Judges: JAMES D. \"BUDDY\" CALDWELL, Attorney General
Filed Date: 5/21/2010
Status: Precedential
Modified Date: 7/5/2016
Dear Representative White,
You have requested an opinion of this Office regarding whether compensation must be paid by the government to a landowner when an amendment to a city ordinance ultimately results in a regulatory taking of private property. A regulatory taking is one that occurs when governmental regulations compel a property owner to suffer a physical invasion of property or denies the owner of all economically beneficial or productive use of his land.1 A regulatory taking may also occur "if there has been a substantial diminution in value to such an extent that there has been a destruction of a major portion of the property's value."2
In addition, the federal flood program regulations specifically provide the foundation for states and communities, in the program, to adopt and enforce voluntary standards that "exceed the minimum criteria . . . by adopting more comprehensive floodplain management regulations."6 These regulations also provide that "any floodplain management regulations adopted by a state or a community which are more restrictive than the criteria set forth in [the NFIP] are encouraged and shall take precedence."7
A. In order to secure for the citizens of the state of Louisiana the flood insurance coverage provided for by the National Flood Insurance Act of 1968,
B. The office of public works, hurricane flood protection, and intermodal transportation shall cooperate with the Federal Insurance Administrator of the Federal Emergency Management Agency in the planning and carrying out of state participation in the National Flood Insurance Program and shall aid, advise, and cooperate with parishes and municipalities endeavoring to qualify for participation in said program.
C. Before construction of any project for local flood protection, or any project for hurricane or storm damage reduction which involves federal assistance from the Secretary of the United States Army, the local parish or municipality shall agree to participate in and comply with all applicable federal flood plain management and flood insurance programs, as required by
D. Each parish and each municipality shall agree to participate in and comply with all applicable provisions of the federal flood plain management and flood insurance programs, as required by
The NFIP, while labeled as a "voluntary" program, is the only way municipalities can obtain federal assistance in dealing with flood and hurricane damages. Participation in the NFIP enables smaller communities, like the City of Zachary, to provide assistance to its constituency in times of need, but also subjects these communities to laws and regulations created by the federal government and FEMA.
The City of Zachary has enacted Chapter 46 in its Code of Ordinances which adopts the NFIP through a direct reference to La.R.S.
A regulatory floodway is defined as a channel of a river or other watercourse and the adjacent land areas that must be reserved in order to discharge the base flood without cumulatively increasing the water surface elevation more than a designated height.13
The property in question was not originally included in a "floodway," when purchased and sub-divided by the developer. However, pursuant to the adoption of recent revisions of FEMA flood maps, the land in question is now located in a floodway and the owner bears the burden of proving that any construction conducted thereon will not increase flooding in the area.14 This requirement indisputably carries a nearly impossible burden of proof to which any landowner will have trouble satisfying.
With regard to when the these FIRMs apply, the Code of Federal Regulations state that "[t]he Federal Insurance Administrator will provide the data upon which flood plain *Page 5 management regulations shall be based."15 These regulations further state that "when special flood area designations and water surface elevations have been furnished by the Federal Insurance Administrator, they shall apply."16 Therefore, since the City of Zachary participates in the NFIP, the special flood area designations and water surface elevations applied the moment they were released by FEMA. These particular maps were effective on May 2, 2008.17 The City of Zachary, on March 11, 2008, also adopted Ordinance 2008-07, which states:
[t]he areas of special flood hazard identified by the Federal Emergency Management Agency in the current scientific and engineering report entitled, "The Flood Insurance Study (FIS) for East Baton Rouge Parish and Incorporated Areas," dated May 2, 2008, with accompanying Flood Insurance Rate Maps for East Baton Rouge Parish and Incorporated Areas dated May 2, 2008 and any revisions thereto are hereby adopted by reference and declared to be a part of this chapter.18
As a result of this immediate decrease in the usefulness or value of the Property, caused by the effects of the map revisions referenced herein, we must next consider whether or not a taking, in the constitutional sense, has occurred.
In this opinion, the tract at issue was rendered partially useless when the property was placed in a "floodway." Being designated as a floodway means that the owner of the Property bears the burden of proof in showing that any construction conducted on the property will not increase flooding in the area. This burden of proof is nearly impossible, and its existence automatically reduces the value of the Property. The primary issue involved here is whether or not this particular reduction of property value amounts to a "regulatory taking," which requires the payment of just compensation under both the United States and Louisiana Constitutions.23
The United States Supreme Court ruled on an issue very similar to this one in Lucas v. South Carolina Coastal Council.24 InLucas, the owner of beachfront property brought an action alleging that the application of South Carolina Beachfront Management Act to his property constituted a taking without just compensation. Lucas, the petitioner, had purchased two residential lots on a South Carolina barrier island, intending to construct residential housing on these parcels. At the time of purchase, such a use of the property was permissible. Two years later the South Carolina Beachfront Management Act was enacted, which barred Lucas from erecting any permanent habitable structures on the parcels. Lucas filed suit alleging that the ban on construction deprived him of all "economically viable use" of his property. He further alleged that this deprivation of use effected a taking and triggered the requirement of just compensation.
In the situation discussed in this opinion, the private landowner (developer) is alleging that the City of Zachary took his property by adopting map revisions which placed his property in a "floodway." As a result of this property being placed in a floodway, the developer would most likely allege that the Property was taken for the public purpose of safety, to avoid flooding in the area. The developer is ultimately asserting a claim much like the one in Lucas which states that the ban on construction deprived him of all "economically viable use" of his property and, therefore, effected a taking which requires just compensation. *Page 7
In Lucas, the Court held that there are two types of regulatory actions that can categorically be characterized as a "taking" without undertaking a thorough factual analysis. These actions are: (1) regulations that compel the property owner to suffer a physical "invasion" of his property, and (2) regulations which deny an owner all economically beneficial or productive use of land.25 Lucas, therefore, sets forth a rule that owners physically deprived of property or deprived of all economically beneficial use their property are categorically entitled to compensation.26 The Court further held that an owner not deprived of all use simply does not benefit from the categorical analysis and must undergo a fact-specific determination.27 In considering the facts set forth in your opinion request, we are most likely dealing with regulations which deny an owner of a significant percentage and/or all of the economically beneficial or productive use of his land.
While regulations that deny an owner of all economically beneficial or productive use of land will most likely be considered a categorical taking under the holding in Lucas, "an unconstitutional taking of private property does not result merely because the owner is unable to develop it to its maximum economic potential."28 The United States Supreme Court has held that "[a]nything less than a "complete elimination of value," or a "total loss," . . . [will] require the kind of analysis applied in Penn Central.29 In PennCentral, the Court stated, "we have frequently observed that whether a particular restriction will be rendered invalid by the government's failure to pay for any losses proximately caused by it depends largely `upon the particular circumstances [in that] case.'"30 The Court also indicated that the proper focus must be on remaining uses of the property in light of the regulatory action, rather than on the diminution in value.31 *Page 8
Louisiana courts have held that "if the regulation deprives a property owner of all practical use of his property without compensation will an unconstitutional taking have occurred."32 While a substantial portion of the property described in your opinion request has already been developed, it is the understanding of this Office that the area in question was sub-divided prior to any of this development.33 Considering the fact that several of these sub-divided areas are now primarily or completely located within a floodway, the burden of proving that these tracts are economically useless hinges upon whether or not the developer can prove, in a court of law, that he has been deprived of all practical use of these tracts.34 While this opinion may make certain limited conclusions with regard to the facts provided, the consideration of various factual nuances and a meaningful application of the law to those facts remains within the province of the courts.
To establish inverse condemnation, the landowner will have to show that: (1) a recognized species of property right has been affected; (2) the property has been taken or damaged in a constitutional sense; and (3) the taking or damaging was for a public purpose under La.Const. art. 1 § 4.38
In considering an inverse condemnation action for facts presented in your request, it is clear that the owner's rights to the property have been affected by the property being classified as a "floodway." It is also clear that the floodway designation of the property was for the public purposes of safety and flood control. The issue then turns to whether or not the property has been taken or damaged, in a constitutional sense, which is a fact specific determination that only a court of competent jurisdiction can make. The Louisiana First Circuit Court of Appeal has held that a governmental taking may occur in the form of zoning or rezoning.39 An unconstitutional taking of private property does not, however, result merely because an owner is unable to develop it to its maximum economic potential.40 The First Circuit held that a regulatory program that adversely affects property values does not constitute a taking unless it destroys a major portion of the property's value.41 Once again, the question of whether a compensable taking has occurred is one that only a court can answer.
Here, the first and third requirements are easily satisfied. The property rights of the developer were affected immediately once the property was placed in a floodway the *Page 10 "taking" was clearly for a public purpose, establishing the floodplain for public safety. The issue here is whether or not the property has been taken or damaged in a constitutional sense. While the developer's property rights were adversely affected, a court must decide whether the level of adverse affect and damage to the property was taken or damaged in a constitutional sense.
We trust this adequately responds to your request. If you should have any questions about the response contained herein, please feel free to contact our office.
Yours very truly,
JAMES D. "BUDDY" CALDWELL ATTORNEY GENERAL
BY:__________________________ DANIEL D. HENRY JR Assistant Attorney General
JDC/DDH/jv
[b]efore construction of any project for local flood protection, or any project for hurricane or storm damage reduction, that involves Federal assistance from the Secretary, the non-Federal interest shall agree to participate in and comply with applicable Federal floodplain management and flood insurance programs.
Annison v. Hoover , 519 So. 2d 148 ( 1988 )
State Through DOTD v. Chambers Inv. Co. , 595 So. 2d 598 ( 1992 )
Annison v. Hoover , 517 So. 2d 420 ( 1987 )
Layne v. City of Mandeville , 633 So. 2d 608 ( 1993 )
Lucas v. South Carolina Coastal Council , 112 S. Ct. 2886 ( 1992 )
Penn Central Transportation Co. v. New York City , 98 S. Ct. 2646 ( 1978 )
Agins v. City of Tiburon , 100 S. Ct. 2138 ( 1980 )
United States v. Caltex (Philippines), Inc. , 73 S. Ct. 200 ( 1953 )
United States v. Central Eureka Mining Co. , 78 S. Ct. 1097 ( 1958 )
First English Evangelical Lutheran Church v. County of Los ... , 107 S. Ct. 2378 ( 1987 )
Dolan v. City of Tigard , 114 S. Ct. 2309 ( 1994 )
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional ... , 122 S. Ct. 1465 ( 2002 )