Transcript of OA500: Eminent Domain!

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[Show Intro]

Thomas:         Hello and welcome to Opening Arguments, this is episode 500!

Andrew:         Woo!

Thomas:         [Siren Noises]

Andrew:         [Laughs]

Thomas:         How’s it going, Andrew?

Andrew:         Well, I began as fantastic and now I’ve moved up to whatever the level is above that.

Thomas:         Wow.

Andrew:         It’s our 500th show!  I’m super excited and obviously I’m excited for our subject matter.

Thomas:         Wait a minute.  There’s been a level beyond fantastic this whole time?

Andrew:         I know, and I haven’t been there.

Thomas:         And you’re just now kicking it into gear?

Andrew:         [Laughs]

Thomas:         Oh, 500!  And we are celebrating by me recording on worse audio quality on a laptop out at Disneyland.  We thought that would be the best way-

Andrew:         You are celebrating in Disneyland!

Thomas:         Yeah.

Andrew:         So that’s a good way to celebrate our 500th episode.

Thomas:         Yup!  I’m in a full body cast.  This is our traveling back day.  I did – so let’s see, this is real breaking news for you.  Sunday when we got here 10,000 steps, Monday 22,000 steps.

Andrew:         Yeah.

Thomas:         Tuesday 16,000, Wednesday 28,000.  All of that while pushing 80 lbs. of solid kid-

Andrew:         Yeah.

Thomas:         -in a stroller that wasn’t very good.  I’m dead.  I’m in a full body cast, like a cartoon one.

Andrew:         Disney trips you need a day off in the middle of that.

Thomas:         Yeah.

Andrew:         Three straight days-

Thomas:         That’s … a good idea.

Andrew:         It’s nuts!

Thomas:         [Laughs]

Andrew:         It’s nuts.  I dunno, maybe somebody can do it but I’m an old man, so…

Thomas:         It’s hard because we go with our friends who are the Disney nuts-

Andrew:         Mm-hmm.

Thomas:         -who are people without kids, which is great, I love it.  It’s absolutely great.  But, you know, they don’t have kids.

Andrew:         Right, yeah.

Thomas:         So they’re like “we’ll do 48 straight hours, we’ll sleep in the park,” and it’s like oh, man, this is a lot harder for us.

Andrew:         [Laughs]

Thomas:         But that’s okay.  It was a ton of fun, it was magical, I loved it and now I’m ready for episode 500 of our show!  I can’t even believe it.  I didn’t get you anything.  Actually, I did get you this cake and the candles are going.  If you’d like me to eat it for you, here, Andrew say-

Andrew:         Yeah, by saying absolutely nothing!  Yeah, right.

Thomas:         [Laughs]

Andrew:         Well, I got you a present, Thomas.

Thomas:         Oooh, what is it?

Andrew:         That present is our long-awaited eminent domain episode!

Thomas:         No way!

Andrew:         Yeah.

Thomas:         You didn’t.

Andrew:         I did, I did.

Thomas:         I don’t believe it, what a landmark moment for our show.  We’ll no longer have that joke.  You know what?  Even if we do eminent domain, we should still have that be the joke that we never got to it.

Andrew:         No, obviously.

Thomas:         I solved it.  [Laughs]

Andrew:         [Laughs]

Thomas:         Alright, well, I’m so excited.  We’re really doing eminent domain.  I can’t believe 500 episodes in, finally, let’s do it everybody!  Episode 500, eminent domain, here we go!

Eminent Domain

[3:53.5] [Segment Intro – Never Gonna Give You Up by Rick Astley]

Thomas:         Okay, I had to do that.  My hands were tied.  That had to be done, everybody.  But no, it’s not really just a Rick-roll.

Andrew:         [Laughs]

Thomas:         We’re actually also doing it.  It’s the best of both worlds.  You get Rick-rolled, which is great.

Andrew:         Which is delightful.

Thomas:         Yeah, there’s no downside to that, and we’re still gonna do eminent domain.

Andrew:         [Laughs] This is not the My Cousin Vinny of-

Thomas:         Wait, should we Rick-roll ‘em one more time?

Andrew:         [Laughs]

Thomas:         [Laughing] No, that’s okay, we’ll just do one.

Andrew:         This whole episode will be nothing but Rick Astley.  I could go with that!  Alright-

Thomas:         [Sighs]

Andrew:         Here’s the promise that I’m gonna make to you, and I hope to bring you along.  That is that perhaps the most maligned Supreme Court decision of the 21st Century, Kelo v. City of New London, is not only correct but something that we should mourn once this activist Supreme Court overturns it-

Thomas:         Ooh!

Andrew:         -which it almost certainly will in the next year or two.  I realize that’s kind of a heavy burden.

Thomas:         Yeah.

Andrew:         And I want-

Thomas:         Bummer.

Andrew:         I want to get to that, because Kelo v. City of New London, expanding the powers of eminent domain, is one of those rare Supreme Court decisions that has pretty much received criticism from both sides of the political spectrum, although the second you scratch beneath the surface you realize that almost all of the energy, particularly in legal journals, comes from the libertarian right.

Thomas:         So-

Andrew:         They have coopted some social consciousness on the left, but there aren’t deep, well thought, left critiques of the Kelo decision.

Thomas:         Hmm.

Andrew:         Go ahead, sorry, didn’t meant to interrupt.

Thomas:         Well, can I – I’ll step on the rake that I always do to try to set up the show, I can’t remember if I mentioned this but I live close-ish to a river.

Andrew:         Mm-hmm.

Thomas:         Like maybe, I dunno, half mile away.  And so right on our commute to take the kids to school, for Lydia to go to work, all that kind of thing, we go by the river.  We drive over to the river, go by it, and recently they eminent domained a bunch of houses, nice houses that were on the side of the river – not the riverside because that’s the rich people, they didn’t get eminent domained, but just on the other side.  [Laughs] There were houses one day, and then they’re like we need to build the levy more, and then you don’t have houses anymore.  They just freaking demolished them.  The whole time I was like “this can’t really be happening, right?  They don’t just take people’s houses away.”  But nope!  Gone.  Just a bunch of houses; one day they’re there, next day they’re gone, it was crazy.  So, the snake that says “don’t tread on me,” says should we allow this, Andrew?  Is this an outrage?

Andrew:         The answer to that is the 5th Amendment to the Constitution.  Here’s the relevant provisions that have justified the limits on eminent domain since the founding of the country.  That is, the 5th Amendment says “No person shall be deprived of life, liberty, or property without due process of law.”  They can’t take your property.  Then it says “Nor shall private property be taken for public use without just compensation.”

Thomas:         Hmm.

Andrew:         Think of that second clause as modifying the first.  Basically, it is a compelled sale. 

Thomas:         Right.

Andrew:         In other words, if there is a public use like expanding a levy, they can indeed take your property even if you’d rather not sale, but they have to pay you fair market value for it; they have to pay you just compensation.  Now, does that still represent a deprivation of liberty?  I certainly would argue that it does.  The question is where does that rank in a society in terms compared to other deprivations of your general liberty that you might think about. 

To figure that out there are really two kinds of questions when the government does stuff.  The first is, is it a taking of your property at all?  This is a crucial threshold question, because if it’s not a taking then that second clause isn’t implicated and you get nothing.

Thomas:         Nothing!

Andrew:         Yeah, I’m gonna tell you a story about that.

Thomas:         You lose!

Andrew:         Exactly.

Thomas:         Wow.

Andrew:         If it is a taking, then the question is, is it a justified taking under the public use provision?  And then how are you compensated for that taking?

Thomas:         Mm-hmm.

Andrew:         Generally in those sorts of cases the remedy, if the underlying state actor does not agree that their action constitutes a taking, the remedy is injunctive relief.  You stop the government from doing that thing until you can have some kind of hearing as to what constitutes just compensation, the fair market value.

Thomas:         Is the government assholes about this?  You know how we’re like everybody fights everything in court.  I wonder, do they demolish your house and they’re like “We didn’t take- [Laughs]

Andrew:         [Laughs]

Thomas:         Try to save money?  I dunno.

Andrew:         It’s a great question and I think that nicely sets up the first area of what constitutes a taking.  Demolishing your house, condemning it, bulldozing it, those sorts of things fall under the category of what we might call physical intrusions.  Until 1922, physical intrusion was the only thing that-

Thomas:         Oh.

Andrew:         -we thought constituted a taking of your property.  Let me give you an example of just how rigorous the physical intrusion doctrine goes.  I would refer you to a case called Loretto v. Teleprompter Manhattan Cable TV Corporation

Thomas:         Hmm.

Andrew:         From 1982. 

Thomas:         Oh, governor’s like “we need your teleprompters!”  [Laughs]

Andrew:         [Laughs] Well, the cable company was called Teleprompter Cable, it was really weird.

Thomas:         Ah.

Andrew:         Anyway, what happened is New York passed a law.  They passed a law in 1973 that says a landlord may not interfere with the installation of cable television facilities upon his property or premises and may not demand payment from any tenant for permitting cable or demand payment from any cable TV company in excess of what the State commission determines to be a reasonable amount of compensation, and that was a dollar. 

Let’s think about this for a minute.  The reason this case came about was because tenants, people renting property in New York City, which by the way is the only way 99.9% of New York City-

Thomas:         Yeah.

Andrew:         -you get to live in New York City, in the 70s.

Thomas:         The Kushners have everything.  [Sighs]

Andrew:         [Laughs] Right.  They were like we would like to have cable on our premises.  Why would they want to have cable on their premises?  Because back then you had three channels if you didn’t have cable, so they would hire the cable company to come out and run the cable line. 

Thomas:         Mm-hmm.

Andrew:         That was a physical intrusion in two ways.  Number one, they ran a cable across the roof of these apartment buildings and brownstones that were rented out; and number two they installed two separate little cable boxes on the wall of the building.  Those cable boxes were 4 inches by 4 inches by 4 inches.  Pretty minor.

Thomas:         I think I see where this is going.

Andrew:         Yeah.  A bunch of landlords were like “well I didn’t give you tenant permission to let the cable company onto my property, you’ve gotta run that through me.”  Landlords being jerks, which, you know-

Thomas:         Yeah.

Andrew:         -not all landlords are jerks, but certainly some are.  [Laughs] So, they were trying – you know, there was a war back and forth between tenants and landlords as to can the landlord increase your rent or otherwise extort you into paying more money to install the cable?  This was enough of a problem that the State legislature in New York enacted Executive Law § 828, which I read you previously.  Said no, you can’t stop the cable – this is not a big deal, let your tenants have cable.  It didn’t require them to pay for their tenants’ cable or anything.

Thomas:         Yeah.

Andrew:         Well, the New York landlords sued, went all the way up to the Supreme Court and the Supreme Court said no, this is definitely 100% a taking of your property, because you previously had whatever the cubic footage is of your property, and now you have-

Thomas:         Oh yeah.

Andrew:         -and they computed it.  It was 1.12 cubic feet.

Thomas:         Ah.

Andrew:         But you have 1.12 less cubic feet of your property now that they’ve installed the two boxes.

Thomas:         So, if a large crow flies onto your property-

Andrew:         [Laughs]

Thomas:         You’ve now lost like 1.2 cubic feet?

Andrew:         If the government were to install-

Thomas:         A government crow.

Andrew:         -a crow on your property, under this decision, yes.

Thomas:         Well, hold on, hold on.  I’m sure I missed something.  How is this the government?  I thought this was people just trying to install cable?

Andrew:         This was the government saying that you, as the landlord-

Thomas:         Okay, sorry.

Andrew:         -cannot prevent them-

Thomas:         Gotcha.

Andrew:         -the tenant from installing the cable.  Yeah, it is absol- I love that you asked that question that way because most of these eminent domain questions involve legislation that is trying to protect one party’s property interest at the expense of another.

Thomas:         Mm-hmm.

Andrew:         Which is something the libertarians never, ever tell you; particularly when they’re criticizing Kelo v. City of New London, which I promise we will get to by the end of the story.

Thomas:         [Laughs]

Andrew:         It’s like Grover is the monster at the end of the book, that’s where we’re headed.  Okay.

Thomas:         [Laughs]

Andrew:         Now, that’s how broadly physical takings are construed in the law.  The second question is could you imagine an action by the State that amounts to taking your private property for public use that doesn’t involve physically coming on and sticking a box on your property?  I think the answer to that is pretty obviously yes.

Thomas:         Yeah.

Andrew:         You can see how regulations might-

Thomas:         Hmm. Well-

Andrew:         Increase or decrease – Yeah, go ahead.

Thomas:         I don’t know if this is where you’re going, but with my government crow thing I just realized what about endangered species stuff?  Is that like okay, we’ve decided that this thing that might live on say your property or something is now protected.  Is that sort of a takings?

Andrew:         That is an awesome question and I think if you let me go through the regulatory-

Thomas:         Oh, okay, sorry.  Go ahead.

Andrew:         No no no no!  Here’s the short answer to that.  If the government seizes your property and says “this is a previously undiagnosed federally protected wetland,” yes.  They can seize your property, condemn it, tear down the building.  But again, you get compensated for that.  You get paid for the fair market value of your house, and then they can maintain that as a federally protected wetland.  If they want not to pay you, then they could regulate the use of your property and that will fall under this second category in which we ask is something a regulatory taking? 

It is really easy to imagine your regulations of, you know, you might say oh, there’s a marsh behind your house that is a federally protected wetland so we’re not gonna let you put in an inground swimming pool.  That activity, the earth moving, would disturb the marsh so even if you have a huge backyard-

Thomas:         Oh, yeah.

Andrew:         -you can’t.  We’re gonna deny you the permit, you can’t build a swimming pool.

Thomas:         You’ve taken my hypothetical pool!

Andrew:         You’ve taken the hypothetical pool, that’s exactly right.

Thomas:         It was gonna be a mega babe-lair, so I’d better get paid for that, you know?  I’m just trying to come up with ways to get more money from the government.  [Laughs]

Andrew:         Well, you might say I bought this house planning to put a pool in the backyard and then you’ve taken that away.  Or, let me give you-

Thomas:         I was gonna dig a 400-foot pool.  Deep.  [Laughs]

Andrew:         Let me give you-

Thomas:         Can you juice the numbers a little bit?

Andrew:         Real world example.  I used to live just outside of Olney, Maryland, which I’ve said before.  Yes, the Fallout games have fantastic nostalgia for me.

Thomas:         [Laughs]

Andrew:         It used to be to get to my neighborhood from I-95, the largest interstate on the east coast, you had to take highway, and you kept taking the highway until it narrowed down to this one lane road, and then you had to follow the one lane road for another like seven miles.  Then it intersected the largest street, Layhill Road, and at that intersection was this delightful little old-timey house called The Red Door Store.  Indeed, it had a big, bright red door.  It was like a turn of the 20th Century general store; in fact had been in continuous operation for more than a century, and they sold, you know, beer and wine and some rudimentary groceries.  You get the sense.  I would sometimes stop there on the way home from work to, you know, pick up a six pack, whatever. 

About a year after I bought the house – in fact, one of the reasons I bought the house – the State of Maryland finished what was called the Intercounty Connecter, Route 200.  Now there was an offramp right in my neighborhood, I could get right off of 95, take 200, get off on Layhill Road, without ever having to drive down that seven mile-

Thomas:         Hmm.  So, this is like a bypass creates a ghost town situation?

Andrew:         Yeah, that’s exactly what happened.

Thomas:         Oh.

Andrew:         So, a couple months later I was driving that way-

Thomas:         Poor Red Door!  You walk over, it’s just a red door in the dirt.  You’re like where did it go?  It’s gone.

Andrew:         Yeah.  They completely shut down, was out of business.

Thomas:         Wow.

Andrew:         And it makes total sense.

Thomas:         Yeah.

Andrew:         If you’re not – it was kinda a throwback anyway and if people aren’t being diverted onto the – so, that regulation, building a new road, diverted a ton of traffic, all of the commercially viable traffic, away from The Red Door Store, reduced the economic value of running that building down to zero.  Is that a taking?  What do you think? 

Thomas:         It feels like a takings, but I also feel like we’ve talked about this and I’m worried there’s a bad end to the story which is like because it’s not a direct thing, because the government didn’t literally take anything, your business is still there.  Technically people could still drive out to you.  I’m worried that maybe the government’s gonna be like sorry, that’s not technically a taking, this is just bad luck.  Sorry, bucko, go build a Red Door somewhere else.

Andrew:         Put a pin in that.

Thomas:         Okay.

Andrew:         Because I want us to time travel back to 1922.  This is a decision from one of our most famous Supreme Court Justices, also I dunno, perhaps the most overrated Supreme Court Justice in history.

Thomas:         Mmmm.

Andrew:         Oliver Wendell Holmes.

Thomas:         Oliver Wendell, okay.

Andrew:         Whom we have previously criticized for Schenck v. U.S., saying that that was the good old “fire in a crowded theater-”

Thomas:         Oh.

Andrew:         -means you can’t distribute socialist literature during World War I, although in fairness I would point out Holmes became more of a free speech advocate in his later years.  But nevertheless, he wrote the most misused, misquoted, terrible opinion on free speech ever, Schenck v. U.S., and he wrote Buck v. Bell, which upheld the mandatory sterilization under-

Thomas:         Ooh.

Andrew:         -an explicitly eugenics reason, featuring the line “three generations of imbeciles is enough.”  That Oliver Wendell Holmes.  Anyway, now that I’ve poisoned the well-

Thomas:         Uh-huh.

Andrew:         -let’s talk about the case-

Thomas:         You’re gonna have to pay me for that, I don’t have a well anymore.

Andrew:         [Laughs] That’s right!

Thomas:         [Laughs]

Andrew:         Let’s talk about Pennsylvania Coal Company v. Mahon.  This is Simpsons level supervillainy-

Thomas:         [Laughs]

Andrew:         -of the sort that you would expect from the turn of the 19th, beginning of the 20th century. 

Thomas:         This is Monty Burns stuff.

Andrew:         Yes.

Thomas:         Okay.

Andrew:         Here’s what happened.  The coal company owned – Pennsylvania Coal Company – owned a bunch of land and then they conveyed the surface land to a bunch of people to build houses.  Then the deed conveys the surface, but reserves the right to remove all the coal out from underneath.

Thomas:         Oh.

Andrew:         And says, you know, you’re taking the premises with the risk that you waive all claim for damages against anything that might come from mining out the coal.  I don’t know if you remember the Simpsons episode with the like slant mining, slant drilling of the oil that causes the school to fall?

Thomas:         Oh, yeah!

Andrew:         That’s exactly what was at risk here.  1878 you couldn’t slant mine like that, so a bunch of people bought all these houses.  By 1920 you could, and the coal company was about to extract all this coal that would very likely cause houses to collapse into the earth.

Thomas:         Oh wow.  See, my mind went to the There Will Be Blood, where it’s like I take my straw, I drink your milkshake and drink all the delicious coal underneath your houses.

Andrew:         [Laughs] Right.  Think about it, you know, you’re on a separate piece of property and coming in at the slant, but yeah.

Thomas:         Similar.  Yeah.

Andrew:         The State of Pennsylvania passed a law, Public Law 1198, which forbids the mining of anthracite coal in such a way as to cause the subsidence of any structure used as a human habitation.  Makes total sense, right?  The Pennsylvania Coal Company sued to enjoin that statute from going into effect, and for the very first time the Supreme Court said you know what?  That’s right.  We cannot imagine a world in which some poor coal company is not allowed to extract as much coal-

Thomas:         [Laughs]

Andrew:         -from the earth as possible, so for the first time ever they said (quote) “The general rule is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.”

Thomas:         Hmm.

Andrew:         In other words, we don’t know exactly what too far means.  [Laughs]

Thomas:         Yeah.

Andrew:         But saying you can’t mine your coal out from under this property that you’ve leased to people whose houses are going to collapse into the earth is – that’s a bridge too far.

Thomas:         Well, okay, Monty Burns’ advocate here.

Andrew:         Okay, good good good.

Thomas:         I definitely see the principle of if a regulation – I don’t know how you define too far – but if a regulation does, let’s say you and I enter into a deal and I’m like alright, I’m gonna buy the coal rights or something not as poison the well-ey.

Andrew:         [Laughs]

Thomas:         I’m gonna buy the dirt rights, I dunno, something sustainable.  Solar panel rights, there you go, I’m gonna try to revamp this example.

Andrew:         Love it.

Thomas:         Maybe get more sympathy.  Andrew, I’m gonna buy some of this land here for solar panel rights because I love the environment, I want to help the environment, gonna build a solar farm.  Then the government for some reason, maybe it’s Republicans or something, they’re like we hate solar panels, we are now regulating solar, no solar panels allowed here.  We’re just taking that away arbitrarily because we hate Thomas and his environment plan.  It feels like I could be like well, you really did just take away the thing.  Let’s say that’s the only right I had to the land, now entirely we made a deal and it’s gone.  I had an economic value in this thing to now I have zero.  It does feel like the government’s maybe taking something away from you there.

Andrew:         I love that that’s the position that you’ve got, because that’s the position that I want you to get to.

Thomas:         Oh, cool.

Andrew:         In other words-

Thomas:         I’ve changed my mind!  I actually think it’s fine! 

Andrew:         [Laughs]

Thomas:         No, I’m just kidding!  [Laughs]

Andrew:         Not only, as Justice William Brennan put it, and again as I’ve mentioned probably my jurisprudential hero, from the position of the landowner the regulations that totally deprive you of all use of your property are indistinguishable from taking the property.

Thomas:         Yeah!  Yeah.

Andrew:         What the Supreme Court has done since that 1922 Pennsylvania Coal decision is proceed on kind of a case-by-case basis, and the best understanding of the law that we can summarize is that the 5th Amendment is violated when a particular regulation denies an owner all economically viable use of his land.

Thomas:         Oh.  But all is pretty-

Andrew:         Yeah.

Thomas:         That’s doing a lot of work there.

Andrew:         It’s doing a lot of work.

Thomas:         Thomas, you could still grow some grass and sell blades of grass from your land for 99 cents for the entire value.

Andrew:         That’s right.  Subsequent decisions have either omitted the word “all” or have changed that to “all or substantially all.”

Thomas:         Mm-hmm.

Andrew:         The test would then be “denies you the economically viable use of your land,” because that’s right, you could set up a series of lemonade stands.  People made exactly the same arguments.

Thomas:         [Laughs] Lemonade stands, yeah.  You could sell kinda pretty rocks that you find on the land to kids for 25 cents.  Economic value.

Andrew:         Yeah.  And, you know, when you say look – again, I litigated one of these cases, it was an abandoned golf course-

Thomas:         Ooh.

Andrew:         -that my client purchased within – it was currently zoned a certain zoning designation when my client purchased it, and my client had a plan to develop like 80 single-family homes within this fallow golf course, and then after my client purchased the land the city counsel met and re-zoned that golf course such that it would go from 80 houses to four. 

Thomas:         Jeez.

Andrew:         That was the issue we litigated on and won that said okay, yeah, we could build four houses here, but you know what?  They didn’t spend $100 million dollars so they could build four houses.

Thomas:         Yeah.

Andrew:         They spent the amount of money that they did consonant with the original development plan, and that was not an economically viable use of the land to pay ten times what you could ultimately get for it.  But I want to kind of come to the conclusion that you articulated as a common-sense point, which is notwithstanding its August beginnings in protecting the poor coal company, that yes, regulations can be the equivalent of a depravation of use, and that in my view, from a progressive standpoint, the questions I care most about are regulatory takings that deprive you of 90% of the use of your property.

Thomas:         Mm-hmm.

Andrew:         Or, you know, diminish the value by 90% but still are economically viable, because remember, those are the cases in which you get nothing.  This has been consistently reaffirmed by the Supreme Court.  The most recent case on regulatory takings is a case called Murr v. Wisconsin in 2017 in which – and again, I want you to remember the cable box case.  Sticking two cable boxes was absolutely physical intrusion onto your property, physical taking, not a regulatory taking, and you have to recompense the owner. 

In this case you had parents who were giving lots to their kids.  Each lot, Lot E and Lot F, were both over an acre, but due to regulations they had under an acre of developable land on each of the properties.  The idea was they first transferred Lot E then they transferred Lot F and plaintiffs had a deal to sell part of Lot E and then get Lot F over an acre and develop Lot F, but Wisconsin passed a law [Laughs] that said if you transfer any of these properties and they’re under an acre of developable land then you can no longer subdivide the property at all.

Thomas:         What the – is there a lot of like small government, lower-level government lawmaking that is just like “I hate this guy, I’m gonna eff him over.”

Andrew:         [Laughs] It’s just like “I hate this guy?”

Thomas:         Yeah!

Andrew:         Look, there is a reason to want to not allow property owners to infinitely subdivide their properties, but this does look kind of retaliatory here.

Thomas:         Yeah.

Andrew:         This went all the way up to the Supreme Court and basically the landowners were like look, this law merges Lot E and Lot F into one parcel, and yes, we can still do the development on Lot F that we were gonna do, but we can’t sell the Lot E portion, so it has, by regulation, reduced the value of Lot E to zero.

Thomas:         Yeah.

Andrew:         Because without the law we could sell this other part.  You know, the reason it’s split into two lots is an arbitrary nature of how they were conveyed to us, but we own both right now, let us carve out – we’ll keep this over an acre, we’ll develop some houses.  I think it was just one house, this is not a mega-developer – and let us sell Lot E to finance that.  The Supreme Court was like “nope, we’re gonna look at the overall economic effect of both lots.”  Since it doesn’t deprive you of all economic value of the combined lots-

Thomas:         Jeez.

Andrew:         -just a regulation, you’re SOL.

Thomas:         So, I thought you said earlier that they changed it from all, but now it does sound like it’s all?  Because you just said 90% – earlier you said oh, I’m concerned about the ones that take 90% of the value.  What is the threshold we’re looking at?

Andrew:         There is no defined threshold.  Here’s what the Supreme Court has said: “We have generally eschewed any set formula for determining how far is too far, preferring to engage in essentially ad hoc factual inquiries.”  What counts as economic value?  We don’t know.  It is case by case.

Thomas:         Huh.

Andrew:         If you’re asking yourself, “should I care about that?”  You should 100% care about that for all of the reasons that we’ve talked about.  Here’s what you should not care about [Laughs] or not be agitated about.

Thomas:         Uh-huh. 

Andrew:         Kelo v. City of New London.  This is a physical intrusion, direct takings case.  It involves condemnation.  This is like bulldozing the houses to expand out the reservoir.  I want to start off, because you asked that question, and I want to quote from the plaintiff.  By the way, the reason for this is because the plaintiff is a member of the modern media-savvy set of plaintiffs.  She is super sympathetic, she’s really, really good at going on TV and here’s what she says.  She says, “what galls me is that the developer is taking my land so someone else can live here.  I don’t understand why I’m not as good as someone else.”

Thomas:         Hmm.

Andrew:         “There was an article that recently appeared in the newspaper that said they were gonna put up 80 housing units on E Street.  I live on E Street.  That’s what they want to do, they want to put up new houses.  I’m not good enough to live here, yet someone else is good enough to live here.”  That A, has some real legal force; and B I think has some real persuasive force.  That is the argument why this case is terrible.  Now let’s explain out what the case is.  The case is urban renewal.

Here’s what happened.  In 1998, Pfizer – so you want a villain?  We all hate Pfizer.  Well, not at present thanks to the COVID vaccine.

Thomas:         I have some Pfizer in me, yeah. 

Andrew:         [Laughs] Me too.

Thomas:         I don’t hate that part of the Pfizer.

Andrew:         No, right, but horrible big evil drug company.  This is, again, why the stars are sort of aligning.  They bought $10 million dollars in land from the State of Connecticut along the Thames River.  That bordered on an area called Fort Trumbull in the city of New London, Connecticut.  They bought the land and Pfizer built a $270 million dollar facility that brought 1,400 jobs into New London.  In exchange for that, they got $118 million in subsidies and tax breaks over the next decade.  I just want to jump in and say this is a huge problem-

Thomas:         Yeah.

Andrew:         -that restricting eminent domain doesn’t solve.  The problem is the communities are pitted against each other in a race to the bottom.

Thomas:         I hate it, yeah.

Andrew:         It’s awful.  This case does not solve that in any way whatsoever.  Again, it hijacks – the libertarian argument in this case hijacks your emotions on that kind of predatory behavior that companies use to extort benefits out of communities in order to muster opposition. 

The plant was scheduled to be finished by 2001, and as Pfizer is moving in, they immediately set at work trying to influence the neighborhood, working with the city and then working with the Republican Governor of Connecticut to engage in urban renewal redevelopment of the surrounding Fort Trumbull area.  Again, this is a classic urban development situation.  Fort Trumbull used to be a naval research facility, it closed in the 1990s with the end of the Cold War, and so it had a lot of empty stuff there, and it was an area that they hoped to revitalize.  In fact, it was an initiative pushed, like I said, by the Republican Governor.

One of the things that the Republican Governor wanted to do was disaggregate the Mayor of New London, who was a Democratic rival.

Thomas:         Hmm.

Andrew:         Again, I don’t know that it would have turned out differently if he hadn’t, but it’s an important kind of fact in the background.  What the Governor did was reinstated an entity called the New London Development Corporation, which was a state corporation, nonprofit, that was established to then aid the city with development planning.  The NLDC produced a development plan to revitalize Fort Trumbull by building housing, office space, and commercial facilities – restaurants, all that sort of stuff, that would then also provide office space for the Pfizer headquarters.

That development plan was obviously – we need to talk about the way in which these urban renewal projects get done.  Yes, was done in close consultation with Pfizer.

Thomas:         Yeah.

Andrew:         And certainly would have benefited them.  At trial the language that was used to describe Pfizer’s ties to the New London Development Corporation was it was the (quote) “10,000 lb. gorilla behind the project.”  Undoubtedly that was the case.  The NLDC then sought to buy up all the land.  That’s the first step in these is voluntarily acquiring the land.

Thomas:         Oh, that’s interesting.  We didn’t even touch on that, is that a requirement?  You have to be just oh, hi, I’m just a normal buyer, not gonna demolish your house at all, just looking to buy.  Do you have to do that first?

Andrew:         Most projects will have built in the acquisition costs of the property because as a practical basis – again, this is why I come down on the side that I do – as a practical basis it’s cheaper to buy property even above what Zillow would say-

Thomas:         Uh-huh.

Andrew:         It’s cheaper to voluntarily buy the property than to have to go through the eminent domain route, because you have to bring – you have to roll in your legal costs in addition to everything else, whereas you know, you’re like “alright, look, I can get a 100% guarantee that you’re gonna move out of the property on X schedule if I just buy it from you.”  Most developers go through the voluntary process first, and that’s what happened here.  90 different landowners, all but 7 of them sold voluntarily.

Thomas:         Oh.

Andrew:         If you want to ask, think about the Better Call Saul episode-

Thomas:         Yeah, that’s just what I was thinking about, yeah, she’s gotta convince the old guy to give up his land.

Andrew:         Yeah, right.  Do developers sometimes engage in sleezy tactics or heavy handed-

Thomas:         Sure.

Andrew:         Of course they do.  Again, we want to have open eyes with this, but nevertheless 83 people sell, 7 say we’re not gonna sell.  In 2000 New London City Counsel authorizes the NLDC to use eminent domain to condemn the land of those who refused to sell.  Between those 7 property owners they owned 15 residential properties.  The face, like I said, was Susette Kelo who had a little pink house.

Thomas:         Yeah.

Andrew:         I’m gonna include the libertarian organization that represented her pro bono and used her as the face – and I don’t want to say “used” in a derogatory way.

Thomas:         Yeah, you find the most sympathetic face.

Andrew:         Right.  They characterized this as Susette – and this is directly from their website.

Thomas:         [Laughs]

Andrew:         (quote) “Susette Kelo dreamed of owning a home that looked out over the water.  She purchased and lovingly restored her little pink house where the Thames River meets the Long Island Sound in 1997 and enjoyed the great view from its windows.  Tragically, the City of New London turned that dream [dramatically] into a nightmare.

Thomas:         [Laughs]

Andrew:         Word for word on their site! 

Thomas:         Didn’t really turn … okay.  [Laughs]

Andrew:         Yeah.

Thomas:         If I have a dream to own a house and then it’s just like well, you don’t get to own that house, you haven’t turned my dream into a nightmare, you’ve just slightly altered my dream.  Turning a dream into a nightmare would be like now that house has teeth and it eats you.

Andrew:         [Laughs] Right!

Thomas:         And you’re not wearing any clothes and everybody’s watching.

Andrew:         [Laughs]

Thomas:         That would be like you turned a dream into a nightmare.

Andrew:         That would be.

Thomas:         Did that happen, Andrew?

Andrew:         [Laughing] No, that did not happen.

Thomas:         Not that we know of.  Okay.

[38:17.9] [Commercial]


Andrew:         I want to point out, they use this “looked out over the water.”

Thomas:         Yeah.

Andrew:         The house was, as far as I can tell, a quarter of a mile from the waterfront, and the best is the allegation in the Complaint that (quote) “on a clear day she can see Montauk Point from her dining room window at the tip of Long Island.  Again, you’re led to believe it’s this waterfront property.  It’s a property with a view of the water-

Thomas:         Look.  [Sighs]

Andrew:         Yeah, again.

Thomas:         All of this doesn’t matter at all, right?

Andrew:         Yeah.

Thomas:         The point is she wants her house.

Andrew:         She wants her house, right.

Thomas:         No matter what the ruling is here it shouldn’t hinge on “well, does she like really want her house?”

Andrew:         Right, right.

Thomas:         She a super big fan of the water nearby or not?

Andrew:         [Laughing] Exactly.

Thomas:         It should be like “person wants their house.”  The law should be like we’re cool with the government taking that or not.

Andrew:         Exactly right.  What made this such a desirable case on legal grounds is that the question here was very, very simply presented.  It was is economic redevelopment a public use?

Thomas:         [Laughs] Do you want to kill this poor old lady in her house?

Andrew:         The other side, this is just a big giveaway to Pfizer.

Thomas:         Yeah.

Andrew:         It’s a private interest, the government isn’t interested.  What really made that a great test case from the legal prospective is because usually this kind of urban renewal is in areas that are blighted neighborhoods.  You have an additional benefit to the public in that –

Thomas:         Hmm.

Andrew:         -removing blighted neighborhoods is clearly a public benefit where rats and that sort of thing.

Thomas:         Look, I know this, we don’t have time, it’ll be a topic for another show.

Andrew:         [Laughs]

Thomas:         But I feel like there’s gonna be a ton of – if we dig into this – a ton of racism involved in a whole bunch of different cases of this.

Andrew:         Absolutely.  I’m glad you said that.

Thomas:         I’m signaling that for later.

Andrew:         I wanted to bracket that.  Again, the declaration of urban blight is 100% steeped in racism, and again this case does not solve that.  The reason why this case was brought was so that libertarians didn’t have to argue against government’s determining rundown inner-cities to be urban blight, which they strongly favor.  What they didn’t want was government just being able to take property away from middle class white people.

Thomas:         Hmm.

Andrew:         That was the additional attraction here.  If you’re sitting there thinking, yeah, urban renewal forces poor people out of their homes, 100% it does.  This case was chosen specifically not to present that issue.  Let’s be clear what libertarians want.  They want to restrict government power by any means necessary, and they especially want to reduce the power in urban areas because most Mayors are Democrats and most urban residents aren’t libertarians, to put it mildly.

They wanted a determination from the Supreme Court that economic redevelopment is not a public use, and therefore that’s a kind of thing that the government now can’t do.  Whenever there’s a thing the government can’t do, libertarians win. 

Thomas:         Sure.

Andrew:         Armed with their libertarian lawyers, Susette Kelo went to trial.  The trial court evaluated the seven different parcels of land, and they upheld the takings on six and a half of them.

Thomas:         Six and a half?!  Wow.  Okay.

Andrew:         [Laughs] Yeah.  The trial court said yeah, economic development is a public use, and the issue was Parcel 4A-

Thomas:         Hold on, were they like “you have to build a fence around this poor lady’s pink house and it has to stay there.”

Andrew:         [Laughs] No.  The issue was that Parcel 4 was going to have two different uses.  The part labeled Parcel 4B was going to become a park and a marina.  The 4A portion was set aside for (quote) “park support.”  You will see the libertarian side sort of mocks all of this, but basically as they said at trial, yeah, this is gonna be the parking, expanding the roadways.

Thomas:         Mm-hmm.

Andrew:         The kind of stuff you do to get people off the roads and into the marina.  Why have we not specified exactly what this is yet?  Because the schematics of the marina and the park are likely to change.  Again, that is very typical in development, and so we wanna know what the final marina looks like before we tell you what the parking lot is gonna look like.

Thomas:         Makes sense.

Andrew:         Makes a lot of sense.  But nevertheless the trial court said you know what?  We’re not sure that this is enough detail on 4A, so we’re gonna uphold eminent domain for economic development, we’re gonna uphold eminent domain on Parcels 1, 2, 3, 5, 6, 7, and 4B, but we’re gonna deny it on 4A.

Thomas:         Huh.

Andrew:         Then both parties appealed up to the Connecticut Supreme Court.  The Connecticut Supreme Court affirmed the takings and reversed on 4A.  It said yes, you can take all seven parcels of land, all 15 properties, so long as you compensate the owners.  Why did the Connecticut Supreme Court reach this decision?  I think because of a 9-nothing 1984 Supreme Court case called Hawaii Housing Authority v. Midkiff.  By the way, this is a case that is unquestionably correct, and it’s about land distribution in Hawaii.  I think anybody from the left who is critical of the Kelo v. New London decision, it’s my hope this case persuades you the other way.

That case had to do with the historical distribution of land in Hawaii.  I’m gonna quote from the factual findings, here.  “In the mid-1960’s, the Hawaii Legislature discovered that State and Federal Governments owned 49% of the land in Hawaii-”

Thomas:         Wow.

Andrew:         That’s a lot of military bases.  “Another 47% was in the hands” (across multiple islands) “was in the hands of only 72 private landowners.”

Thomas:         Yikes.

Andrew:         “18 landholders, with tracts of 21,000 acres or more, owned more than 40% of the land” on the big island, and “on Oahu, the most urbanized of the islands, 22 landowners owned 72.5%-”

Thomas:         Jeez.

Andrew:         -of all of the land.  What do you think the property owners did?  They were like well, we’re never selling.

Thomas:         Yeah.

Andrew:         We’re just going to rent, and by the way we can charge whatever the hell we want-

Thomas:         Yeah, what are the citizens gonna do?  Walk out and build a house on the ocean?

Andrew:         Right.  Exactly.

Thomas:         Live underwater, I guess?

Andrew:         Yeah!

Thomas:         Yeah, that’s – I hope, as you say, this sounds like a no-nonsense correct decision. 

Andrew:         Yeah.  The legislature said concentrated land ownership skewed the residential rent market, inflated the prices for land when property occasionally did sell, and injured the public tranquility and welfare, so they passed a law.  By the way, they worked with this oligopolistic huge business interests at first.

Thomas:         Right.

Andrew:         First the legislature said we just want you to – we’re gonna pass a law that requires you to break up and sell the lands that you’re currently renting to homeowners.  Again, I’m gonna quote from the Supreme Court, “However, the landowners strongly resisted this scheme, pointing out the significant federal tax liabilities they would incur.”  When you make a profit on selling a house that isn’t your primary residence and you don’t then buy another residence, that gets taxed as ordinary business income, so, yeah, they would be paying 40% taxes on the sales of all these homes.  The legislature said okay, well, we wouldn’t want you uber millionaires in Hawaii-

Thomas:         Yeah.  Boo-hoo.

Andrew:         To have to pay taxes.

Thomas:         Yeah.

Andrew:         So, instead, we’re gonna come up with a compromise solution that is much more economically beneficial to you.  That is, we’re going to condemn your lands; we’re going to acquire them via eminent domain; we’re going to pay you fair market value for your property, but because it’s eminent domain and you haven’t sold it that doesn’t trigger the income tax requirement.

Thomas:         Hm, okay.

Andrew:         It makes the tax consequences way less severe while (quote) “still facilitating the redistribution of fees simple,” that is the ownership of the land entirely.  That was the bill, it said we’re gonna use eminent domain, we’re gonna seize a whole bunch of residential property then we’re gonna sell it off to individuals in order to diversify, so we don’t have 72 people owning all but 4%-

Thomas:         Yeah, no kidding.

Andrew:         -of the real estate in Hawaii.

Thomas:         Is that what that movie, The Descendants, I think it’s called, is about?

Andrew:         I dunno.

Thomas:         Oh, okay.  I think it’s – yeah, anyway.  It’s about landowners in Hawaii who don’t wanna sell their property, so I think it’s that.

Andrew:         Could be.

Thomas:         It’s been like ten years since I’ve seen it.

Andrew:         So, in what I’m sure will shock you to your core, the oligopolists opposed that law as well.  They went all the way to the Supreme Court to say-

Thomas:         All I picture is them just marching to the Supreme Court, doing the crying with the money in their hands?  Like, “ooh, I’ve got money!”  Was that their argument?

Andrew:         That was-

Thomas:         [Laughs]

Andrew:         Their argument was it’s not a valid public purpose because you want other people to own property.  You can’t take house from Person A and then sell it to Person B and say that’s a public purpose.  The Supreme Court, 9 to zero, with plenty – 1984, plenty of conservative justices on the Supreme Court said of course it is.

Thomas:         Ah, thank God.

Andrew:         They relied on a 1954 case called Berman v. Parker about redeveloping slums, and again, put the asterisk with all that.

Thomas:         Mm-hmm.

Andrew:         But the holding of those cases is the public use requirement for it to constitute a takings is – and I’m gonna read the legalese and then explain it – “thus coterminous with the scope of a sovereign’s police powers.”  What does that mean?  That means if the State legitimately thinks that it is benefiting its people, that becomes a public use.  Police powers are the powers that enabled governors and mayors to impose masking and social distancing requirements, and is the general idea that hey, a governor, a mayor, is accountable to the people within her jurisdiction and therefore she can pass laws that are designed for no purpose higher than the public good.  Unlike U.S. Congress, which can’t just say we think it would be good for people if X happened; you have to have a specific reason.  You have to have, you know, interstate commerce or the like.  The State has police powers and they are the broadest possible exercise of the State’s powers. 

That was unambiguously the law from 1954 to the present, and that was what was challenged by the Kelo v. City of New London case.

Thomas:         Oh, okay.

Andrew:         And, by the way, I want to add the justification in the Hawaii case, because it’s about to be reversed, and it’s part of why-

Thomas:         Oh jeez.

Andrew:         –Kelo is a good thing.  What the Hawaii case said was in our previous decisions – explaining that public use is coterminous with the sovereign’s police powers – we emphasized the importance of deferring to legislative judgements about a public purpose.  Courts are ill equipped to evaluate the efficacy of proposed legislative initiatives, so we reject as unworkable the idea of courts deciding on what is and what is not a governmental function, and invalidating legislation on the basis of the court’s view on that question at the moment of decision, a practice that has proved impracticable in other fields.”

Again, the idea is when it comes to urban redevelopment your best method for being engaged is to be engaged in the community.  Again, remember, most of these are Democratic municipalities.  Are there issues with inequal access to resources?  100%.  It’s an endemic problem, I do not mean to suggest that community residents have an equal footing with large corporations, they do not.  But the Court said look, we’re better off not saying that we’re going to review all community decisions by some court down the chain.  We would rather have the community come to this decision than Samuel Alito, and I wholeheartedly endorse that.

So, how did Kelo get up to the Supreme Court if it was so clear?  The answer is the activist right wing at the time; Scalia, Thomas, Rehnquist, coopted one of two centrists on the court at the time, Sandra Day O’Connor, to vote to grant Cert.  They thought they could pick off Anthony Kennedy, the other centrist.  They were wrong, and that’s why it’s 5-4.  First off, Kelo v. City of New London was not a weird alignment, it was totally straightforward.  It was written by then-justice John Paul Stevens, probably the most liberal member of the court at the time.  It was joined by Souter, Ginsberg, Brier; the court’s left win.  Kennedy was the swing vote and he wrote a concurrence that is truly excellent.  The result in Kelo was to affirm the judgment of the Connecticut Supreme Court, to say yeah.  Redevelopment is a public purpose under the 5th Amendment, it’s a valid exercise of the local government’s powers.

Kennedy wrote a concurrence to say, eh, I want to reach out to at least Sandra Day O’Connor.  He says, “This Court has declared that a taking should be upheld as consistent with the Public Use Clause, so long as it is ‘rationally related to a conceivable public purpose.’  This [is a] deferential standard of review, [but it] echoes the rational-basis test used to review economic regulation under the Due Process and Equal Protection Clauses … [It] does not alter the fact that transfers intended to confer benefits on particular, favored private entities, with only incidental or pretextual public benefits, are still forbidden by the Public Use Clause.”

“A court applying rational-basis review … should strike down a taking that, by a clear showing, is intended to favor a private party, with only incidental or pretextual public benefits,” and “A court confronted with a plausible accusation of impermissible favoritism to private parties should treat that objection as a serious one, review the record to see if it has merit, though with the presumption that the government’s actions were reasonable and intended to serve a public purpose.”  I think that makes a lot of sense.

Thomas:         Makes sense to me.  Case closed.

Andrew:         I think you want to say yeah, if this is nothing but a giveaway to Pfizer, if it is just they bought and sold the legislature, yup!  You can go to court.  If it isn’t, if it’s the process of political horse trading then it might not be the best possible outcome, but it is certainly a better outcome than saying we are going to constrain the power of local governments to do what they can to serve their communities.  This was bitterly condemned by Rehnquist, Scalia, Thomas, and O’Connor. 

O’Connor wrote the dissent.  She makes essentially two arguments in her dissent and I don’t think either of these are very good.  The first is she says this effectively reads out the public use clause from the 5th Amendment.  I think the bit I just read you from Kennedy answers that.  It’s no more of a reading out than saying we apply the Equal Protection Clause under a rational basis.  It’s not much of a protection, I don’t want to oversell that, but it doesn’t have to be because the State power comes with its own remedy of compensation.  That was the first argument that kind of reads that into nothingness, and I would say it’s no more nothingness than the Rational Basis test, which is not nothing.

Then the second argument was sort of a liberal concern for how urban renewal works, which again, I sympathize with but I think this case wouldn’t have solved.  She writes, “The specter of condemnation hangs over all property.  Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, any farm with a factory.”  I kinda wanna combine that into the other argument, the last argument you will hear against Kelo v. City of New London today.

That is this redevelopment plan ultimately went nowhere.  It was proposed.  I’m gonna quote here from withering criticism in the National Review that winds up being its own goal.  “As for the City of New London, Justice Zarella,” (that was the dissent at the Connecticut Supreme Court) “and other skeptics turned out to be right.  The NLDC’s flawed development plan fell through, as did a number of later efforts, and today the land is empty and apparently overrun with feral cats.” 

Thomas:         [Laughs]

Andrew:         That’s true.

Thomas:         Wow.

Andrew:         But it’s an own goal, because the reason Pfizer pulled out of New London was because, after acquiring another company, Groton, Connecticut built the research facility that they were looking to have built on the New London facility and then Pfizer’s tax breaks expired in 2009 so they were like, oh, look, this other area was able to build the thing that we wanted to get out of the Fort Trumbull project.  By the way, if that had not been wrapped up in five years of litigation maybe New London could have built that facility in the time.

Thomas:         Yeah.

Andrew:         So, yes.  Do we still have the endemic problem of the race to the bottom?  100% we still have it, but opposing Kelo v. City of New London will not solve that problem.  All it will do is say it will impose the hard and fast rule that says localities can’t engage in urban renewal.  I think that is incredibly misguided.  So, that is our deep dive-

Thomas:         Wooow.

Andrew:         -on Kelo v. City of New London.  What do you think?

Thomas:         That was fantastic.  It was such an appropriate use of our 500th episode.  I – really, that was just such a signature Andrew Torrez deep dive.  I know we normally save those for the Tuesday show, but screw it, it’s 500. 

Andrew:         [Laughs]

Thomas:         It was fantastic.  I loved it, and yeah.  It sounds like the state of the law on this is okay?  Or is this another thing this horrible Court is gonna ruin in some weird way?

Andrew:         This is such an angry issue for libertarians and those really engaged in right wing jurisprudence that I imagine this Supreme Court will revisit and we will see all of these articles about how, you know, “Kelo v. City of New London is a decision viewed as controversial from both the left and the right,” and I want to highlight that the criticisms from the left are intentional hijackings of what are good faith motives, that this court is absolutely not going to solve by overturning.  I will also point out a bunch of States have passed laws restricting the eminent domain powers-

Thomas:         Hmm.

Andrew:         -of local Mayors; which again, think about this.  Governors tend to be Republicans; Mayors tend to be Democrats.  This is an area where they got public sympathies behind Governors taking away local powers-

Thomas:         Yeah.

Andrew:         -from Democrats.  The entire history around this, I feel about Kelo v. City of New London roughly the way I feel about the McDonald’s coffee case.

Thomas:         Yeah!

Andrew:         There you go.

Thomas:         Good callback on that.  So, something that’s kind of widely misunderstood and bashed for bad reasons, essentially.

Andrew:         Exactly right.

Thomas:         Well, I love this.  What a great way to celebrate 500, Andrew, that was so much fun!

[59:47.1] [Patron Shout Outs]

T3BE Question

[1:00:54.4] [Segment Intro]

Thomas:         And now it’s time for T3BE.  Special Disneyland edition.

Andrew:         [Laughs]

Thomas:         I think I have the maximum number of excuses that a person who could have for definitely getting this question wrong.

Andrew:         That’s right.

Thomas:         But, here we go.

Andrew:         Alright Thomas.  A man arranged to have custom-made wooden shutters installed on the windows of his home.  The contractor who installed the shutters did so by drilling screws and brackets into the exterior window frames and the shutters.  The man later agreed to sell the home to a buyer.  The sales agreement did not mention the shutters, the buyer did not inquire about them-

Thomas:         Hmm.

Andrew:         – and the buyer did not conduct a walkthrough inspection of the home before closing. 

Thomas:         Wow.

Andrew:         The man conveyed the home to the buyer by warranty deed. 

Thomas:         What an appropriate real property real question-

Andrew:         Yeah! [Laughs]

Thomas:         -for eminent domain, you bastard.

Andrew:         After the sale closed, the buyer noticed that the shutters and brackets had been removed from the home and that the window frames had been repaired and repainted. 

Thomas:         Hmm.

Andrew:         The buyer demanded that the man return the shutters and pay the cost of reinstallation-

Thomas:         Ohh.

Andrew:         – claiming that the shutters had been conveyed to him with the sale of the home.

Thomas:         Oh, wow!

Andrew:         When the man refused, the buyer sued.  Is the buyer likely to prevail? 

Thomas:         Oh, shoot!  I’ve never thought about this.  Okay!  I’m interest – this could be good practical information!

Andrew:         It really is, yeah!  (A) No, because the sales agreement did not mention the shutters. 

Thomas:         Hmm.

Andrew:         (B) No, because the window frames had been repaired and repainted after removal of the shutters. 

Thomas:         Okay.

Andrew:         (C) Yes, because the shutters had become fixtures. 

Thomas:         Oooh.

Andrew:         Or (D) Yes, because the man gave the buyer a warranty deed and the absence of the shutters violated a covenant of the deed.

Thomas:         Oh my gosh.  I love this question.  Doesn’t mean I have any chance of getting it right, but I love it because I never thought about this.  It’s like, what if I sell you my house?  It says they didn’t do a walkthrough, which I don’t know if that’ll matter, but let’s say you like the house, you see the house, you love the house, and I’m just like “cool!  Deal’s done!” and I just take out everything in the house.  I take out [Laughing] doors, windows, wiring.  [Laughs] Just basically strip it bare of everything I possibly can, and then you’re like “what the hell?  I thought I bought a house.”  I’m like yeah, you bought the house.  I’m just taking all these things that go on the house that I still own.  I’m doing an extreme, I take off the roofing, you know?  It’s interesting.

There must be – and this is again, entirely from just thinking it through because I have no – I’ve never thought about this but it’s so interesting.  There must be some sort of thing of like well, okay, there’s stuff that’s definitely part of the house that you can’t just take.  You can’t take a wall with you after you sell the house or something, maybe, but maybe there’s other stuff like, for example, furniture, you know.  Minor things like that, that must be like okay, yeah, that’s reasonable.  You can’t keep my TV because I sold you a house and my TV was in it, or something.  How do we balance that?  What’s the answer to the question gonna be?  No idea.  We’ll see if I know, we’ll see if the coin knows.

What sucks about this is, as much as the general thing is really interesting, this will come down to well, the minutia of the definition of a fixture is gonna be like dah duh-dah, you know?  Because it was brackets and screws or something.  That will be probably what it is, so I won’t know the answer, but we’ll go through it, it’s interesting.

Okay, A, no because the sales agreement did not mention the shutters.  I think that can’t be right.  You don’t have to mention every single window frame and every single panel and every single roof shingle, you know?  Otherwise it’s like I’m taking that shingle because the agreement didn’t mention it, I think.  But then again, the one time I bought a house there was a whole lot of paperwork that I didn’t read, so maybe they do have to [Laughing] go over everything with a fine toothcomb.  But I’m eliminating A, I don’t think that’s it.

B, no because the window frames had been repaired and repainted after removal of the shutters, which is very plausible.  B is a good plausible “no” answer.  Because that sounds to me like when I put up something in my house, I dunno, some random thing, and I’m like alright, movin’ away, I’m taking this with me, gonna repair it so it’s still a house, I haven’t ruined the house, but yeah, this particular thing I’m taking with me.  Seems like B could be the answer.

C, yes because the shutters had become fixtures.  Totally reasonable answer there, too.  It seems like there would be some principle at stake here that’s like well, something’s a fixture of the house.  You can’t take the gutters with you, or something.

D, yes because the man gave the buyer a warranty deed and the absence of the shutters violated a covenant of the deed.  I really don’t think that’s it.  You know, that strikes me as an answer that’s trying to sound complicated enough to be correct.  Like oh, yeah, that sounds like a lot of words, and I could get burned by this, maybe that’s one of those answers that just restates the principle in a way that means it’s a yes answer, but I don’t think it’s D.  I think I’m solidly in B or C. 

We’ve got B, we’ve got a good no answer.  Are the window frames fixtures or not?  B says well, the frames are repaired, it’s still there, the shutters were removed but, you know, it’s still a house, no harm no foul kind of thing; and C is yes because the shutters had become fixtures.  I wonder if it’s gonna come down to the sentence in the first paragraph which is the contractor who installed the shutters did so by drilling screws and brackets into the exterior window frames and shutters.

Is screws and brackets gonna be the key there?  Could totally be true that there’s some other thing here that’s gonna be an exception.  Like, yeah, well, they could have taken them but you’d have to mention in the deed blah blah blah something, deal.  That could be a reason it’s an A and D answer, but I’m not gonna get it if it’s that.  I think I’m still between B and C.  You know?  Here’s what I’m gonna say.  This is close, but I think the shutters have become fixtures.  I’m a little confused about what these shutters are, because it says the brackets are on the exterior window frame.  Are they exterior shutters?  Usually your shutters are inside so you can, you know, not have to go outside to manipulate them, but maybe that’s just a weird construction thing.  Like it had to reach around to the outside of the house. 

Anyway, I think, could be totally wrong, but I think something that’s been installed into the house in this way with screws and brackets, even though you can unscrew stuff and unbracket it, but whatever.  I think I’m gonna say that this is right over that line; it’s close but it’s right over the line of this is a fixture of the house, you can’t just take it with you, you can’t take all the doors with you.  Or maybe you could, I dunno, [Laughing] but I’m going with C, final answer.  B is my second choice. 

Let’s see if the coin is going to get me twice in a row.  Let’s flip a coin, preparing to flip.  The coin agrees with me.  Okay, good.  Suitable for episode 500, the coin and I agree on answer C, yes because the shutters had become fixtures, and we’ll see if the coin and I got it right.

Andrew:         And if you’d like to play along with Thomas and the coin, you know how to do that.  Just share out this episode on social media, include the hashtag #T3BE, include your guess, your reasons therefore.  We will pick a winner and shower that winner with never ending fame and fortune!  Fame and fortune not guaranteed.

Thomas:         [Sighs] Ah, and that’s our show.  I know, I just want to savor it.  Episode 500, eminent romaine, we finally got there Andrew.  So much fun.

Andrew:         [Sighs] Oh.  Yeah.

Thomas:         I’m glad we saved it.  Here’s to another at least 5 more episodes.

Andrew:         [Laughs]

Thomas:         No, sorry!  Here’s to another 500 more. 

Andrew:         Alright!

Thomas:         [Laughs] Congrats, but for real, congrats, Andrew.  500 amazing episodes of this show is an accomplishment and you knock it out of the park.  You’re like Pujols with the Dodgers, you know?

Andrew:         [Laughs]

Thomas:         You’re still knocking it out of the park.

Andrew:         I’m old and slow and occasionally get ahold of one?  Okay, fair enough.

Thomas:         Hey, he’s having a good season!  I thought that was a compliment.

Andrew:         No, I accept the compliment.  I will also say one of the things I think is a defining characteristic of this show is your work ethic.  We’ve done 500 episodes, I think we’ve had two episodes that got delayed by a couple of hours due to forces beyond our control, but we delivered episode – we’re the post office of podcasting.

Thomas:         Aww.  Well, pre-DeJoy.

Andrew:         Yeah, pre-DeJoy.

Thomas:         [Laughs]

Andrew:         Naw, we deliver ‘em on Christmas, we deliver them when we’re off on holidays.

Thomas:         It’s true.

Andrew:         You record here when you’re out with your family at Disneyland.

Thomas:         Yeah, I think my wife’s filing for divorce right now?  I don’t care, I gotta record.

Andrew:         Well, you know.

Thomas:         She’s out there [Laughing] takin’ the kids.

Andrew:         You’ve got an OA to do.

Thomas:         [Laughs] Appreciate that.

Andrew:         But you really set the tone for that.

Thomas:         Aw.

Andrew:         And I think that’s awesome.

Thomas:         Here’s to 500 more for real, at least.

Andrew:         Absolutely.

Thomas:         Congrats, Andrew.  Alright everybody, thanks so much for listening, we’ll see you next time.

[Show Outro]

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