Kottschade Goes To Appeal

April 18, 2002

Should Fifth Amendment Property Rights Cases Be Decided In Federal Court?

Inman News Features

A lawsuit headed toward a St. Louis, Mo., appeals court may address the issue of whether Federal constitutional claims involving private property rights can be brought in Federal court rather than being decided by state court judges.

The case, Kottschade v. the City of Rochester, Minn., is being brought by home builder Frank Kottschade to the U.S. Court of Appeals for the Eighth Circuit.

A statement from the National Association of Home Builders, which is supporting Kottschade?s legal effort, outlined the facts in the case as follows: Kottschade owns approximately 16 acres of land in Rochester, Minn., zoned for single-family residences and townhomes. The city's land-use plan identifies the property as appropriate for higher-density townhome development. Kottschade applied to rezone the property to accommodate affordable housing at a greater density, and planning commission staff in Rochester recommended that the property be "up-zoned" to accommodate the desired development as long as a general development plan for the property was submitted and approved.

Kottschade developed and submitted a general development plan to construct 104 townhomes on the property, consistent with zoning laws, according to the NAHB?s description of the case. The city's planning and zoning commission recommended nine conditions that were adopted by the city council.

The nine conditions reduced the development potential of the property by more than 75 percent, according to Kottschade, shrinking the number of townhomes he could build from 104 to 26 and making the project economically infeasible in his estimation. Following months of additional reviews, Rochester's city council and zoning board of appeals upheld the planning and zoning commission?s conditions.

Kottschade then filed suit in the U.S District Court for the District of Minnesota, arguing that the city's regulations took his property and he was due just compensation under the Fifth Amendment to the U.S. Constitution. Fifth Amendment takings claims provide a Federal cause of action, but the district court decided that Kottschade needed to file his lawsuit in state court, according to the home builders association. The district court didn?t decide whether the city's conditions created liability for a taking, and Kottschade was denied a hearing in Federal court on the merits of his claim.

The home builders association expects the appeal to draw considerable attention and friend-of-the-court briefs from property rights advocates, municipal groups and environmental organizations.

The association said property owners must navigate countless legal hurdles to have the possibility that their case will be heard in Federal court. The added bureaucracy and red tape work to the advantage of government officials, who hold plans hostage to prevent review by an impartial Federal tribunal, according to the association. These administrative and judicial processes can take years and cost hundreds of thousands of dollars.

"We intend to use every legal avenue possible to draw attention to the plight of property owners like Frank Kottschade who have little or no timely recourse to Federal courts when it comes to takings claims," said NAHB President Gary Garczynski, a builder/developer from Woodbridge, Va.

Michael Berger of Berger and Norton in Los Angeles will be part of the team representing Kottschade during the appeal. Berger is one of the country's preeminent property rights lawyers and has prevailed in three takings cases before the U.S. Supreme Court, according to the NAHB.

Kottschade opening brief is scheduled for today. The parties anticipate a decision by the fall and the losing party is expected to explore avenues for review by the U.S. Supreme Court later this year.

Garczynski said the home builders association will support the case "all the way to the U.S. Supreme Court if necessary."

Copyright: Inman News Service

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