Joint Ventures, Inc. v. Department of Transp.

• Decision Date: 26 April 1990
• Docket Number: No. 71878,71878
• Parties: , 15 Fla. L. Weekly S246 JOINT VENTURES, INC., Petitioner, v. DEPARTMENT OF TRANSPORTATION, etc., Respondent.
• Court: Florida Supreme Court

Page 622

563 So.2d 622

58 USLW 2673, 15 Fla. L. Weekly S246

JOINT VENTURES, INC., Petitioner, v. DEPARTMENT OF TRANSPORTATION, etc., Respondent.

No. 71878.

Supreme Court of Florida.

April 26, 1990.

Rehearing Denied July 27, 1990.

S. Cary Gaylord and Alan E. DeSerio of Brigham, Moore, Gaylor, Wilson, Ulmer, Schuster & Sachs, Tampa, for petitioner.

Maxine F. Ferguson, Appellate Atty., and Thomas H. Bateman, III, General Counsel, Dept. of Transp., Tallahassee, for respondent.

BARKETT, Justice.

We have for review Joint Ventures, Inc. v. Department of Transportation, 519 So.2d 1069 (Fla. 1st DCA 1988), in which the district court asked in a certified question whether subsections 337.241(2) and (3), Florida Statutes (1987), unconstitutionally permit the state to take private property without just compensation. ¹ We answer the question in the affirmative, finding those subsections invalid as a violation of the fifth amendment to the United States Constitution and article X, section 6(a) of the Florida Constitution.

Joint Ventures, Inc., owned 8.3 acres of vacant land located adjacent to Dale Mabry Highway in Tampa. Joint Ventures had contracted to sell this property contingent upon the buyer's ability to obtain the permits necessary to develop it. Thereafter, the Department of Transportation (DOT) determined that 6.49 acres of this vacant land was needed for storm water drainage associated with the planned widening of the highway. In November 1985, DOT recorded a map of reservation in accordance with subsection 337.241(1), Florida Statutes (1987). ² DOT's recordation of the map of reservation precluded the issuance of development permits for this property under subsection 337.241(2):

Upon recording [the map of reservation], such map shall establish:

(a) A building setback line from the centerline of any road existing as of the date of such recording; and no development permits, as defined in s. 380.031(4), ³ shall be granted by any governmental entity for new construction of any type or for renovation of an existing commercial structure that exceeds 20 percent of the appraised value of the structure. No restriction shall be placed on the renovation or improvement of existing residential structures, as long as such structures continue to be used as private residences.

(b) An area of proposed road construction within which development permits, as defined in s. 380.031(4), shall not be issued for a period of 5 years from the date of recording such map. The 5-year period may be extended for an additional 5-year period by the same procedure set forth in subsection (1).

(Emphasis supplied.)

Joint Ventures contested DOT's reservation in an administrative hearing pursuant to subsection 337.241(3). ⁴ The hearing officer found against Joint Ventures and DOT later adopted the officer's findings and conclusions in a Final Order. On appeal to the district court, Joint Ventures argued that the moratorium imposed by section 337.241(2) amounted to a taking because the statute deprived it of substantial beneficial use of its property.

In opposition, DOT contended that the legislature did not "take" but merely "regulated" in a valid exercise of the police power. The district court concluded that the challenged subsections were constitutional because Joint Ventures had a remedy by way of an action for inverse condemnation. ⁵

Generally, the state must pay property owners under two circumstances. First, the state must pay when it confiscates private property for common use under its power of eminent domain. Second, the state must pay when it regulates private property under its police power in such a manner that the regulation effectively deprives the owner of the economically viable use of that property, ⁶ thereby unfairly imposing the burden of providing for the public welfare upon the affected owner. ⁷

Under the power of eminent domain, the state has the inherent right to take private property for public use without the consent of the owner. Shavers v. Duval County, 73 So.2d 684, 688 (Fla.1954). In so doing, the state is obliged to make full compensation. ⁸ Indeed, the Florida Legislature has implemented a complete statutory scheme in chapters 73 and 74, Florida Statutes (1987), to assure the payment of such compensation.

However, as Justice Holmes recognized, the "seemingly absolute protection" of required compensation is "qualified" by another inherent power of the state, the police power. Pennsylvania Coal Co. v. Mahon 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922). Although both powers impact on private property, there is a distinction between the power of eminent domain and the police power:

[T]he former involves the taking of property because of its need for the public use while the latter involves the regulation of such property to prevent its use thereof in a manner that is detrimental to the public interest.

J. Sackman, Nichols' The Law of Eminent Domain § 1.42, at 1-133 to 1-134 (rev. 3rd ed. 1988) (footnotes omitted, emphasis in original).

Although regulation under the police power will always interfere to some degree with property use, compensation must be paid only when that interference deprives the owner of substantial economic use of his or her property. In effect, this deprivation has been deemed a "taking." Agins v. City of Tiburon, 447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106 (1980); Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 138 n. 36, 98 S.Ct. 2646, 2666 n. 36, 57 L.Ed.2d 631 (1978). Thus, when compensation is claimed due to governmental regulation of property, the appropriate inquiry is directed to the extent of the interference or deprivation of economic use.

Here, however, we do not deal with a claim for compensation, but with a constitutional challenge to the statutory mechanism. Our inquiry requires that we determine whether the statute is an appropriate regulation under the police power, as DOT asserts, or whether the statute is merely an attempt to circumvent the constitutional and statutory protections afforded private property ownership under the principles of eminent domain.

Under its police power, the state is deemed to enact laws for the protection of the general welfare, that is, the public safety, health, morals, comfort, and general well being. Hav-A-Tampa Cigar Co. v. Johnson, 149 Fla. 148, 159, 5 So.2d 433, 437 (1941). ⁹ In the broad sense, when the state "takes" property, whether through its police power or power of eminent domain, it does so to promote the general welfare. Analytically, the two have been discussed in different terms. Regulation is analyzed in terms of the exercise of police power, whereas acquisition is analyzed in terms of the state's power of eminent domain. ¹⁰ First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 107 S.Ct. 2378, 2389, 96 L.Ed.2d 250 (1987); Agins, 447 U.S. at 260, 100 S.Ct. at 2141; Penn Cent. Transp. Co., 438 U.S. at 136, 98 S.Ct. at 2665; Pennsylvania Coal Co., 260 U.S. at 413, 43 S.Ct. at 159; art. X, § 6(a), Fla. Const.

In this case, DOT suggests that section 337.241 is a permissible regulatory exercise of the state's police power because it was necessary for various economic reasons. For example, without a development moratorium, land acquisition costs could become financially infeasible. If landowners were permitted to build in a transportation corridor during the period of DOT's preacquisition planning, the cost of acquisition might be increased. Rather than supporting a "regulatory" characterization, these circumstances expose the statutory scheme as a thinly veiled attempt to "acquire" land by avoiding the legislatively mandated procedural and substantive protections of chapters 73 and 74.

We find analogous the distinction drawn by the court in San Antonio River Authority v. Garrett Brothers, 528 S.W.2d 266, 273-74 (Tex.Ct.App.1975) [I]n exercising the police power, the governmental agency is acting as an arbiter of disputes among groups and individuals for the purpose of resolving conflicts among competing interests. This is the role in which government acts when it adopts zoning ordinances, enacts health measures, adopts building codes, abates nuisances, or adopts a host of other regulations.... But where the purpose of the governmental action is the prevention of development of land that would increase the cost of a planned future acquisition of such land by government, the situation is patently different. Where government acts in this context, it can no longer pretend to be acting as a neutral arbiter. It is no longer an impartial weigher of the merits of competing interest among its citizens. Instead, it has placed a heavy governmental thumb on the scales to insure that in the forthcoming dispute between it and one, or more, of its citizens, the scales will tip in its own favor.... To permit government, as a prospective purchaser of land, to give itself such an advantage is clearly inconsistent with the doctrine that the cost of community benefits should be distributed impartially among members of the community.

Indeed, the legislative staff analysis candidly indicates that the statute's purpose is not to prevent an injurious use of private property, but rather to reduce the cost of acquisition should the state later decide to condemn the property. Staff of Fla.H.R.Comm. on Transp., H.B. 314 (1985) Staff Analysis (March 25, 1985).

We perceive no valid distinction between "freezing" property in this fashion and deliberately attempting to depress land values in anticipation of eminent domain proceedings. Such action has been consistently prohibited. Board of Comm'rs v. Tallahassee Bank & Trust Co., 108 So.2d 74, 86 (Fla. 1st DCA 1958), writ quashed, 116 So.2d 762 (Fla.1959). Accord Kissinger v. City of Los Angeles, 161 Cal.App.2d 454, 462, 327 P.2d 10, 16 (1958); Robyns v. City of Dearborn, 341 Mich. 495, 499, 67 N.W.2d 718, 720 (1954); Long v. City...