Top NC court reverses lower court’s rulings in two Map Act disputes

The North Carolina Supreme Court has overturned two recent lower-court rulings in cases involving the state’s now-repealed Map Act. The state Department of Transportation had warned earlier this year that the cases could lead to payments “multiple times higher” than taxpayers have faced in previous Map Act disputes.

The 1987 Map Act allowed DOT to restrict development on private property designated for future state highway corridors. Some properties faced restrictions for more than two decades. The General Assembly repealed the act after the state Supreme Court declared it unconstitutional in a 2016 case known as Kirby. A later case known as Chapell clarified Kirby’s findings.

In the Wake County case Mata v. North Carolina Department of Transportation, a unanimous state Supreme Court agreed Friday that Map Act restrictions amount to an “indefinite” taking of property rights, as opposed to a “temporary” taking. The difference could have a major impact on the amount of money a property owner could collect from DOT in a Map Act lawsuit.

The decision reversed the state Appeals Court’s ruling that the General Assembly’s decision to repeal the Map Act transformed the taking from “indefinite” to “temporary.”

“We hold that Map Act corridor recordings effectuate indefinite takings of fundamental property rights at the moment of recording, and subsequent legislative rescission does not retroactively transform an indefinite taking into a temporary one for purposes of calculating just compensation,” Justice Anita Earls wrote for the court. “The proper measure of damages is the difference between the fair market value of the property immediately before and immediately after the corridor map recording, considering all pertinent factors including the indefinite nature of the restrictions and any effect of reduced ad valorem taxes.”

The Supreme Court’s decision limits the amount of money plaintiffs Elizabeth Mata and the Mata Family LLC can collect for the restriction of their property rights on a nearly 10-acre Wake County property from 1996 to 2016. The property had been targeted for Interstate 540.

“[T]he appropriate measure of damages should be the fair market value of the Mata Property immediately before and after the taking plus the requisite award of interest,” Earls wrote.

A concurring opinion from Justice Richard Dietz and supported by Justice Phil Berger Jr. argued that Appeals Court judges “were grappling with something that we simply ignore.”

Under the Map Act, the DOT blocked property owners from improving, developing, or subdividing their property. Courts have described this procedure as removing some “sticks” from the “bundle of sticks” that constitute property rights.

“But many years after that indefinite taking, the State did something unusual: it changed its mind and gave all those sticks back,” Dietz wrote. “After that, the entire bundle of sticks, in fee simple absolute, once again belonged to Mata.”

“I think the Court of Appeals and the trial court in this case (and the many companion cases) were trying to make sense of the implications of that,” he added. “They were reckoning with how an ‘indefinite’ Map Act taking interacts with a future direct condemnation proceeding. After all, under this Court’s precedent, the State needs to pay just compensation for any taking based on the fair market value of the bundle of sticks the landowner possesses at the time of the taking. After the Map Act rescission and repeal, that bundle of sticks includes all the ones the State gave back.”

“This Court has decided there is no need to ponder this issue today,” Dietz wrote. “I respect that. But I think we should acknowledge that the lower courts were not simply ignoring our precedent — they were trying to wrap their minds around the ‘double payment’ that will result from a strict adherence to Kirby and Chappell. They were trying to assess whether that was truly what our precedent intended. We now know that it was.”

In a separate case, Sanders v. Department of Transportation, a unanimous state Supreme Court overturned the Appeals Court’s decision in a Map Act dispute involving property targeted for Fayetteville’s Outer Loop.

DOT originally included nearly 93 acres of plaintiff William Sanders’ property in a 1992 corridor map. Later map filings covered other pieces of Sanders’ property. When DOT eventually condemned much of the property for the highway project, the department paid $15.8 million to Sanders. Some 28 acres of property remained restricted until the legislature repealed the Map Act.

Sanders sued DOT in 2018 for Map Act damages.

“We must decide whether plaintiff abandoned his right to seek damages for the Map Act restrictions on his land by not raising the issue in a condemnation action instituted by NCDOT after those restrictions went into effect,” Justice Trey Allen wrote. “Because we hold that state law required plaintiff to raise the Map Act restrictions in NCDOT’s condemnation action affecting the same property, we reverse the judgment of the Court of Appeals allowing plaintiff to pursue damages for inverse condemnation.”

The Supreme Court heard oral arguments in both cases on Sept. 16.

The John Locke Foundation, which oversees Carolina Journal, submitted friend-of-the-court briefs supporting property owners in the Kirby and Chappell cases.

“Top NC court reverses lower court’s rulings in two Map Act disputes” was originally published on www.carolinajournal.com.