Takings by the judiciary

Earlier this year, the California Supreme Court decided Romero v. Shih (2024) 15 Cal.5th 680. The case involved a dispute over the boundary between two residential lots in Sierra Madre. When the dust settled after litigation at all three court levels, the Supreme Court held that one of the neighbors may hold an exclusive (albeit implied) easement over thirteen percent of the neighboring lot. The upshot of that exclusive easement was that the owner of the easement had the exclusive right to possess and use the property and to exclude the title-owning neighbor, even though the title holder was still responsible for taxes on his entire lot.

We will leave it to others to untangle the ins and outs of California easement law in this circumstance. This column is supposed to deal with constitutional takings law, after all. And so it will.

The losing party knew that he had run the string of options to challenge the result under substantive easement law. That was a matter of state law and had been decided. But he nonetheless filed a petition for certiorari in the United States Supreme Court.

What was his theory? He concluded that the California Supreme Court had changed the law of easements in a way that took his property and gave it to the neighbor for no public use and with no compensation. Thus, he charged, the California Supreme Court had taken his property in violation of the 5th Amendment’s protection. The kicker was that the court held the easement to be “exclusive,” which essentially transferred the equivalent of fee simple title, by allowing the trespasser to exclude the owner. As the New York Court of Appeals once put it when distinguishing between outright government confiscation and something less, “The only substantial difference, in such case, between restriction and actual taking, is that the restriction leaves the owner subject to the burden of payment of taxation, while outright confiscation would relieve him of that burden.” Arverne Bay Constr. Co. v. Thatcher, 15 N.E.2d 587, 592 (N.Y. 1938).

Can a court be guilty of taking property? Read on. There must have been something in the cert petition that grabbed the U.S. Supreme Court’s attention because, after the Respondent initially declined to file a brief in opposition, the Court ordered such a brief to be filed. In other words, the petition made it over the first hurdle by gaining someone’s attention. Stay tuned for the ultimate outcome. Meanwhile, here is the backstory.

The petition sought to build on Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection (2009) 560 U.S. 702, where six justices of the Court concluded (for different reasons) that if a state court “declares that what was once an established right of private property no longer exists,” a constitutional violation has occurred. Id. at 717. Four justices—led by Justice Scalia—concluded such an action would violate the Takings Clause of the Fifth Amendment. Two others—through Justice Kennedy—reasoned that it would violate the Due Process Clause of the Fourteenth Amendment.

Thus, the bottom line of Stop the Beach Renourishment is that the Constitution protects citizens against the actions of all state entities, including the judiciary. “In sum, the Takings Clause bars the State from taking private property without paying for it, no matter which branch is the instrument of the taking. [T]he particular state actor is irrelevant. If a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property, no less than if the State had physically appropriated it or destroyed its value by regulation. ‘[A] State, by ipse dixit, may not transform private property into public property without compensation. [Citation].” (Id. at 714; emphasis, the Court’s.)) In sum, “[i]t would be absurd to allow a State to do by judicial decree what the Takings Clause forbids it to do by legislative fiat.” Ibid.

Stop the Beach Renourishment was hardly the first time the Court addressed this issue. In Hughes v. Washington, 389 U.S. 290 (1967), the U.S. Supreme Court dealt with a new construction of the state constitution by the state supreme court that changed the rules governing accretion. Previously, such accreted land belonged to the owner of the adjoining oceanfront property. But the state supreme court changed the rule, making that land (which would have been the vested interest of the private owner) public land. Ipso facto. The federal constitution would not permit it. As Justice Stewart put it in an oft-quoted concurring opinion: “the Due Process Clause of the Fourteenth Amendment forbids such confiscation by a State, no less through its courts than through its legislature….” (Id. at 298; emphasis added.)

In Chicago B. & Q.R. Co. v. City of Chicago, 166 U.S. 226 (1897), the Court summarized the law (citing cases dating back as early as 1879: “the prohibitions of the amendment refer to all the instrumentalities of the state,—to its legislative, executive, and judicial authorities,—and therefore whoever, by virtue of public position under a state government, deprives another of any right protected by that amendment against deprivation by the state, ‘violates the constitutional inhibition; and as he acts in the name and for the state.” (Emphasis added.)

Indeed, the California Court of Appeal has noted that “[t]he lesson we take from Stop the Beach” was “that where it has been determined that a court action eliminates an established property right and would be considered a taking if done by the legislative or executive branches of government, it must be invalidated as unconstitutional, whether under the takings or due process clauses.” Surfrider Foundation v. Martins Beach 1, LLC (2017) 14Cal.App.5th 238, 260.

So, why might this action by the California Supreme Court run afoul of the federal constitution? According to the petition, recognition of an implied exclusive easement was a radical change in the law, something that at least this property owner had never heard of. It converted part of what had been a fee simple ownership into a part of the property he could no longer access. In so doing, the state Supreme Court had taken a slice through the owner’s entire bundle of property rights, specifically including the rights of possession, control, exclusion, enjoyment, and disposition. If true, the property owner may get his chance to prove those invasions at trial.

But he has to get through the U.S. Supreme Court first.