 960,684 (La.App. 1 Cir. 9/23/97), 700 So.2d 975, 984. In fact, the Louisiana Supreme Court held more than 25 years ago that, “it is now hornbook law that any substantial interference with the free use and enjoyment of property may constitute a taking of property within the meaning of federal and state constitutions.” State Through Dept. of Transp. and Development v. Chambers Inv. Co., Inc., 595 So.2d 598, 602 (La. 1992) (emphasis in original). For example, a denial of a permit resulting in loss of access to a public roadway has been held to be a regulatory taking entitling the property owner to just compensation. Rivet v. State Dept. of Transp. and Development, 93-369 (La.App. 5 Cir. 1994), 635 So.2d 295, 297-98, writ denied, 1994-1606 (La. 11/29/94), 646 So.2d 397. In sum, there are innumerable ways in which the government can take your property through inverse condemnation which may entitle you to the full extent of the loss. If you suspect that your property or a property right (such as a servitude or right of passage) has been occupied or damaged by a public project or governmental action or regulation, without just compensation, you may be entitled to inverse condemnation damages. Similarly, if you have been denied a permit or zoning change, and such governmental action destroyed a major portion of your property’s value or eliminated the practical economic uses of your property, you may have suffered a regulatory taking. In any of these situations, you should consult an attorney to determine your rights. In the next segment of this blog, we explain what a property owner should do if faced with a taking.