KingStreet

Breaking! In H.C. Cornuelle, Inc. v. City and Cnty of Honolulu, No. 14068 (Haw. July 17, 1990), the Hawaii Supreme Court held that the City and County of Honolulu inversely condemned a strip of private property in downtown when it prohibited development and use of that land because the City intended to acquire it in the future for a road-widening project.

Wait, what? “Breaking,” you say? This memorandum opinion was issued nearly 30 years ago. What gives? Well, we remember this case from back in the day when we were just starting out, but had long forgotten about it. Plus, the same case resulted in one of the first post-Williamson County Ninth Circuit opinions, because the landowners originally sued for the taking in federal court, but were bounced out for ripeness. The Hawaii Supreme Court’s opinion affirmed the Hawaii trial court’s takings judgment.

This is an unpublished opinion, so we figured we’d just post it here for posterity to prevent it going down the memory hole. Check it out. An enjoyable read. The court concluded that the City’s use of its land use regulatory power to prohibit the owner from using its property because the City planned in the future to expand King Street (see above photo for how it looks today), was “and banking” and a taking:

The trial court was correct in its conclusion that the City’s actions constituted an unconstitutional taking of the landowners’ property. A governmental restriction on the use of land results in an unconstitutional taking under the Hawaii and United States Constitutions if it: (1) does not substantially advance a legitimate state police power interest such as public health, safety or welfare (including aesthetic values), or (2) denies the owner all economically viable use of the land. See Nollan v. California Coastal Cornm’n, 483 U.S. 825, 834, 107 S. Ct. 3141, 3146, 97 L. Ed. 2d 677, 687 (1987). The City was engaged in a “land banking” operation, prohibiting the use of the property until it eventually acquired ownership. Such land banking is not a legitimate state police power purpose. Gordon v. City of Warren Planning and Urban Renewal Comm’n, 388 Mich. 82, 199 N.W.2d 465, (1972).

Slip op. at 4.

This case applied the then-valid Agins “substantially advance a legitimate state interest” takings test, which the U.S. Supreme Court later repudiated in a different Hawaii case, Lingle. But the rationale is still valid, and the Hawaii Supreme Court’s conclusion that land banking (stopping use and development when the government is going to take the property in the future) “is not a legitimate state police power purpose” simply means that such actions violate due process (Lingle), and are not takings (Agins). This situation could also be a taking under the separate Lucas standard, but the Hawaii court of course didn’t cite that case because it would be issued by the U.S. Supreme Court two years later.

Check it out, and add to your library.

H.C. Cornuelle, Inc. v. City and Cnty of Honolulu, No. 14068 (Haw. July 17, 1990) (memo. op.)