Bridge Aina Le'a, LLC v. Hawaii, State of , Land Use Commission et al

Filing 308

ORDER Addressing Evidentiary Issues And Scheduling Matters." Upon reconsideration, the court grants in part and denies in part the State's Motion in Limine No. 8 to Exclude Evidence and Testimony Concerning Consequential and Contr actual Damages. The court denies the State's additional request that it reconsider its ruling on Motion in Limine No. 1 to Exclude Argument and Evidence as to Alleged Due Process and Equal Protection Violations. As for the reconsideration motio n submitted by Plaintiff, the court invites a response from the State to be submitted no later than February 9, 2018, and an optional reply from Plaintiff to be submitted no later than February 13, 2018.". Signed by JUDGE SUSAN OKI MOLLWAY on 2 /2/18. (cib, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
BRIDGE AINA LE‘A, LLC,

)
)
Plaintiff,
)
)
vs.
)
STATE OF HAWAII LAND USE
)
COMMISSION; VLADIMIR P.
)
DEVENS, in his individual and )
official capacity; KYLE
)
CHOCK, in his individual and
)
official capacity; THOMAS
)
CONTRADES, in his individual
)
and official capacity; LISA
M. JUDGE, in her individual
)
and official capacity;
)
NORMAND R. LEZY, in his
)
individual and official
)
capacity; NICHOLAS W. TEVES,
)
JR., in his individual and
)
official capacity; RONALD I.
HELLER, in his individual and )
official capacity; DUANE
)
KANUHA, in his official
)
capacity; CHARLES JENCKS, in
)
his official capacity; JOHN
)
DOES 1-10; JANE DOES 1-10;
)
DOE PARTNERSHIPS 1-10; DOE
)
CORPORATIONS 1-10; DOE
ENTITIES 2-10; and DOE
)
GOVERNMENTAL UNITS 1-10,
)
)
Defendants.
)
_____________________________ )

Civ. No. 11-00414 SOM-KJM

ORDER ADDRESSING EVIDENTIARY
ISSUES AND SCHEDULING MATTERS

ORDER ADDRESSING EVIDENTIARY ISSUES AND SCHEDULING MATTERS
This order addresses four matters.
First, the court now reconsiders its prior ruling
denying the State’s Motion in Limine No. 8 to Exclude Evidence

and Testimony Concerning Consequential and Contractual Damages.
ECF 302.

The court grants that motion in part, ruling that any

evidence of DW Aina Le‘a’s failure to make payments to Plaintiff
under a Purchase & Sale Agreement (PSA) is excluded if offered
to establish damages for which the State is required to pay just
compensation.
The court is now persuaded that the reference to
“lawful” governmental action in Omnia Commercial Co. v. United
States, 261 U.S. 502, 510 (1923), is not a basis for allowing
such evidence in this case with respect to just compensation.
In coming to that conclusion, the court relies on, among other
cases, Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 543 (2005)
(stating that an “inquiry” into a “regulation’s underlying
validity” “is logically prior to and distinct from the question
whether a regulation effects a taking”); United States v. 50
Acres of Land, 469 U.S. 24, 33 (1984) (stating without
qualification that “the Fifth Amendment does not require any
award for consequential damages arising from a condemnation”);
United States v. General Motors Corp., 323 U.S. 373, 379 (1945)
(similar); and Yuba Natural Resources, Inc. v. United States,
904 F.2d 1577, 1581-82 (Fed. Cir. 1990) (similar).

Notably,

when the Supreme Court in United States v. Bodcaw Co., 440 U.S.
202, 204 (1979), recognized the availability of attorney’s fees
incurred as a consequence of a federal condemnation action
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ultimately dismissed as unauthorized, the Court described the
availability of a fee award as “a matter of legislative grace
rather than constitutional command.”

Bodcaw illustrates that

the unavailability of consequential damages as an element of the
just compensation required by the Constitution does not change
when the government’s action is “unlawful” or “unauthorized.”
In this case, no legislative provision has been
advanced providing for the contractual damages allegedly
suffered by Plaintiff.

As for recovery in the form of just

compensation under the Takings Clause, because the PSA itself
was not taken, but was only, allegedly, the subject matter of
that contract, any amounts owed to Plaintiff under the PSA
constitute nonrecoverable consequential damages.

See, e.g.,

Kaiser Dev. Co. v. City & Cty. of Honolulu, 649 F. Supp. 926,
934 (D. Haw. 1986) (“In order for there to be a taking of the
contract itself, the government must acquire the obligation or
the right to enforce it. [If the] government ha[s] taken the
subject matter of the contract . . . the plaintiff ha[s] merely
suffered a consequential loss . . . .” (citing Omnia Commercial
Co., 261 U.S. at 510-11)).

Evidence of nonpayment by DW Aina

Le‘a to Plaintiff under the PSA is accordingly excluded with
respect to establishing the amount, if any, of just compensation
due to Plaintiff.

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However, this ruling should not be read as excluding
evidence of contractual terms, or nonpayment thereunder, to the
extent such evidence is offered to prove that a taking occurred
(i.e., to show takings “liability”).

Thus, for example, if

Plaintiff seeks to offer such evidence as going to the Penn
Central factor concerning interference with investment-backed
expectations, this ruling is not intended to prohibit that.

See

Guggenheim v. City of Goleta, 638 F.3d 1111, 1120 (9th Cir.
2010) (explaining that “investment-backed expectations” under
the Penn Central analysis include expectations that are
“probable enough materially to affect the price” paid for an
asset).
Second, the court observes that, in a footnote, the
State appears to be asking the court to revisit its ruling
granting in part and denying in part State’s Motion in Limine
No. 1 to Exclude Argument and Evidence as to Alleged Due Process
and Equal Protection Violations.

ECF 304, PageID # 6,488 n.3.

The State correctly notes that this court mistakenly identified
Sherman v. Town of Chester, 752 F.3d 554 (2d Cir. 2014), as a
Ninth Circuit case.

The court here acknowledges that Sherman is

a Second Circuit case.

However, to the extent the State asks

for more than a citation correction, the court denies the
State’s request.

Any such request is an untimely

reconsideration motion buried in a footnote in a memorandum that
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was limited to a separate issue.

It would be patently unfair to

Plaintiff to grant such an untimely, improperly made, and
footnoted request.
Moreover, this court continues to view evidence of the
“character of the governmental action” under Penn Central as
including evidence that Plaintiff was singled out or treated
unusually.

Although the Ninth Circuit has not expressly

recognized this as clearly as the Second Circuit did in Sherman,
this court does not read Ninth Circuit precedent as declaring
that evidence of unfair or unusual government conduct is
irrelevant to “character” analysis.

Guggenheim, cited by the

State, states that whether governmental action is tantamount to
a physical invasion of property is a relevant part of
“character” analysis, but nowhere states that this is the only
relevant consideration.

See 638 F.3d at 1121.

Several other Ninth Circuit cases are consistent with
the Second Circuit’s broader understanding of the “character”
analysis and indicate that this analysis may relate to such
matters as whether other property owners faced similar actions,
whether regulatory actions were just and fair or out of
character for the affected industry or profession, or whether an
action singled out a particular person.

See MHC Fin. Ltd.

P’ship v. City of San Rafael, 714 F.3d 1118, 1128 (9th Cir.
2013); McClung v. City of Sumner, 548 F.3d 1219, 1227 (9th Cir.
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2008), abrogated on other grounds, Koontz v. St. Johns River
Water Mgmt. Dist., 570 U.S, 595 (2013); Wash. Legal Found. v.
Legal Found. of Wash., 271 F.3d 835, 861 (9th Cir. 2001), aff'd
on other grounds sub nom. Brown v. Legal Found. of Wash., 538
U.S. 216 (2003); Quarty v. United States, 170 F.3d 961, 969 (9th
Cir. 1999).
Third, this court has received Plaintiff’s
reconsideration motion with respect to the order excluding
expert reports.

ECF 306.

This reconsideration motion is

untimely, as the underlying order that Plaintiff seeks to have
this court reconsider was an oral order issued on January 8,
2018.

ECF 301.

Any reconsideration motion was therefore due no

later than January 22, 2018.

The court nevertheless invites a

response from the State, which may include argument as to
untimeliness, no later than February 9, 2018.

An optional reply

may be filed by Plaintiff no later than February 13, 2018.

The

court will rule without a hearing.
Fourth, the court informs the parties that it now
appears likely that trial in this case will proceed as scheduled
on March 13, 2018.

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IT IS SO ORDERED.
DATED: Honolulu, Hawaii, February 2, 2018.

/s/ Susan Oki Mollway
Susan Oki Mollway
United States District Judge
Bridge Aina Le‘a, LLC v. Hawaii Land Use Comm’n et al., Civ. No.
11-00414 SOM-KJM; ORDER ADDRESSING EVIDENTIARY ISSUES AND
SCHEDULING MATTERS.

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