Midkiff v. Tom

No. 80-4368 (9th Cir. March 28, 1983)

ELR Digest

The Ninth Circuit rules that the Hawaii Land Reform Act, which allows the state to condemn a residential lessor's property and sell it to lessees, unconstitutionally allows taking of property for private use. The Hawaii Legislature determined that a few persons were monopolizing residential property in the state, leading to artificially high land prices. The Act was to remedy this situation. In appellant landowners' suit for a declaratory judgment that the Act was unconstitutional on its face, the district court sustained the Act.

The Ninth Circuit first rules, in a footnote, that the district court was within its discretion in hearing the case rather than abstaining in favor of the state courts. The court then rules that the Act is unconstitutional because it violates the public use requirement. The court notes that the framers of the Constitution intended to prevent the majority from invading minority rights and that the Fifth and Fourteenth Amendments were adopted expressly to prevent the taking of private property from one for the private use of another. The court declares that in no case has a law been upheld that transfers property from A to B solely for B's benefit. To be valid, a condemnation must be (1) for an historically accepted public use, (2) for a change in land use, (3) for a change in possession, (4) for a transfer to the government, or (5) de minimis for the development of nearby land. The Act fits none of those categories and so is unconstitutional.

Appellees argued that if the taking serves a legitimate government objective and is within the police power, the public use test is met. They relied on Berman v. Parker, 348 U.S. 26 (1954), where the Supreme Court upheld condemnation of a blighted urban area for resale to private developers. However, the Ninth Circuit distinguishes Berman because it involved condemnation of slums for area redevelopment rather than structure-by-structure condemnation, and resulted in a change in land use, not just a change in ownership or the owner's objectives. Furthermore, the property was transferred from the private owner to the government for a public purpose.

Appellees also argued that a court may not question a legislature's finding of public use unless that finding involves an impossibility, citing Old Dominion Land Co. v. United States, 269 U.S. 55 (1929). The court distinguishes Old Dominion and its progeny as involving determinations of Congress, not state legislatures. Further, the court declares that the Act so clearly lacks public use, the court would overturn the Act even if Congress had passed it.

Judge Poole, concurring, addresses the arguments raised in the dissent. First, the judge argues that abstention would be improper. The judge declares that if this act does not involve private use, the distinction between public and private use is meaningless. And while the legislature's finding is entitled to deference, the courts have the power to decide whether a use is public. A public use may involve private benefits, but those benefits must be incidental to the dominant purpose of the use. The judge questions the findings of the legislature that the Act would alleviate the no purpose but to change land ownership among private parties.

Judge Fergusson, dissenting, would have the federal courts abstain from deciding the issue, because (1) the problem is local, (2) local determination would encourage state experimentation in land reform, (3) state proceedings under the Act were underway when the suit was first heard, and (4) a state ruling might obviate the need to decide the federal issues. Alternatively, the judge would find the Act constitutional, at least on its face. On the issue of public use, the majority failed to give great deference to the findings of the legislature. The dissent finds the pattern of land tenure as described by the legislature and commentators to be a genuine public problem, one that the state may legitimately address. The dissent also would reject the majority's five-category enumeration of public uses as unduly restrictive and not supportive of the majority's conclusion.

The full text of this opinion is available from ELR (39 pp. $5.50, ELR Order No. C-1304).

Counsel for Appellants
Clinton R. Ashford
Ashford & Wriston
P.O. Box 131, Honolulu HI 96810
(808) 524-4787

G. Richard Morry
Hamilton, Gibson, Nickelsen, Rush & Moore
745 Fort St., 20th Floor, Honolulu HI 96813
(808) 521-0400

Counsel for Appellees
Yukio Naito
Shim, Sigal, Tam & Naito
333 Queen St., Suite 800, Honolulu HI 96813
(808) 524-5803

Thomas T. Watts
Kemper & Watts
130 Merchant St., Suite 1106, Honolulu HI 96813
(808) 524-0330

James A. Stubenberg
Stubenberg, Shigemura, Roney et al.
32 Merchant St., Honolulu HI 96813
(808) 524-0933

Alarcon, J.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]