Eminent
Domain Case Analysis
July
16, 2007
This
is the most fractured decision of the court this term, and reckoning its holdings
requires an XY chart, with seven justices spanning one axis and 2 issues spanning
the other axis.
The
first issue is whether replacement property implicates the Takings Clause. Justice
Prosser says it does; Justices Roggensack, Wilcox and Crooks say it does not.
Chief Justice Abrahamson and Justice Bradley say the issue is not relevant to
the case and should not even be addressed. Justice Butler’s opinion is even
more enigmatic; footnote 10 of the opinion states that only Roggensack, Wilcox,
and Crooks join the lead opinion’s discussion of the constitutional issue,
but his dissent is silent on the issue, and only considers statutory issues.
Theoretically,
if the issue were properly framed and preserved, that leaves a majority of four
justices who could conclude that, even if a condemning authority complies with
the statutes, it could still violate the Takings Clause by failing to provide
adequate compensation for replacement property.
The
second issue is whether a condemning authority can comply with the statute merely
by making best efforts to find replacement property for the owner, as the court
of appeals concluded in Dotty Dumpling’s Dowry, Ltd., v. Community Development
Authority of Madison, 2002 WI App 200, 257 Wis.2d 377, 651 N.W.2d 1.
To
put it another way, suppose the fair market value of a business is only $500,000,
but to set the business up properly at a new location will cost $1.5 million;
is the condemnor obligated to pay $1.5 million to do so?
Justices
Roggensack and Crooks, the only two justices who join the lead opinion in its
entirely, and wholly embrace the court of appeals decision in Dotty, say no —
the condemnor need not pay that much and can proceed with the condemnation, anyway.
The concurrence by Bradley and Abrahamson also apparently embraces this position;
the concurrence objects solely to the lead opinion’s discussion of constitutional
issues.
The
dissent of Prosser clearly rejects this position, as do the dissent of Butler
and the concurrence of Wilcox (both of which impose more stringent requirements
on condemning authorities to provide “comparable” replacement properties,
with Butler being more exacting). However, the four justices who make up the lead
opinion and the Bradley concurrence do not require such close comparisons of the
two properties.
Thus, assuming
any constitutional objections are met, condemnors are not under any great obligation
to find a comparable property. They need only meet the obligations imposed by
the court of appeals in Dotty: “identifying potential replacement properties;
obtaining renovation cost estimates for properties in which the condemnee expressed
an interest; tendering the maximum business replacement payment; and offering
to reimburse the condemnee for its other statutorily authorized relocation expenses.”
As
a result, if a municipality in a future case takes property via eminent domain,
but cannot find any replacement property that is actually financially feasible
as replacement property, despite reasonable efforts, a majority of four of the
justices agree that the municipality can obtain the property without any statutory
impediment.
In
order to contest such an action, a property owner will have to contest the condemnation
on just compensation grounds. The owner will have Justice Prosser solidly in its
corner. To win the challenge, it must win over three of the following four justices,
whose views on the issue cannot be determined from this opinion: Chief Justice
Abrahamson, Justice Bradley, Justice Butler, and Justice-elect Annette Ziegler.
In
the lower courts, however, the property owner will have no hope of winning, but
must merely preserve the issue for potential review in the Supreme Court. Lower
courts will have no choice but to follow the holding in Hasselblad v. City of
Green Bay, 145 Wis.2d 439, 427 N.W.2d 140 (Ct.App.1988), that there is no constitutional
right to compensation for relocation expenses.
Click
here for Main Story.
David
Ziemer can be reached by email.
