Posted by: Patricia Salkin | January 10, 2008

Nevada Supreme Court Determines Equitable Considerations Justify Claim for Per Se Taking of Airspace

In a decision providing for equitable application of the law of the case doctrine, the Nevada Supreme Court has invited takings claims on regulations regarding height restrictions on development in airspace zones around the Las Vegas, Nevada airport.  

Landowners initially brought a challenge in 1995 to the adoption of ordinances that placed “transition zone” height restrictions on certain property surrounding McCarran International Airport.  Their eminent domain action, alleging that the restrictions constituted an avigation easement over their property without just compensation, resulted in a substantial jury verdict which was later overturned by the Nevada Supreme Court who concluded that this type of height regulation was not a physical ouster, but rather a regulatory taking that was subject to the takings principles set forth in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978). On remand, the landowners were directed to submit a proposed development plan to the County by January 1, 2006 or otherwise begin to exhaust their administrative remedies.  They sold the property instead in 2005, and then filed the present appeal.   

During the pendency of the current appeal, the Nevada Supreme Court decided the case of McCarran International Airport v. Sisolak, 122 Nev. 645, 137 P.3d 1110, where, in facts similar to this case, the Court concluded that a county “runway approach zone” height restrictions constituted a permanent physical invasion of the landowner’s airspace, and that therefore the inverse condemnation claims were properly analyzed as per se regulatory takings (see, Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)).  Because the regulations constituted a per se takings, there was no need to apply Penn Central and to exhaust administrative remedies.  The landowners asked the Supreme Court in the current litigation to revisit their prior decision in this matter in light of the decision in Sisolak for equitable reasons, and by doing so, to clarify the scope of the “law of the case” doctrine which holds that the law or ruling of a first appeal in a case must be followed in all subsequent proceedings in both the lower court and on any later appeal. 

The Court, in explaining the law of the case doctrine, reiterated that where there are extraordinary circumstances, “…it is not improper for a court to depart from a prior holding if convinced that it is clearly erroneous and would work manifest injustice.” Citing to Arizona v. California, 460 U.S. 605 (1983). The Court said, “we take this opportunity to hold that…when the controlling law of this state is substantively changed during the pendency of a remanded matter at trial or on appeal, courts of this state may apply that change to do substantial justice.”  

Applying the new approach to this case, the Court agreed that the ordinances at issue amount to a per se regulatory takings under Sisolak (there the Court determined that the easements, while not a direct physical invasion, constituted a permanent invasion because the right to fly over the airspace was preserved by the ordinances and expected to continue into the future). Noting that the transition zone regulations at issue in the current case are not as restrictive as those on Sisolak, the Court nonetheless concluded that under that case, the regulations here constitute a per se regulatory taking of the landowner’s airspace. As a result, the landowners were not required to apply for a variance or otherwise exhaust their administrative remedies, and the Court instructed the District Court to enter an order finding the County liable for a per se regulatory taking.  

Tien Fu Hsu v. County of Clark, 2007 WL 4532623 (Nev. 12/27/2007). 

The opinion can also be accessed at: http://www.nvsupremecourt.us/documents/advOpinions/123NevAdvOpNo60.html


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