Emerald Isle Takings Case Could Have National Implications

May 23rd, 2012
by Dan Way

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RALEIGH — Four property owners suing the Town of Emerald Isle alleging an unlawful taking of their beachfront lots would strike a blow nationally for property rights protections if they win, their lawyers say. 

But Emerald Isle’s lawyers contend a property owners’ victory would impair government maintenance of and public access to the beaches that are the tourism livelihood of oceanfront economies.

“I would think any beach town would have an interest in how this plays out,” said Brian Edes, an attorney with the Wilmington law firm of Crossley, McIntosh, Collier Hanley & Edes that is defending the town.

Jeanette Doran, executive director and general counsel of the Raleigh-based North Carolina Institute for Constitutional Law, filed an amici curiae brief jointly with the Pacific Legal Foundation in support of the plaintiffs and for payment of their costs and attorney fees.

Doran said Emerald Isle’s use of government power to crush property rights has implications beyond North Carolina’s beach towns.

“It could come up as if your property were taken for a road, or a school, or a fire station,” Doran said. “Business properties can be taken. Homes can be taken. A portion of someone’s property can be taken. Farms can be taken.”

The case is in its infancy. The merits won’t be argued until a somewhat unusual decision is made in a pitched legal fight over whether the case belongs in U.S. District Court Eastern District or state court. 

Gregory and Diane Nies, George and Maria Tederick, John and Barbara Foster, and Gregory and Judy Watts claim ordinances and actions by the town government on the 12-mile island floating in Carteret County’s Bogue Banks have created untenable nuisances interfering with their use of their land.

Those include “people driving across their property, running over their furniture, scaring people off the beach including on their own property,” said Robert H. Hornik Jr. of the Brough Law Firm in Chapel Hill, who is representing the property owners.

“My clients have asked, directed, people to get off their property and have been faced with uncooperative responses,” Hornik said. The property owners have been subjected to threats and intimidation, “fortunately, not all that frequently.”

The plaintiffs contend one town law “authorizes people who get permits from the town to drive essentially on parts of our clients’ property without our clients’ permission,” Hornik said. 

The portion of the property most affected is the dry sand area on the oceanward side of the “toe of the dune,” which is the first dune one would encounter if walking inland from the water.

Beach nourishment projects also play a role. Beach nourishment is the process of replenishing sand that erodes or drifts away. Easements were obtained to allow for the projects in 2005.

Emerald Isle officials “never sought or obtained permission from anybody as far as I know to preserve that” easement access right, Hornik said. 

Another ordinance prohibits placement of beach equipment in a 20-foot area running along the toe of the dune, Hornik said. That encroaches on his clients’ private property.

“The U.S. Supreme Court has recognized that perhaps one of the most important rights a property owner has is the right to exclude others from their own property,” Hornik said.

“These ordinances diminish their property value. They want to be compensated for the loss of value due to the town’s actions,” Hornik said.

“They’re asking for just compensation” under the North Carolina and U.S. constitutions totaling “hundreds of thousands of dollars each. That amount will be better determined when we have appraisals” and loss estimates, he said. The land value of the properties is $1 million each, he said.

Edes finds the plantiffs’ challenge puzzling. “Our position on that is there’s a North Carolina general statute that specifically authorizes beach towns to regulate vehicle traffic on the beach,” Edes said. 

“It’s my understanding that they have been regulating vehicle traffic on Emerald Isle as far back as the early ’80s,” Edes said. “They’re certainly acting within the police power to promote the safety and welfare of the citizens.”

As for the property owners’ other claim, he said, “I think clearly they gave easements to perform the beach nourishments.”

Edes said he has no knowledge that anyone has ever asserted these issues against the town of 3,700 people before.

“I would say it’s a unique case” because “most beachfront property owners want to have a safe and orderly beach. Most beachfront property owners appreciate beach nourishment,” Edes said. 

“I just don’t see how these people are harmed” by ordinances that promote the health and safety of citizens, Edes said.

“These folks still have access, still have beachfront properties,” he said. “And the town of Emerald Isle has absolutely no incentive or desire to decrease anyone’s property value.”

But Doran insists the town is being “callous, sneaky” in removing the case to federal court. 

Decades of U.S. Supreme Court precedent say such takings cases first must be heard in state court, even if they pose federal issues. Until all state proceedings and remedies are exhausted, the case is not considered ripe for federal litigation.

Once a case is removed from state court to federal court, federal court may either remand the case to the state court to exhaust all state-level options, or dismiss it for lack of jurisdiction.

Doran worries that outright dismissal by the federal court would, at worst, prevent the property owners from ever being heard in a court setting. At a minimum, dismissal could run up attorneys’ fees in an attempt to discourage the property owners from pursuing the matter.

“I really have some concerns that if we don’t stop Emerald Isle from doing this we do open the door for governments across the state to use these kinds of tactics to avoid paying people whose property has been taken,” Doran said.

“You can’t have it both ways. You can’t file federal claims and then say, ‘Wait a minute, we have to exhaust all of our state remedies first,’ ” Edes said. 

“If they weren’t ripe they shouldn’t have filed a federal court case in the first place” claiming federal statute infractions and violations of the Fifth Amendment’s due process and property takings guarantees, Edes said.

“There’s nothing sneaky about it,” Edes said. He said he told the plantiffs’ lawyer of his intention to send the matter to federal court in their very first discussion.

“If every time somebody who has their property taken files in state court, then the government turns around and removes it to federal court ... we end up in this procedural merry-go-round and it ultimately will end up with the government taking their property and never getting paid for their property,” Doran said. 

“It’s been done in other places across the country. It does not yet seem to be an epidemic but certainly if Emerald Isle were to succeed in keeping the case in federal court ... that will encourage governments all across the state to pursue the same kind of shenanigans,” she said. 

“If they can do it to property owners in Emerald Isle,” she warned, “they can do it to property owners in the Piedmont.”

Dan Way is a contributor to Carolina Journal.