Recently in Property Law Category

Earlier this week, we took a look at the Monsanto case, which had major implications for patent law and our nation’s farming industry. We also hinted at the outcome of the Court’s two other unanimous decisions for this week, one dealing with bankruptcy and defalcation, and the other dealing with a shady tow truck lot and the limits of federal law preemption.

Defalcation Defined

It is undisputed that Randy Bullock was not acting in bad faith when he violated his fiduciary duty as trustee to family life insurance trust. On three occasions, he borrowed funds from the trust, and each time, he paid the trust back — with interest. Nonetheless, his brothers sued and won a judgment against him. He sought to discharge that debt in bankruptcy. The code, however, prevents discharge of debts resulting from defalcation.

The Supreme Court on Tuesday ruled that practical possibilities trump their theoretical counterparts.

In a 7-2 decision, the Court found that a floating home didn't qualify as a "vessel" because "a reasonable observer ... would not consider it to be designed to any practical degree for carrying people or things on water."

(Sidebar: We basically reached the same result when we previewed this case in September.)

Lonely Island may be able to resolve the second case the Supreme Court will hear on First Monday: Lozman v. City of Riviera Beach.

The question in the case is whether a floating structure that is indefinitely moored, receives power and other utilities from shore, and is not intended to be used in maritime transportation or commerce constitutes a "vessel" under 1 U.S.C. § 3, thus triggering federal maritime jurisdiction.

The Supreme Court takes bureaucratic hassle into account when making tax refund decisions.

The Court ruled in a 6-3 decision on Monday that Indianapolis does not have to refund sewer project costs assessed to residents who ended up paying more than their neighbors due to a change in the City’s financing plans, because the City had a rational basis for distinguishing between property owners who had already paid their share of project costs and those who had not, reports The Washington Post.

The rational basis, in this case, is that it would be an expensive administrative nightmare to rectify the situation.

The Supreme Court ruled today that an Idaho couple can bring a civil action against the Environmental Protection Agency (EPA) to challenge a compliance order, instead of waiting for the EPA to initiate a court action. Federal courts had previously rejected the couple's claims for lack of subject matter jurisdiction.

While the Nine heard oral arguments about the Stolen Valor Act in U.S. v. Alvarez on Wednesday, the Court was also releasing opinions.

The Supreme Court issued three more opinions this morning, raising the decision tally for their first post-recess week to seven. It was a day of reversals, with the Court sending the following cases back to the Montana Supreme Court and the Ninth Circuit Court of Appeals.

Article III courts may only hear cases or controversies. As of today, Magner v. Gallagher, a case from the Eighth Circuit Court of Appeals that was set for oral arguments this month before the Supreme Court, no longer meets those criteria.

The City of St. Paul, Minn. withdrew its petition to the Supreme Court today, so the case will instead proceed to trial in a Minnesota federal court, reports SCOTUSblog. The Supreme Court had scheduled arguments in the case for February 29.

Grant of Certiorari Vacated

In Madison Cty. v. Oneida Indian Nation of N.Y., No. 10-72, an action concerning an Indian tribe's collection of property taxes, the Supreme Court vacated a grant of certiorari and remanded to the Second Circuit where that court needed to address, in the first instance, whether to revisit its ruling on sovereign immunity in light of new factual developments, and -- if necessary -- proceed to address other questions in the case consistent with its sovereign immunity ruling.

Stop the Beach Renourishment, Inc. v. Fla. Dept. of Env. Protection, Inc., No. 08-1151, involved an action challenging the Florida Department of Environmental Protection's approval of permits to restore a portion of beach eroded by several hurricanes.  The Court affirmed the Florida Supreme Court's holding that the approval of the permits did not unconstitutionally deprive plaintiffs of littoral rights without just compensation, on the ground that there could be no taking unless petitioner could show that, before the Florida Supreme Court's decision, littoral property owners had rights to future accretions and to contact with the water superior to the State's right to fill in its submerged land.

As the Court wrote:  "We consider a claim that the decision of a State's court of last resort took property without just compensation inviolation of the Takings Clause of the Fifth Amendment, as applied against the States through the Fourteenth, see Dolan v. City of Tigard, 512 U. S. 374, 383-384 (1994)."

Related Resources

• Full Text of Stop the Beach Renourishment, Inc. v. Fla. Dept. of Env. Protection, Inc., No. 08-1151

Salazar v. Buono, No. 08-472, concerned an action involving an underlying Establishment Clause challenge to a Latin cross placed on federal land by members of the Veterans of Foreign Wars (VFW) to honor American soldiers who died in World War I.  The Supreme Court reversed the Ninth Circuit's order precluding the government from transferring the cross and the land on which it stood to the VFW in order to comply with a prior injunction, holding that 1) plaintiff had standing to maintain the instant action because a party that obtains a judgment in its favor acquires a "judicially cognizable" interest in ensuring compliance with that judgment; but 2) the district court erred in enjoining the government from implementing the land-transfer statute on the premise that the relief was necessary to protect plaintiff's rights under the 2002 injunction.

As the Court wrote:  "The Court is asked to consider a challenge, not to the first placement of the cross or its continued presence on federal land, but to a statute that would transfer the cross and the land on which it stands to a private party. . . . The District Court permanently enjoined the Government from implementing the statute. The Court of Appeals affirmed. We conclude that its judgment was in error."

Related Resources

• Full Text of Salazar v. Buono, No. 08-472