Update #2 (April 5, 2011): DeCook v. Rochester International Airport Joint Zoning Board, a Minnesota Supreme Court decision issued last week, represents a sonic boom that may shake and rattle Minnesota Airport commissions and municipalities for some time to come (previous related posts, after the jump). A $170,000 diminution in value in a piece of property near an airport — that is, a 3.5%-6.4% diminution in value — was held by the Minnesota Supreme Court to be “a substantial and measurable decline” in property value and a “taking” of the plaintiff’s land requiring “just compensation” by the government’s regulatory entity under the Minnesota Constitution.
The ramifications of this decision, the potential revenue hit on airport commissions and Minnesota municipalities, could be dire (at a time when our cities and towns really do not need another monetary gash and financial hemorrhage). The Minnesota Supreme Court has held that the regulation’s impact on the value of the DeCook’s land constitutes a taking pursuant to the Minnesota Constitution, regardless of the fact that it would not be considered a taking under the U.S. Constitution. (Opinion at 11.)
The DeCook’s property was in “Zone A,” as described by the applicable regulations. The Minnesota Supreme Court’s opinion appears to apply not only to “Zone A” property, but the more-distant-from-the-airport and wider swath of affected property in “Zone B” (Opinion at 14) (“When an airport ordinance regulates land use within runway safety zones, there must be compensation to landowners…”).
How this will play out over time with regard to Minnesota airport zoning process, decision-making, and the public fisc remains to be seen. For the time being, however, this is plainly a major win for private property owners in their challenges to public works that impact their property. This is a significant win for Brad Gunn at Malkerson Gunn Martin LLP, who represented Mr. Leon S. DeCook and others. (As the case was decided as a matter of state constitutional law, reversal by the U.S. Supreme Court or a quick legislative “fix” seems unlikely.)
Update (February 2, 2011): In this adjudicatory collision course, described below, the Minnesota Supreme Court has now granted the petition for review of the Minnesota Court of Appeals Interstate v City of Bloomington decision and stayed it.
Original Post (November 11, 2010): Civil litigators all know of the proverbial “race to the courthouse,” in which litigants rush to file suit in their forum of choice to prevent the other side from picking a less favorable or convenient venue. But could there be instances of races FROM the courthouse when, say, a court issues a ruling quickly in advance of another pending case before a different court?
When public works have an impact on private land — when a public entity does not condemn and take private property outright but undertakes projects on nearby land, say, that negatively impact the value of ones property, when does the public entity have to compensate the land owner for a “taking”?
The issue was argued before the Minnesota Court of Appeals on October 14 (in Interstate), and again before the Minnesota Supreme Court on November 2 (in DeCook), and, this week, with atypical speed, the Court of Appeals issued an opinion that would seem to make new law in the state of Minnesota more favorable to private land-owners in inverse condemnation cases.
This week, the Minnesota Court of Appeals (Klaphake, Halbrooks, Harten, Klaphake writing for the panel) issued a decision in such a case, an inverse condemnation case, reversing the Hennepin County District Court (Judge Denise Reilly) that could signal an important development in Minnesota takings law.
The Court of Appeals held that the district court “failed to consider the more restrictive language of the Minnesota Constitution (Art. 1, § 13), which provides greater protection to a property owner than the United States Constitution.” F0r the proposition that the Minnesota Constitution affords landowners greater protections than the U.S. Constitution, the Court of Appeals cited a 1980 Minnesota Supreme Court decision, McShane v. City of Faribault, 292 N.W.2d 253 (Minn. 1980). The conclusion is hardly compelled, however, by McShane. (See ftn. 14 in the Minnesota Supreme Court’s case in Wensmann Realty.) Moreover, the Court of Appeals was aware of the pending DeCook case in which the very issue is to be addressed.
Are public entities in Minnesota going to be held to a new, different, and higher standard for compensating private landowners for the diminished value of their property attributable to public works? Should those who are concerned about the stress on state and local government coffers in our current economic circumstances ratchet up their worry a notch or two?