Nevada Complex Litigation

BLM Whistleblower Wins Lawsuit Over Mismanagement of Nevada Toxic Mine Cleanup

Earle Dixon was hired by the US Bureau of Land Management in October 2005 to oversee the cleanup of the Anaconda Mine in Yerington Nevada.  His employment included a 1 year probationary period. 

On September 9, 2004 Dixon’s immediate supervisor certified that Dixon’s performance, conduct and general traits of character had been satisfactory and recommended Dixon be retained beyond the probationary period.

In October 2006, one week before the end of his probationary period, Dixon was fired.
  
Dixon filed a whistleblower lawsuit.  The complaint outlined violations of numerous federal laws including the Safe Drinking Water Act, the Clean Air Act, Superfund, the Toxic Substances Control Act and the Occupational Health and Safety Act.
 
The complaint also outlines a number of problems which were not addressed by his superiors because they would drive up remediation costs and cause political problems.

In September 2006 an administrative law judge ruled that the U.S. Bureau of Land Management illegally fired Dixon for speaking out about the health and safety dangers at the toxic Anaconda Mine site.  The judge ordered the BLM to pay Earle Dixon two years worth of back pay and benefits totaling over $120,000.

The BLM appealed the decision to the U.S. Labor Department's Administrative Review Board.  The Board upheld the decision.  The board also upheld the judge's order for the BLM to reimburse Dixon for $10,000 in moving expenses after he was fired in October 2005 as well as attorney fees and costs expected to exceed $50,000.  The final ruling may be viewed HERE.

The review board determined that the BLM fired Dixon because he "raised concerns that the contamination at the Yerington site was much greater than previously documented," and "refused to back down from his conclusions about worker health and safety issues."

Dixon had requested punitive damages of up to $1 million.  The board rejected that request stating "Nothing in this record would support an award of any amount of punitive damages…”

Nevada Supreme Court Rules Against Clark County “Taking” of Eminent Domain Interest

In 1995 the City of Las Vegas declared eminent domain on a half-acre lot owned by Paul Moldon, near the Stratosphere.  Moldon challenged that action resulting in the city depositing $725,000 (the city’s assessment of value) into a Clark County trust account.

In this type of action, Moldon had the option of drawing those funds out of the trust account, but chose to leave them on deposit with the court pending final determination relating to the legalities of the “taking” and the actual value of the property.

Moldon challenged the legality of using eminent domain to take his land for no apparent public use since the city of Las Vegas only planned on transferring/selling it to the Stratosphere for future expansion.

Moldon lost that challenge, and later (2005) in an unrelated case the US Supreme Court in the landmark Kelo decision ruled that government entities could use eminent domain to transfer ownership of property from one private owner to another.

The value of Moldon’s property was determined by a jury in 2005 to be $1,570,000 on the date of “Taking”  (April 1995). In November of 2005, Moldon requested an order directing the District Court clerk to release $725,000 deposited 10 years earlier and the interest earned on that deposit.

Clark County opposed this request citing NRS 355.210, which directed that interest earned on money deposited with the court be placed in the applicable local government’s general fund.

The District Court denied Moldon’s request regarding accrued interest.  Moldon appealed.

Last Month, the Nevada Supreme Court ruled in Moldon’s favor.

The Supreme Court Opinion states:

            “The Moldons are entitled to the interest earned on the condemnation deposit because they had a property interest in the condemnation deposit.  The district court clerk’s act of placing the interest earned from the condemnation deposit into Clark County’s general fund caused a taking in violation of the Fifth and Fourteenth Amendments.  Consequently, former NRS 355.210 was unconstitutionally applied to allow such takings.
            Accordingly, we reverse the district court’s order providing that the Moldons were not entitled to the interest earned on the condemnation deposit, and we remand this matter to the district court so that the district court may determine the amount of interest owed to the Moldons on the condemnation deposit.”

More history on the Moldon property eminent domain saga can be found in this 2004 Review-Journal article.  Also, according to the Review-Journal, Stratosphere owner Carl Icahn “flipped” this property and sold it for $18 million and it remains undeveloped.

Hage v. US Decision Ends 17 Year Fight Over Nevada Ranch

Wayne and Jean Hage filed their "taking" case in 1991. The Hages claimed the U.S. Forest Service and Bureau of Land Management had denied their rights to graze their livestock on federal land and prevented them from accessing and maintaining their water rights.
 
Established in 1865, encompassing 7000 acres Pine Creek Ranch in Monitor Valley Nevada was purchased by the Hage family in 1978. Their problems with the federal government started in 1979 when the US Forest Service allowed the release of non-indigenous elk on the Hages’ Table Mountain grazing allotment.  The elk immediately started competing with the cattle for food and water.

The government then started diverting water away from the Hage ranch and fenced off other access to water.  Much of this case was about whether the Hage family owned the rights to the water the government took from the ranch.

Last month, Loren A. Smith, Senior Judge for the United States Court of Federal Claims issued his final opinion in Hage v. United States (Case No. 91-1470L).   His decision found that that the federal government in fact took the private property rights of E. Wayne and Jean Hage and awarded them deserved compensation.
 
The court ruled that the Hages owned the water rights, ditch rights of ways, and range improvements on the federal grazing allotments. The court made clear that the government has the right to authorize grazing, but does not have the right to prevent the plaintiff from accessing their water rights on federal lands.

Sadly, neither Jean or Wayne Hage were able to see this victory, both have passed away.  Thus, Judge Loren Smith awarded the estates of Wayne and Jean Hage $4.2 million in compensation for physical and regulatory takings, plus 17 years of interest and attorney's fees, which will likely amount to an additional $4.4 million.
 
Margaret Byfield, the Hages’ third daughter commented "My parents wanted resolution. They were told by the agencies that they had no property rights on the federal lands. They pursued this case so that this 60-year conflict between ranchers and agencies could be settled, and future generations of ranchers would have the security of their property rights. They succeeded."

Byfield added, "This decision is important to every American because it reaffirms our basic right to own property, whether you live in a major U.S. city or rural America."

This was the 4th and final decision in this saga.  Links to all 4 decisions can be found on this page.

Edgewater Colorado Protects Personal Property Rights

In response to the trend of government entities “taking” land by eminent domain and transferring it to private developers, Edgewater Colorado has updated its city charter.

The citizens have adopted an update that will in effect double “just compensation” paid to a property owned  under eminent domain, if the property is used for private development within 10 years of the “taking”.

In effect, if the city wants or needs private land for public infrastructure, it’s eminent domain as usual.  But the new charter is written to eliminate incentives for the city to acquire private property by eminent domain and transfer/lease/sell it to private developers.

Edgewater has no property being threatened by eminent domain and has not used the eminent domain process for twenty years.  This is more of an insurance policy for the future protection of all Edgewater Colorado property owners.

Wikipedia paints a somewhat bleak economic picture of Edgewater.  Only time will tell whether this is a beneficial move for the city of Edgewater and its property owners.

To view the entire new charter, visit the Edgewater Colorado website.  For your convenience, we have provided just the eminent domain provisions of Edgewater's new charter HERE.

California Passes Proposition 99: Reforms Eminent Domain Law

In our April 16, 2008 post, we wrote about the 2 Eminent Domain Reform initiatives on the California ballot.   On June 3rd, California voters defeated Proposition 98 and passed Proposition 99.

Here is an excerpt from the State of California Legislative Analyst's Office description of Proposition 99:

This constitutional amendment limits state and local government’s use of eminent domain in certain circumstances. Specifically, the measure prohibits government from using eminent domain to take a single-family home (including a condominium) for the purpose of transferring it to another private party (such as a person, business, or association).

This prohibition, however, would not apply if government was taking the home to:

• Protect public health and safety.
• Prevent serious, repeated criminal activity.
• Respond to an emergency.
• Remedy environmental contamination that posed a threat to public health and safety.
• Use the property for a public work, such as a toll road or airport operated by a private party.

In addition, the prohibition would not apply if the property owner did not live in the home or had lived there for less than a year.

Determining the Value of Property in Eminent Domain; Is Enough ever Enough?

Establishing the value of property is always a focal point of eminent domain actions.  The government entity “taking” the property wants to pay the lowest possible fair price which is in the best interest of the taxpayers, whose money is being spent/invested.  Again for the benefit of the taxpayers, the government entity wants to minimize legal costs throughout the eminent domain proceedings.

Of course, the property owner wants as much as possible for the property being “taken”.  Such is the case of Dr. Ira Trocki.

In 1998, Dr. Trocki purchased the historic Armstrong World Industries office building on Lancaster Square in Lancaster PA for $12 Million.

In 2004, Lancaster County acquired the property through Eminent Domain for use as a county office building, and paid Dr. Trocki $8.3 Million.

Trocki sued in Federal Court. 

U.S. District Court Judge James Knoll Gardner appointed a three member panel to determine the fair market value of the property.  Last month, that panel determined the value to have been $14.5 Million when the county took it over.  The judge ordered the County to pay Trocki an additional $6.2 Million (above the original $8.3 Million) plus $1.6 million in interest.

Lancaster County decided not to appeal.  Dr. Trocki has decided that he will.  Dr. Trocki believes that the property was worth $21 Million at the time of the eminent domain “taking”.

Chairman of the Lancaster County Board of Commissioners, Dennis Stuckey said Trocki's appeal was "disappointing" but that the county would defend "to the best of our ability, the taxpayers of Lancaster County."

Will US Supreme Court Reconsider “Kelo” for Atlantic Yards?

Developer Bruce Ratner envisions a mixed use 22 acre $18 Billion project to include affordable housing and a professional sports arena in Brooklyn.  About a dozen residents within the proposed development area are asking the US Supreme Court to review their property rights lawsuit.

While the proposed "Atlantic Yards" development (photo at left) has received the support of New York Governor Pataki, the state Senate majority leader, Joseph Bruno, and the Assembly speaker, Sheldon Silver, it prompted residents to file a lawsuit against Pataki to stop the lawsuit.

To date, the lawsuit has been dismissed by two federal courts. Attorney for the residents, Matthew Brinkerhoff has petitioned the US Supreme Court asking for a chance to prove their allegation that the Atlantic Yards project is more about a plan to benefit Bruce Ratner than to benefit the public.

Brinkerhoff’s petition also states that the project never received the approval of either the City Council or state Legislature.

Will the US Supreme Court revisit the 2005 Kelo decision which provides government entities the power to seize properties by eminent domain for use by private developers?

It is more likely that the Supreme Court will deny the residents petition and just let Kelo stand.  But only time will tell.  As shown below (Eminent Domain on California Ballot), forward thinking states are trying to strengthen the property owners’ rights which were weakened by the Kelo decision.

Eminent Domain on California Ballot

There are two eminent domain related propositions on the California Ballot in the upcoming election.  They are both being promoted as protection for California citizens against eminent domain abuse.  Many believe that the 2005 US Supreme Court “Kelo” decision allows governmental agencies too much freedom in eminent domain actions. 

California voters will have a chance to restore property owners’ rights to a degree by voting on Propositions 98 and 99 on the June ballot.  The biggest difference between them is that Prop 98 contains provisions to eliminate rent control in California in addition to eminent domain reform.

The State of California has a Legislative Analyst's Office which has prepared non partisan descriptions of both propositions and potential ramifications.  You may view them by clicking Proposition 98 and Proposition 99.

Since Nevada lawyers often cite California law when Nevada has no applicable law, these propositions might well have impact on future eminent domain proceedings in Nevada.

Additionally, here is an opinion piece about the abuse of eminent domain law in Missouri in which the author Timothy Sandefur illustrates the need for reform on a state level.

Lastly, here is an article by Ilya Somin an assistant professor of law at George Mason University, who questions why eminent domain/property owners’ rights are not issues in our current presidential campaign. He also suggests steps our next president could take to strengthen property owners’ rights.  Somin’s amicus brief in the Kelo case was cited by the Supreme Court in its opinion.

Eminent Domain: Inverse Condemnation

Inverse condemnation is a term used to describe a situation in which the government has engaged in an activity which results in the taking of private property but the government has not commenced an eminent domain action or paid just compensation.  In order to get compensation, the landowner is forced to sue the government. 

In these cases the landowner is the plaintiff and the government is the defendant, that is why the action is called inverse - the position of the parties is reversed, as compared to a direct eminent domain proceeding where the government is the plaintiff and has initiated a lawsuit against a landowner to take all or a portion of the landowner’s private property for public use. 

The taking suffered by a landowner in an inverse condemnation action can be a physical taking of private property, some other form of governmental interference in the landowner’s enjoyment of the land, or a regulatory taking caused by governmental regulations which are so onerous that they make private property unusable by the landowner for any reasonable or economically viable purpose.

Inverse condemnation proceedings are the constitutional equivalent to, and are governed by, the same rules and principles that are applied in a direct eminent domain action.  However, a landowner can recover attorney’s fees in an inverse condemnation action but cannot do so in a direct eminent domain proceeding.

Feel free to contact Attorney Bill Cooper if you have eminent domain questions related to your property or to a real estate transaction. He may be reached at 702-562-2269 or by email.

Eminent Domain: Regulatory Takings

A “regulatory taking” occurs when the value or usefulness of private property is diminished because of some regulatory action taken by a governmental entity.  A regulatory taking claim usually arises as a result of the implementation of land use planning and zoning ordinances, building codes, or environmental regulations.  If a regulatory taking has occurred, the landowner is entitled to initiate an inverse condemnation action to recover just compensation for the taking.  There are two categories of regulatory action that generally will be deemed per se takings:

1). The first category is when a government regulation requires an owner of property to suffer a permanent physical invasion of his or her property.  If so, the landowner is entitled to just compensation.   As an example, in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), the United States Supreme Court ruled that a state law requiring landlords to permit cable companies to install cable facilities inside apartment buildings constituted a permanent taking for which just compensation had to be paid.

In McCarran Int’l Airport v. Sisolak, 122 Nev.Adv.Rep. 58 (2006), height restriction ordinances imposed by Clark County on property near McCarran Airport limited the landowner’s ability to build multiple story buildings and enabled airplanes to fly over the property at lower levels.  This constituted a permanent, physical invasion of the landowner’s airspace for which the landowner was entitled to just compensation.

2). The second category of per se takings is when a government regulation completely deprives an owner of “all economically beneficial use of her or his property”.  In Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), a landowner purchased two residential lots on which he intended to build homes.  Thereafter, the state enacted a regulation which barred the landowner from erecting any permanent homes on the two parcels.  The United States Supreme Court held that when a regulatory action denies a landowner of all economically viable use of his or her property, the landowner is entitled to just compensation.

Outside of these relatively narrow per se taking categories, other regulatory taking claims are governed by the standards set forth in Penn Central Transportation Company v. New York City, 438 U.S. 104 (1978), which require courts to engage in a three-pronged factual analysis to determine whether a governmental action constitutes a taking of private property.  The three-prongs are:

1). The character or nature of the governmental action;
2). The severity of the regulations economic effect on the landowner; and
3). The extent to which the regulation interferes with reasonable investment-backed expectations.