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Saturday, December 31, 2016
CNMI Government Takes House Lot from Owner, Refuses to Pay
By Robert Thomas @ 7:32 PM :: 1241 Views :: Land Use

What If The Government Gives A Takings Party, But Doesn't Show Up?

by Robert Thomas, InverseCondemnation, December 28, 2016

We love Leo Rosten's classic definition of chutzpah: "that quality enshrined in a man who, having killed his mother and father, throws himself on the mercy of the court because he is an orphan." Mr. Rosten's dictum stretches around the world -- apparently even into its remote corners such as the Northern Marianas Islands.

Check out CNMI v. Lot No 281-5 R/W, No. 2013-SCC-0006 (Dec. 28, 2016), for the exemplar. In that case, the CNMI government took private property belonging to Ms. Quitugua. Not by regulating it (a favorite topic of this blog), but by "straight condemnation." That is, the CNMI exercised the power of eminent domain to build a road. Not great for the owner, but she apparently didn't object and indeed stipulated to a final judgment which granted the CNMI fee simple title, and gave her a judgment of $77,137 plus interest for just compensation. So far, so good.

At that point, the CNMI apparently left the party. For twenty years.

It didn't pay the judgment, despite the owner "repeatedly mov[ing] for an order in aid of judgment." Finally, decades later, the owner and the court had enough: the court issued an order in aid of judgment in which it restored fee simple title to the owner and hit the condemnor with interest. And the court also issued a writ of execution, ordering the local branches of the banks in which the CNMI government kept its cash to deliver "all monies and proceeds" to the property owner's lawyer to satisfy the judgment.  

Have I got your attention now?

It sure did. The next thing we know, the CNMI government, after doing nothing since 2005 suddenly has all sorts of constitutional concerns. The trial court's order, you see, violated the separation of powers: having taken property and not paid compensation (as required by the constitution), the government claimed that a court forcing it to pay compensation would violate the constitution. Phone call for Mr. Rosten! 

Courts can't order us to pay property owners, it argued. We have to have appropriated the funds and there's this statute that says we can't disburse funds unless they have first been appropriated. And if we don't, too bad. The CNMI government relied on an earlier CNMI Supreme Court decision which held that the appropriations statute was constitutional, and "although Commonwealth courts may determine the amount owed by the state in just compensation and may enter judgment against the state, there the judicial power ends."

Well, it turns out that the CNMI government should have just paid the darn thing, because in CNMI v. Lot No 281-5 R/W, No. 2013-SCC-0006 (Dec. 28, 2016), the court used the opportunity to revisit its earlier decision, because it "faces a growing need to enforce landowners' constitutional right[s] to just compensation in light of the government's repeated failure to honor that right." Slip op. at 5. The property owner here was not the only one left hanging by the CNMI government, which "has 'millions of dollars' worth of outstanding land obligations to private land owners whose lands were taken for various public purposes[.]'" Id. The court rightly concluded that the just compensation requirement is self-executing, and "land owners are entitled to just compensation even when the legislature has not established a specific procedure to enforce it." Slip op. at 6. "By parity of reasoning," the court held, "absence of legislative appropriation cannot bar recovery." Slip op. at 7.

Recognizing the "clear gap between the law and reality," the court noted that more than twenty years had passed since the taking, and the CNMI government still has not paid up:

Here, the Commonwealth has refused to pay Quitugua, asserting the land compensation funds are exhausted and that no other appropriated funds are available to satisfy the judgment. However, like Decker and Peterson, we find that the government may not simply neglect its outstanding land compensation judgments for lack of appropriation. If the court cannot order the government to pay the judgment, the Legislature would be able to effectively annul Quitugua’s constitutional right to just compensation via non-action. This would be an unreasonable, unjust, and unconstitutional result.

Slip op. at 8. Thus, the court concluded, in the absence of the legislature adhering to its constitutional duty, the courts themselves have a duty to step in an "enforce the constitutional mandate of just compensation contained in the Takings Clause." Slip op. at 9.

Yes, the CNMI Constitution also has an Appropriations Clause, which requires all revenue and appropriations bills be introduced in the CNMI House of Representatives. But the court held this was no impediment because there's a way to read the two provisions (the Takings and the Appropriations clauses) in harmony, which the court did.

However, despite all of the above (perhaps it was reality intruding again into the domain of law), the supreme court concluded the trial court should not have issued the writ of execution and told the banks to deliver up all of the CNMI's cash on deposit to Quitugua's lawyer after all, but should have used some other "proper method" to enforce the judgment:

In light of the risk of interference with basic government functions, we agree a writ of execution is not allowed against the Commonwealth unless a statute permits otherwise. Accordingly, we vacate the Writ of Execution and remand instructing the court to use a proper method to enforce the judgment owed to Quitugua.

Slip op. at 11.

Just what that other "proper method" might be the court didn't say, and we wouldn't hazard a guess. Send a strong letter, perhaps? Go down to the CNMI Department of Transportation with a paper bag full of cash? Vote differently in the next local election? Who knows.

But despite kind of ruling against the property owner, the court fired a shot across the bow of the CNMI government: in the future if you don't pay just compensation judgments, we might get really mad: the court held that its ruling allowing seizure of bank accounts would apply to any cases in the pipeline in which the CNMI government doesn't pay promptly. Which is a strange, conditional approach to say the least. Poor Ms. Quitugua is out of luck and has to keep pursuing payment because to make the government pay -- while not unconstitutional -- would interfere with government functions (to us, it seems the CNMI government is already doing quite a good job of interfering with government functions without her help). But it would not interfere with government functions to order seizure of bank accounts for other landowners down the road. We're not sure how the passage of time would remedy the supposed defect, but there it is. Perhaps yet again this was reality intruding on the law.

But we think the court's message has been sent. Stop the nonsense, CNMI government, and do your constitutional duty! So despite an anticlimactic ending, the court definitely, maybe, held the CNMI government to task for taking private property and not paying compensation.

Something tells us this story isn't over quite yet.

PDF: Comm'w of the Northern Marianas Islands v. Lot No. 218-5 R/W, No. 2013-SCC-0006 (CNMI Dec. 28, 2016)

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