Short Circuit 175 Anthony Sanders Hello, and welcome to Short Circuit, your podcast on the Federal Courts of Appeals. I'm your host, Anthony Sanders, Director of the Center for Judicial Engagement at the Institute for Justice. If you enjoy this podcast, you should check out our newsletter and often irreverent take on recent Court of Appeals opinions, which we publish every Friday, you can subscribe at shortcircuit.org or find it on the Volokh Conspiracy Blog. And, please also check out our sister podcast, the documentary series, Bound by Oath. We're recording this Friday, May 28, 2021. And we have what you might call the Big 10, Eastern Division episode. That's because with apologies to the other members of that half of the conference from other states, today, we have cases from Ohio and Michigan and both of course from the Sixth Circuit. In fact, we wanted to go straight to the front lines to find out what was going on. So, we have a special guest who litigated one of the cases. Emily White is a partner at Dann Law in Columbus, Ohio. There, she practices in the areas of student loan debt, disability rights and consumer law. Previously, she worked for Legal Aid Society of Cleveland, and Disability Rights Ohio. She's a graduate of City University of New York School of Law and of the University of Illinois on the other side of the Big 10. Emily, welcome to Short Circuit. Emily White 01:23 Good morning. Thanks for having me. Anthony Sanders 01:25 - 1 - Transcribed by https://otter.ai Now, Emily is going to tell us about a takings case appeal on a preliminary issue but a very important preliminary issue that she recently won at the Sixth Circuit. But first, let me introduce IJ attorney Kirby Thomas West, although a native Pennsylvania which is in the Third Circuit, of course, Kirby has agreed to kindly tell us about a case from Michigan, or as Ohio State listeners say the state up North, which is a tribal law case with some really interesting history and follows up to some extent on a case some of you may remember from last year's Supreme Court term McGirt vs. Oklahoma, Kirby, welcome back the Short Circuit. Kirby Thomas West 02:04 Thanks, Anthony. I'm happy to be here. Although as a big time Penn State fan it pains me a little bit that we're focusing so much on Michigan and Ohio today. Anthony Sanders 02:13 Right. Well, at least we're in that division. And you can rest assured our episode on the Pennsylvania Supreme Court from last fall, hopefully can keep you happy. And listeners, of course can go back and find that in the archives. Now, Emily, tell us about your case, Harrison vs. Montgomery County. And maybe you can start off by recounting what happened to your client, Alana Harrison. Emily White 02:36 Sure. So, my client owned a home where she had delinquent property taxes. And in this case, the home was actually worth more than what was owed on the property taxes. And in Ohio, shortly after the Great Recession, there was a movement to address vacant abandoned lands. And one of the problems that the legislature was encountering, especially at the end of the Great Recession, was that sometimes the property, the property tax delinquency was worth actually more than what the property was worth, it was hard to find people to buy these properties after a tax foreclosure. And so, what that meant is that you'd have communities that had land that was essentially not used, that people would - 2 - Transcribed by https://otter.ai walk away from will say in this day and age, that's not so much of a concern. But that was the context of the law that we challenged in this case. Which what it did was prior to the law, whenever there was a tax delinquency, the government would have to bring a foreclosure and try to sell the property to collect the property taxes. And the legislature decided to create a new streamlined procedure, where instead of selling the property, the property could be directly transferred to a land bank and extinguish the property tax. And then very quickly get it into the hands of like, like say a land bank for economic development purposes. While the law was intended to address situations where the property taxes were worth less than what the property was worth in practice, now in 1000s of cases across our state, this this procedure is being used in cases where properties are worth more than what the taxes are owed. And so, in our case, we brought a takings claim not to challenge the tax foreclosure itself, but to challenge the taking of the surplus equity, which was modest in this case but could but could be very large in other cases. And in in this case at the trial court level, the court said that the claim was precluded, that we could not bring a constitutional takings claim for just compensation, because that should have been raised in the adjudication of the tax foreclosure itself. And so, we appealed that decision to the Sixth Circuit. And we argued that we really didn't get a chance to raise a claim for just compensation because it didn't become ripe until after the property was taken, which was at the conclusion of the process, not the beginning of the process. And ultimately, the Sixth Circuit agreed that we have our day in court, that we have the right to litigate this claim. And Judge Sutton, who wrote the opinion, reiterated with the Supreme Court announced in this this case, Knick, in in the prior year, that whenever there's a constitutional violation, individuals have a constitutional remedy, they can go directly to federal court to assert that claim. And that's just what we did in this case. And we're pleased with the court's decision and reasoning and the fact that our client finally has the opportunity to litigate her claim and seek just compensation. Anthony Sanders 05:55 - 3 - Transcribed by https://otter.ai And the case is class action. I understand. Where, maybe tell us a little bit about that. And then where is it in the whole class action certification process? Emily White 06:06 Sure. So actually, this case concerned the practices of Montgomery County, Ohio, which is Dayton. There's a companion case that we have also brought in Cleveland, that is still pending. And actually class certification was recently denied on the question of evidentiary. How do you prove what the amount of surplus equity is, we asserted an argument that because the value of the property is really baked into the property tax, and that one of the things that is decided in the tax foreclosure process is the validity of the tax lien, that it's fair to use the Tax Valuation to determine what the value of the property was at the time of the taking. Our trial court disagreed with that and granted an unlimited motion following the ordinary rule in other non-tax cases is that tax foreclosure is the Tax Valuation is not used to determine valuation that you have to use other appraisal methodology. And once they decided that you basically have to have an individual appraisal for every single property. They concluded that it would be unmanageable to have all these cases litigated in one class action. So, we have a petition for interlocutory review of that denial of class certification that is still pending with the Sixth Circuit and our Cleveland cases on hold until we get that determination. Anthony Sanders 07:39 And the facts of your named plaintiff, I found particularly galling, that she so she had this property moved into a land bank. And then the county claimed she should have appealed that determination to the state court. And I think she had something like, you could correct these numbers, 15 days, right, 15 days to appeal it. And yet, she had a right of redemption of 28 days. And it wouldn't be till after those 28 days that her property rights was even extinguish because of how a right of redemption works, where you actually pay the taxes back and get the property back. And so, she was in this like, Bizarro never world where she could never even raise her constitutional claim. Is that right? - 4 - Transcribed by https://otter.ai Emily White 08:28 That's exactly right. And one of the things that we argue that I kind of wish the court had delved into a little bit more is the nature of the takings claim itself. It seems to me that there are different types of takings that you can raise. One is the classic Kelo taking, where you're essentially raising the claim defensively to say don't do the taking it all. But there is another type of taking, which is one for just compensation that I think is distinguishable from the defensive claim. Perhaps it would make sense that if you want to raise it defensively, that you would have to raise that claim in the proceeding to stop the taking itself to stop the physical taking of the property. But in this case, we're actually respecting and acknowledging that the transfer the property has happened, and we cannot undo it as much as my client would like that.