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Smolker Mathews Gets Trial Win Against FDOT and Secures $1,050,000 Settlement on an Inverse Condemnation Claim that the FDOT’s Access Connection Permit Conditions Constituted Extortionate Exactions in Violation of the Unconstitutional Conditions Doctrine
Murphy Auto Group, Inc. v. Florida Dept. of Transportation
Under Florida law, landowners whose property abuts the State Highway System have s constitutionally protected appurtenant abutter’s easement of access to the roadway. In this case, our client, Murphy Auto Group, Inc. (“Murphy Auto”) applied to the FDOT for an access connection permit to U.S. 27 authorizing construction of turn lanes within the FDOT right-of-way to serve Muphy Auto’s Toyota dealership in Haines City, Florida. Though the additional impervious surface of the turn lanes created de minimus additional runoff to the FDOT’s existing U.S. 27 drainage system, FDOT conditioned its approval on Murphy Auto reconstructing the entire existing U.S. 27 drainage system in the vicinity of the dealership. As the dealership was nearing completion, Murphy Auto had little option but to acquiesce to FDOT’s extortionate leveraging of its police powers. In so doing, Murphy Auto incurred over $600,000, including interest on its sunk costs.
The U.S. Supreme Court’s “Unconstitutional Conditions Doctrine” holds that “a unit of government may not condition the approval of a land-use permit on the owner’s relinquishment of a portion of his property unless there is an ‘essential nexus’ and ‘rough proportionality’ between the government’s demand and the impacts of the proposed land use.” Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (2013). Murphy Auto brought an inverse condemnation lawsuit against FDOT seeking reimbursement for the costs of the reconstruction. FDOT took the position the unprecedented position that it was not subject to the “Unconstitutional Conditions Doctrine” because it was exercising its proprietary rights as owner of the roadway rather than its police powers as a regulator. The trial court initially agreed with FDOT determining that any claim for damages was barred by sovereign immunity. On appeal, the Second District Court of Appeal reversed the circuit court. It held that “the unconstitutional conditions doctrine clearly applies under Koontz” and remanded to the circuit court for a trial on the merits. See Murphy Auto Group, Inc. v. Fla. Department of Transportation, 310 So. 3d 1066, 1069 (Fla. 2d DCA 2020).
At trial, the FDOT maintained that its policy was to require developers to pay 100% of the costs of improvements to the State Highway System associated adjacent private development regardless of the Unconstitutional Conditions Doctrine’s clear “essential nexus/rough proportionality” requirement, and even though its own traffic expert found that the required reconstruction was in excess of that needed to address the small amount of additional runoff from the turn lanes. After trial, the circuit court ruled in favor of Murphy Auto, holding that the FDOT’s permit condition constituted an excessive exaction amounting to a taking of property in violation of the Fifth Amendment’s takings clause. The case was ultimately settled for $1,050,000, including the costs of reconstruction, interest on its sunk costs and payment of Murphy’s attorneys’ fees and costs.
Smolker Mathews Successfully Defends Over 100 Private Beachfront Property Owners Against Walton County’s Attempts to Claim Public Customary Use of Their Private Beachfront Properties
In Re: Affirming Existence of Recreational Customary Use on 1,194 Private Properties Located in Walton County, Florida
This case represented a 7-year property rights odyssey involving 1,194 privately owned, dry sandy beach parcels fronting the Gulf of Mexico along Highway 30-A in Walton County, Florida. The dispute started in 2016 the Walton County Board of County Commissioners adopted an ordinance declaring that the general public had the right by custom to use these privately-owned parcels for traditional recreational uses. The doctrine of public customary use of privately owned dry sandy beach was first addressed by the Florida Supreme Court in City of Daytona Beach v. Tona-Rama, Inc., 294 So. 2d 73 (Fla. 1974). Though the case was decided on other grounds, the Court noted in dictum: If the recreational use of the sandy area adjacent to mean high tide has been: (1) ancient, (2) reasonable, (3) without interruption and (4) free from dispute, such use, as a matter of custom, should not be interfered with by the owner. Smolker Mathews and several other law firms challenged the ordinance as violating: (1) the Fifth Amendment to the United States Constitution’s takings and due process clauses because it effectively extinguished the right to exclude others from one’s property which is considered one of the most treasured sticks in the bundle of rights known as real property; and (2) the separation of powers doctrine that reserved to the courts, and not local governments, the power to adjudicate real property rights.
While the cases were pending, the lawyer group successfully lobbied the Florida Legislature to adopt section 163.035, Florida Statutes. It provided that a governmental entity may not adopt or keep in effect an ordinance or rule that finds, determines, relies on, or is based upon customary use of any portion of a beach above the mean high-water line unless such ordinance or rule is based on a judicial declaration affirming recreational customary use on such beach. The statute also established a mandatory administrative process, including public notice and hearings before the local governing body, at which the government must present to the public its basis for any claim of recreational customary use and gather public input before seeking such a judicial declaration. In response to adoption of section 163.035, Walton County conceded that section 163.035 invalidated the ordinance which in turn mooted the pending lawsuits. But the County did not stop there. It then followed the required administrative process ultimately seeking a circuit court declaration of public recreational use of nearly all 26 miles of Walton County dry sandy beach. Over 500 landowners intervened represented by various law firms (the “Intervenors”). Smolker Mathews represented around 100 of these landowners. The lawsuit presented a real case management challenge for the parties and the circuit court. The Intervenor law firms formed a united front in opposition to the County’s claims, and coordinated their activities to maximize effectiveness and avoid duplication of effort.
At the outset of the case, Smolker Mathews filed a motion to dismiss. It exhaustively traced the history of private property rights protection in Florida from territorial Florida, through statehood to the present clearly showing that Florida law as a whole directly conflicted with Tona Rama’s adoption of public recreational use as a rule of law in Florida because its application would deprive landowners of their rights to exclude others from their dry sandy beach and would amount to a judicial taking. The circuit judge denied the motion concluding that, while Tona Rama appeared to be dictum, he was nevertheless bound by earlier appellate court case that appeared to adopt Tona Rama as binding precedent. As discovery in the case proceeded, the County indicated it would rely upon approximately 10,000 affidavits it had solicited from the public purporting to show public customary use of Walton County dry sandy beach. Smolker Mathews then filed a motion to exclude the affidavits from evidence at trial on grounds that they constituted classic inadmissible hearsay. The circuit judge granted the motion depriving the County of one of the major sources of evidence it intended to rely upon as proof of customary use.
Smolker Mathews’ research also revealed that when the United States Congress’s granted statehood to Florida in 1845, it did so “on the express condition that [it] shall never interfere with the primary disposal of the public lands lying within [it]…whilst remaining the property of the United States.” See Act of March 3, 1845, ch. 75 & 76, § 7. This limitation would prove decisive in what would become a complete victory for the Intervenors because all of the 1,146 parcels in the lawsuit were owned by the United States until, starting in the early 1890s, it began selling the lands into private hands at various times until as late as 2013. Smolker Mathews filed a summary judgment motion arguing that that to the extent that any customary use of the Intervenors property could be established, any such use was interrupted and disputed when the United States acquired the Territories of East and West Florida from Spain in 1821 and continued to be interrupted and disputed during the entire period while the beach was owned by the United States. We also argued that if such customary use claims could be revived, the time period for determining if the use was “ancient” could not commence running by virtue of the condition of statehood until the property was no longer owned by the United States. The Court granted the motion.
This ruling coupled with earlier ruling that 43 years of uninterrupted use was not “ancient,” threw a major monkey wrench in the County’s case because they were forced to have to prove the elements of Tona Rama based on numerous different public use commencement dates spanning over 100 years. Recognizing that its case was floundering, and faced with having to spend millions of dollars on outside lawyers over the many months to try the entire case, the County ultimately settled with the Intervenors and final judgments were entered dismissing the claims against the Intervenors with prejudice, stating that “[t]here are no customary use rights in favor of Walton County, the public, or any other persons… and the issue of customary use is now and forever moot as to those beachfront parcels.”
