September 16th, 2015

Limousine Parking as a Public Use

Presidential candidate Donald Trump. The man, the legend. As he moves up in the polls of the Republican primaries, more and more news stories about his past and his business dealings are coming to light. One in particular caught the eye of this blog.

Eminent domain may only be used for a “public purpose.” The problem with this requirement is that one man’s public purpose is another man’s economic folly. In 2005, the US Supreme Court decided Kelo v. City of New London. There, the Court held that demolishing un-blighted housing for economic development (in that case, demolishing a neighborhood to install a Pfizer research center) met the public purpose prong required for all takings.

But a decade before the Kelo decision, that creative entrepreneur behind the Trump Taj Mahal in Atlantic City had his own view of ‘public purpose.’

In 1961, Vera Coking and her husband purchased the property at 127 Columbia Place in Atlantic City as a summertime retreat. In 1993, after thirty years in the home, Trump enterprises approached Ms. Coking offering to buy the property, seeking to use it, along with adjacent properties, as a parking area for limousines. When she refused to sell, Trump approached the New Jersey Casino Reinvestment Development Authority (CRDA) who had the power of eminent domain, and convinced them to initiate proceedings against Ms. Coking’s home. As Trump put it in a Fox News interview decades later:

I happen to agree with it [eminent domain for economic development] 100%. if you have a person living in an area that’s not even necessarily a good area, and … government wants to build a tremendous economic development, where a lot of people are going to be put to work and … create thousands upon thousands of jobs and beautification and lots of other things, I think it happens to be good.

Coking Home surrounded by the (now defunct) Penthouse Casino

Paved Paradise . . .

The CRDA offered Ms. Coking $251,000. However, Judge Williams, who presided over the case, rules:
The court considered the consequences and effects of these three condemnation actions and concluded that the primary interest served here is a private rather than a public one and as such the actions cannot be justified under the law.’
However, the Judge made clear that he would have granted the taking if there were express contractual obligations between Trump and the CRDA obligating Trump to use the property for the expressed purpose (i.e used expressly for additional parking and treescaping) and not other purposes. With no guarantee that the property would be put to that use, the Judge denied the condemnation.
The Kelo decision set off a firestorm of backlash and legislation against overreach and overuse of eminent domain, especially with a history of abuses like the saga of Trump’s Taj Mahal. Many states, like Florida, amended their statutes to limit the broad reading the Court took in Kelo. The Florida Statutes actually prohibit the transfer of condemned property to a private third party unless the property is first offered back to the former owner, at the price the condemning authority paid for it:

ownership or control of property acquired pursuant to [an eminent domain] petition may not be conveyed by the condemning authority or any other entity to a natural person or private entity, by lease or otherwise, except that ownership or control of property acquired pursuant to such petition may be conveyed, by lease or otherwise, to a natural person or private entity: [the statute then includes numerous accepted public use like roads, utilities, infrastructure and pipelines]

(f)?Without restriction, after public notice and competitive bidding unless otherwise provided by general law, if less than 10 years have elapsed since the condemning authority acquired title to the property and the following conditions are met:

1.?The condemning authority or governmental entity holding title to the property documents that the property is no longer needed for the use or purpose for which it was acquired by the condemning authority or for which it was transferred to the current titleholder; and
2.?The owner from whom the property was taken by eminent domain is given the opportunity to repurchase the property at the price that he or she received from the condemning authority;
So fret not, no “Trumping” here in Florida. In the Coking example, the family would have had the opportunity to purchase back the property at any time in the next ten years if the CRDA attempted to sell it to Trump or one of his businesses.


June 23rd, 2015

A Trip South: Expropriation in Venezuela

Here in the U.S. and all Anglo-Western legal systems, condemnation or expropriation requires compensation. You can’t take people’s stuff without paying for it, even if you are the sovereign.

Not so much in other parts of our planet. For a fascinating look at the economic realities and impacts of outright seizure of property, take a look at the D.C. Circuit’s opinion in Helmerich & Payne Int. Drilling Co. v. Bolivarian Republic of Venezuela, No. 13-7169 (May 1, 2015).

Oil is the life-blood of the Venezuelan economy.

Oil is the life-blood of the Venezuelan economy.










Helmerich had operated oil and gas drilling operations in Venezuela (the only non-Middle East founding member of OPEC) for over 60 years, including leasing equipment through subsidiaries to the Venezuelan National petroleum company (PDVSA).  When one such Helmerich subsidiary began disassembling the drilling rigs leased to PDVSA  due to PDVSA’s falling nearly $63 million behind on lease payments for drilling equipment, Venezuela reacted as only a sovereign can.


Here to enforce the expropriation of your assets.

Here to enforce the expropriation of your assets.


The Foreign Sovereign Immunities Act generally protects foreign nations from suit in U.S. Courts except in certain circumstances. One such exception is forcible expropriation.

As with all Nationalistic Dictatorships, Venezuela couldn’t keep its mouth shut, issuing press releases such as statements by the president of the Venezuelan Committee on Energy and Mines:

criticiz[ing] opponents of the nationalization for acting “in accordance with the instructions of the [U.S.] Department of State” and trying to “subsidize the big business transnational corporations, so that they can promote what they know best to do, which is war . . . through the large military industry[] of the Empire and its allies.

and official National statements like:

[Venezuela] emphatically reject[s] statements made by spokesmen of the American empire—traced [sic] in our country by means of the oligarchy.


A few weeks after the blockade, the Venezuelan National Assembly issued a statement making the seizure pretty clear. In a comically titled “Bill of Agreement” the government proclaimed

[Helmerich’s] property to be “of public benefit and good” and recommending that then-President Hugo Chavez promulgate a Decree of Expropriation. President Chavez issued the decree, which emphasized that “the availability of drilling equipment [such as Helmerich’s] is very low both in the country and at world level, and the lack thereof would affect [Venezuela’s national oil drilling] Plan.” The decree directed PDVSA to take “forcible” possession of H&P-V’s drilling rigs and other property.

Id. at 5.

Two eminent domain lawsuits filed in Venezuelan Courts resulted in failed service of process and an indefinite stay on the second. Helmerich and its subsidiary, seeing this was going nowhere, brought suit in the District Court for D.C. alleging a taking of property in violation of international law, claiming jurisdiction under the expropriation exception to the Foreign Sovereign Immunities Act.

In denying Venezuela’s motion to dismiss, the Court held that Hemerich was a foreign citizen, as corporations are nationals of the state under the laws of which the corporation is organized, an important holding since “generally, a foreign sovereign’s expropriation of its own national’s property does not violate international law.” Id. at 10. Put another way:

What another country has done in the way of taking over property of its nationals, and especially of its corporations, is not a matter for judicial consideration here. Such nationals must look to their own government for any redress to which they may be entitled. Id. at 10 (quoting U.S. v. Belmont, 301 U.S. 324, 332 (1937)).

Venezuela’s repeated propaganda relating to this seizure referencing ‘imperialist Americans’ ultimately was its undoing. International law makes clear that singling out aliens of a particular nationality’ for discrimination violates international law. The Court, in ruling that the pleadings for a motion to dismiss must be viewed in a light most favorable to the plaintiff (Helmerich) held that the complaint alleged sufficient facts, particularly those relating to Venezuela’s statements singling out Helmerich as American, for the Court to accept jurisdiction and continue to consider the case.

Helmerich has a long way to go and multiple additional hurdles to jump before a compensable expropriation claim can go before a judge or jury to determine compensation owed. Stay tuned . . .


May 13th, 2015

Katrina Flooding leaves Army Corps of Engineers Liable for a Taking

The Court of Federal Claims in  St. Bernard Parish Gov’t v. United States, No. 05-1119L (May 1. 2015) – has ruled in favor of a class of plaintiffs including St. Bernard Parish (Louisiana has parishes instead of counties) and citizens of the Ninth Ward in New Orleans for flooding damages they suffered when the levees broke during Hurricane Katrina. Plaintiffs asserted the United States, and specifically the Army Corps of Engineers, decisions to reroute the flow, build levees and failures in maintaining the levees led to the flooding and constituted an inverse condemnation/temporary taking of their property.

Spinning Nightmare

In a lengthy but fascinating opinion, the Court details the history of the extreme southern Mississippi River Delta and the changes made to the flow, including levee construction. Summing it all up, the Court held:

The Army Corps’ construction, expansions, operation, and failure to maintain the MR-GO caused subsequent storm surge that was exacerbated by a “funnel effect” during Hurricane Katrina and subsequent hurricanes and severe storms, causing flooding on Plaintiffs’ properties that effected a temporary taking under the Fifth Amendment to the United States Constitution.

For the whole opinion, click here brought to you by our friends over at inversecondemnation (see their full writeup on the case here.




June 4th, 2014

Osceola Parkway sparks resident furor

Look at all the landowners under that footprint

Look at all the landowners under that footprint

The Osceola Expressway Authority held a public meeting last Thursday night to roll out five alternative alignments of where their proposed roadway extension will be located. Project engineers attempted to explain to a packed house the process and need for the parkway. We were in attendance to see these proposed corridors and help property owners determine which ones would or would not impact them.

Many home and property owners indicated this was the first they were hearing of the parkway potentially impacting their homes or property. This is alarming. Even worse, many of these owners were even more confused and surprised to find out their properties, many of which are in Orange County, are being threatened by the Osceola County Expressway Authority.

Pursuant to legislation the Governor is expected to sign soon, the Orlando/Orange County Expressway Authority will become the Central Florida Regional Expressway Authority which will have board members drawn from Seminole, Orange and Lake Counties. Osceola County was to merge into the CFREA, but that was delayed by certain legislators who fought to delay the Osceola County Expressway Authority’s absorption until 2018, giving the Osceola Expressway Authority time to complete 3 major projects, including the extension of Osceola Parkway. Given the significant opposition that showed up to make their voices heard on Thursday, some serious decisions need to be made and quickly so that these hundreds of property owners, home owners and developers are not stuck in limbo waiting to find out if their property will be impacted.


See News13’s story here.

WFTV covered the meeting as well, here.






April 11th, 2014

Bailouts a Taking?

Another victim on the Boulevard of Broken Dreams
Photo by John Martinez Pavliga, Berkeley, USA

Here’s an unusual takings (maybe?) case making its way through the Federal Courts:

A&D Auto Sales v. U.S.

The issue goes something like this. As part of the bailouts of GM and Chrysler, the Feds mandated that these two automakers cancel franchise agreements with certain dealerships, including the Plaintiffs.

Plaintiffs brought suit alleging a taking of their franchise agreements. But are these franchise agreements ‘property’ as defined by the Constitution and case law protecting property? The government argued no, moving to dismiss the case and also argued that the terminations were not causally linked to the government demands.

The Court of Federal Claims refused to dismiss, and the Federal Circuit agreed, saying this unique case of first impression warranted a continued look, but sent the case back down for the Plaintiffs to amend their complaint to more clearly define and explain that the government action, not the financial situation for GM and Chrysler, caused the loss in value.

Stay tuned, this could get interesting as more facts are developed in the case.