Amicus Curiae Brief — Mobil Oil Corp. v. Board of Trustees of the Internal Improvement Trust Fund of Florida

[~ Supreme Court, U.S,

| FILED

ir |

A | JAN 6 1987

JOSEPH F. SPANIOL, JR.

CLERK

No. 86-823

In THE

Suprene Court of the Hnited States

OcTOBER TERM, 1986

Mosit O1 CoRPoRATION,

Petitioner,

v.

BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT

Trust FUND OF THE STATE OF FLORIDA,

Respondent.

BRIEF OF AMICUS CURIAE,

FLORIDA LAND TITLE ASSOCIATION, INC.,

IN SUPPORT OF PETITION FOR A WRIT

OF CERTIORARI TO THE SUPREME

COURT OF FLORIDA

RICHARD A. EPSTEIN

University of Chicago

School of Law

1111 East 60th Street

Chicago, Illinois 60637

(312) 962-9563

WILLIAM H. Apams, III

MAHONEY ADAMS MILAM

SURFACE & GRIMSLEY, P.A.

Post Office Box 4099

Jacksonville, Florida 32201

(904) 354-1100

Attorneys for Amicus Curiae

Florida Land Title

Association, Inc.

Muwee Pees J acksorvirce PloslDA 904) 296-0500

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TABLE OF CONTENTS

age

eee er CO ce cn pan trots eee ne eee i

ee PIR ore a ce oe ee awe eee il, il

Amicus Curiae’s Interest in This Case ................. l

Tne Comvoyancing Gyatem .............0. cesses l

Recording Laws and Land Records ................ 2

Marketable Record Title Laws .................... 3

The Role of Title Insurance ...................... 3

ee ee ee eee ete See 4

Threat to Industry Survival ...................... 6

PI eR ee er eee Oe ee ee ee 6

i I et ate aa een wie 6

1. The Florida Marketable Record Title Act .... 7

2. Decisions of Florida Lower Courts .......... s

3. Decision of the Florida Supreme Court ...... 8

B. The Fifth and Fourteenth Amendments to the

United States Constitution Apply to State

SE ey eee tr er ea g

C. The Decision of the Florida Supreme Court

has Taken Petitioner’s Property by

Overruling or Ignoring the Applicable

Precedents Under Which Its Rights

Had Become Fully Vested ...................0.. 13

1. The general principles of taking law do not

allow the state to place an owner's vested

rights at ;isk without any compensation

or police power justification ................. 13

2. The Florida Supreme Court's reinterpretation

of the Marketable Record Title Act amounts

to an unconstitutional taking of vested

MURINE occ Se rane ecce chia hs rok eek us 14

ei | Se eae Cer een ry ery CPT T ee 19

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TABLE OF CITATIONS

Page

Board of Trustees of the Internal Improvement

Trust Fund v. Mobil Oil Corporation,

455 So.2d 412 (Fla. 2d DCA 1984) ................. 8

Coastal Petroleum Co. v. American Cyanamid Co.,

454 So.2d 6 (Fla. 2d DCA, 1984) ................... 8

Coastal Petroleum Co. v. American Cyanamid Co.,

4038 So.28 33D (Fin. 19GB) i665 e eee 14, 15

Dartmouth College v. Woodward,

17 US. (4 Whee.) GES (AGTR) oc ccc ee eeeeee 13

Fletcher v. Peck,

16 U.S. (6 Cranch.) G7 (IBIG) | co ckkscavcns use eee 13

Hughes v. Washington,

Bae UB. BOO (IOS7) <.. .osancecncuueeuceeae 10, 11, 12, 14

Mobil Oil Corporation v. Coastal Petroleum Co.,

2 Fla. Supp. 2d 12 (Fla. 10th Cir. 1982) .............. 2,8

Muhlker v. Harlem Railroad Co.,

167 US. S86 (IGOR : ..kccaalic. see eee 9,14

N.Y. Times v. Sullivan,

S706 U.S. BG (IBS) oon os kcckecaneeeeeee eee 12

Odom v. Deltona Corp.,

S41 So.38 OFF (Pek. B90G) i oes 2, 15, 16, 17, 18

Penn Central Transportation Co. v. New York City,

G8 US. 106 C8GTS) 6 kc hee ee 14

Pennsylvania Coal v. Mahon,

SO Cee. ee Chee 66 KO ee eee 14

Robinson v. Ariyoshi,

753 F.2d 1468 (9th Cir. 1985)

vacated and remanded on other grounds,

__U.S. —, 106 S.Ct. $269 (1966) .......... 10, 11, 12, 14

ill

Page

FLORIDA STATUTES

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ED 7, 15

Ey a 8

LAW REVIEW ARTICLES

Barnett, Marketable Title Acts—

Panacea or Pandemonium,

ES ES 0 ye 3

Danzon, Tort Reform and the Role of

Government in Private Insurance Markets,

OL | 5

Reichman, Toward a Unified Concept

of Servitudes,

ee EO PETE (E9G2) cic ke ec eves 1

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1

AMICUS CURIAE’S INTEREST IN THIS CASE

Florida Land Title Association, Inc. (“FLTA”) is a nonprofit

membership corporation composed of more than 350 abstrac-

ters, title insurance companies and title insurance agents doing

business in Florida. The services rendered by FLTA members

are designed to facilitate title transactions and assure real estate

transferees that their interests will be secure from third party

claims.

FLTA has an interest in this case because of the drastic

adverse effect the Florida Supreme Court’s decision will have

on (1) FLTA’s members and the title industry generally, (2) own-

ers of two-thirds of all privately held real property in the state

of Florida, (3) the continued viability of the conveyancing sys-

tem, and (4) the marketability and market value of all real

property.

The decision below ravages the security of public deeds and

the rules of law upon which the structure of private conveyanc-

ing depends. If aliowed to stand, it will throw Florida convey-

ancing into massive turmoil and necessarily subject title

insurance companies to incessant claims upon their resources

and possible bankruptcy—and this by exposing them to the

very kind of risks against which Florida’s marketable record

title act had promised them protection.

The Conveyancing System

The system of conveyancing in the United States efficiently

protects transferees of interests in real property against losses

from title defects. It is so effective that litigation involving sub-

stantive legal issues relating to title has become rare.'

' Reichman, Toward a Unified Concept of Servitudes, 55 S. Cal. L. Rev.

1177 (1982).

2

Although the system producing this dramatic result is com-

plex in detail, the essential components are (1) recording laws,

(2) public land records implementing those laws, (3) curative

statutes, (4) a tradition of sound and unambiguous property

laws on which sellers and purchasers have been able to rely, and

(5) the specialized services provided by title insurance companies.

Recording Laws and Land Records

Recording laws cut off most interests in real property that

are not evidenced by or inferable from recorded instruments.

Under these laws, a system of public land records has evolved

that permits determining with a high degree of accuracy whether

the title of a transferee will be free from third party claims.

At common law, the title history of any parcel of land had

to be traced to its origin, but this system proved manifestly

unworkable because few titles can be traced that far. Old breaks

in the chain are common. Without recording and curative stat-

utes any break in a chain of title, however minute, could cast

a perpetual shadow over all future land transfers. Breaks become

harder to cure as time passes. Possible claimants who might

sign quit claims become impossible to locate, the physical con-

dition of the property changes,” memories of witnesses fade, and

other available evidence decays. Curative statutes eliminate most

* This Court is in a poor posture to evaluate the work of those sur-

veyors of many decades past. It can only be accepted that they did

their job as instructed and recorded what they found then, which

may or may not be what appears now. Fre: *. »ater lakes and ponds

do change rather significantly because of botn natural and artificial

alterations in the areas involved. It is to be observed that. govern-

mental conveyances were made in re!:«nce on them and the grantees

of such conveyances had the right to assume the U.S. Government

and the Trustees were acting lawfully.

Mobil Oil Corporation v. Coastal Petroleum Company, 2 Fla. Supp. 2d 12

(Fla. 10th Cir. 1982), citing, Odom v. Deltona Corp., 341 So.2d 977, 984

(Fla. 1977}.

3

of these risks and the complex and pointless title litigation that

would be generated in their absence.

Marketable Record Title Laws

One key to an efficient system of conveyancing is the mar-

ketable record title act. The basis of marketable title acts is

described by Professor Barnett* as follows:

Marketable title acts are intended to operate in conjunction

with, rather than as a substitute for, the recording Acts.

They seek to extinguish old title defects automatically with |

the passage of time. The Acts provide that if a person has

an unbroken chain of title from the present back to his

“root of title,” then he has the sort of title in favor of which

their extinguishment feature will operate. His “root of title”

is the most recent transaction in his chain of title that has

been of record at least forty years.*

The effectiveness of marketable record title acts depends

on the scope of their coverage. In a state like Florida, where

huge portions of the land are traced to sovereign grants, they

would be of no effect whatsoever if they did not cut off govern-

mental as well as private interests. It is scarcely of any comfort

to a prospective buyer that the challenger to his or her title is

a well-financed public official instead of an ordinary private

party.

The Role of Title Insurance

A sound system of conveyancing requires more than well

conceived recordation and marketable record title acts. It also

depends upon the expertise of the private parties who operate

3 Barnett, Marketable Titie Acts—Panacea or Pandemonium, 53 Cornell

L. Rev. 45, 52-53 (1967).

* The 40-year period is most common and is the one used for illustrative

purposes throughout this article. |Florida has a 30-year period, Fla. Stat.

§ 712.02 (1985)] (Footnote in original)

4

the system. The mission of title insurance companies and allied

firms is to provide the services needed to ascertain the state of

titles from the public records. The key to understanding the

industry is the recognition that insurance is sold primarily to °

bond the services the industry provides. The individual buyer

or seller knows little about the intricacies of title examination,

and cares less. What he or she desires is an assurance that title

work done by professionals is correctly done. As private owners

cannot inspect or supervise the work themselves, title insurance

companies provide them with a guarantee in the form of insur-

ance about the state of title. Title companies provide information

as to clouds on titles, which can be cured before a transaction

goes forward. Title companies bond the effectiveness of their

services by agreeing to pay money if a further defect in title

emerges.

The Instant Case

The system of title insurance, the level of premiums col-

lected, and the services title companies provide, depend totally

upon the integrity of the recordation system and the marketable

record title acts. The decision of the Florida Supreme Court, if

allowed to stand, will throw the entire mechanism into total

disarray. Under it, the state will be able to challenge its own

conveyances made 100 years ago or more because it will no

longer be bound either by its own classification system or by

deeds made by Trustees of its Internal Improvement Fund. The

confusion will be statewide. More than 20 million acres of val-

uable land were sold by the state as swamp and overflow lands

in the years between 1850 and 1918. The state’s own Depart- ;

ment of Natural Resources estimates that 11,900 miles of river

and 3736 lakes are subject to these belated state sovereignty

claims. Yet the evidence of navigability on which every single

claim rests is not ascertainable by metes and bounds. Quite the

5

opposite, it depends on one hundred year old history, on the

physical condition of the property in 1845 when Florida came

into the Union. The evidence needed to adjudicate these claims

decayed at a rapid rate, spurred on by each flood and storm,

and by each expansion or contraction of river course or channel.

The administrative costs of redetermining the condition of any

particular parcel 140 years ago will be high, and the reliability

of any such determination is certain to be low. The decision

below maximizes uncertainty for uncertainty’s sake.

Virtually all of these cases involve land for which title insur-

ance has been issued, so that FLTA members will be required

to foot a large part of the bill for a set of risks from which they

(and their insureds) had been promised protection by the MRTA.*

The state of Florida estimates that it will spend as much as

$900 million dollars to establish its claims if only 25 percent

of the affected landowners decided to mount a defense. That

money will have to be raised by taxation, much of it from the

same individuals who will be forced to spend (as a first approx-

imation) $900 million dollars of their own money to defend these

claims.® Much of this money will come from title insurance

companies, who may well be saddled with extensive indemnity

payments in cases they lose.

Nor do matters rest here, for the incentive effects of the

decision must be taken into account as well. Until these matters

‘It is well understood today that no system of insurance can function in

the face of common mode failures, which make it impossible for insurers

to diversify the risks of their policyholders. See Danzon, Tort Reform and

the Role of Government in Private Insurance Markets, 13 J. Legal Stud.

517, 534-539 (1984). Here there is a high correlation of insurer risks

because all of these lawsuits stem from the same retroactive reinterpre-

tation of the state’s marketable title acts.

* The likely estimate would be more if only because each individual owner

would have high start up costs because of the need to engage separate

counsel.

6

of title are resolved on a case by case basis, the sale of real

estate will come to a grinding halt as buyers and sellers find

themselves unable to agree on how to allocate the ever-present

risk of government suit. Trade and commerce will! be paralyzed

while the state of Florida continues its quixotic effort to right

wrongs which in all probability never occurred. In the process,

these claims will threaten the lifeblood of commerce and the

financial viability of the title industry. The industry's only crime

has been to rely on the state’s promise that MRTA meant what

it said. No company has charged a penny in premiums to cover

the risk of the state's illegally reneging on its own conveyances

Threat to Industry Survival

It is not an overstatement to suggest that the Florida Supreme

Court's dramatic reversal of prior decisions promising security

of titles threatens the economic survival of title insurance com-

panies in Florida whose aggregate reserves and capital are far

less than the amount Florida expects to spend in prosecuting

claims against persons title companies have insured. The deci-

sion of the court has created a madcap situation in which every-

one but lawyers and bureaucrats will lose. The time to set the

matter aright is before more wasteful and destructive litigation

takes place. That time is now.

ARGUMENT

A. Introduction

Petitioner's brief discusses the three drastic changes in state

law wrought by the decision of the Florida Supreme Court.

The changes made by the decision (1) permit the state to reclassify land

conveyed over 100 years ago as swamp and overflow land, (2) abrogate the

doctrine of estoppel which was formerly available to prevent the state from

reneging on its deeds, and (3) re-interpret the MRTA as never having

applied to sovereignty land

Petitioner has focused primarily on the court's refusal to rec

ognize the conclusiveness of the classification decisions made by

the Secretary of the Interior and the State of Florida when the

land was originally sold. We agree with petitioner that, by open-

ing the door to reclassification, the Florida court has “taken”

petitioner's property. But we focus our argument primarily on

the court’s cavalier abrogation of the security of titles that the

state guaranteed through the MRTA, as it had been construed

in earlier Florida Supreme Court decisions

1. The Florida Marketable Record Title Act

One question before the Florida Court was whether the

MRTA, as enacted in 1963", applied to state grants. The issue

arose when the Trustees contended that, 100 years ago when

most of these deeds were made, they had authority to convey

only Swamp Lands but were then without power to convey sov-

ereignty lands. Ifthe MRTA applied, the Trustees are foreclosed

from attacking the validity of their prior deeds on any ground

not specifically reserved in the deeds themselves. If MRTA did

not apply, Florida will be able to attack a// previous grants made

by the Trustees

Section 712.02 of the MRTA provides-that any person whose

claim of title is based on a title transaction that has been of

record over thirty years has a marketable record title free of

all but enumerated claims. Section 712.04 extinguishes all claims

not specifically excepted (including “governmental” claims) that

pre-date the thirty-vear period. One exception is made for inter

ests of the state or federal government “reserved” in the patent

or deed by which the state or federal government parted with

title

Fla. Stat... Ch. 712 (1963

8

This case involves state claims to interests that were not

reserved in the deeds by which the state parted with title.

In 1978, the MRTA was amended to except for the first time

the state's claim of title to lands beneath navigable waters that

the state had acquired when it was admitted to the Union.” The

Trustees have asserted that the lands at issue in this case are

sovereignty lands and that the state's claim was not extin-

guished by the MRTA.

2. Decisions of Florida Lower Courts

The trial court" and the district court of appeal'' deter-

mined, as a matter of law, that the lands in this case could not

be regarded as sovereignt y lands; consequently, the 1978 exemp-

tion could not apply. They went on to hold that, even if the lands

were sovereignty lands, the 1978 sovereignty lands exemption

could not be retroactive because a retroactive application would

unconstitutionally deprive property owners of rights that vested

when the MRTA became effective in 1963.' Thus, the lower

courts concluded that, even if the lands were sovereignty lands,

the MRTA extinguished the state's claim

3. Decision of the Florida Supreme Court

The Florida Supreme Court reversed the lower court deci-

sions and held that the MRTA never applied to sovereignty

lands. In a strangely casual opinion, over a strong dissent. the

majority sub silentio found that the MRTA. as originally enacted.

‘See 1978 Fla. Laws, Ch. 78-288

Mobil Oil Corporation + Coastal Petroleum Co.. 2 Fla Supp. 2d 12

(Fla. 10th Cir. 1982)

Coastal Petroleum Co. v. American Cyanamid Co., 454 So.2d 6 (Fla

2d DCA 1984) and Board of Trustees of the Internal Improvement Trust

Fund v. Mobil Oil Corporation. 455 So 2d 412 ‘Fla. 2d DCA 1984

See 454 So.2d at 9

9

did not apply to state grants. In arriving at this result, the

court overruled its own precedents, changed its interpretation

of Florida Statutes, and. by judicial fiat, took private property

without just compensation in violation of the Fifth and Four-

teenth Amendments to the United States Constitution.

B. The Fifth and Fourteenth Amendments to the United

States Constitution Apply to State Judicial Acts

This case raises the fundamental question of whether, even

though a state is prevented by the Constitution from taking

private property by action of its legislature or executive, it may

achieve the same result, free of constitutional restraint, by act-

ing through its courts. The Fifth Amendment command “nor

shall private property be taken for public use, without just

compensation” has long been held applicable to states through

the Fourteenth Amendment. On its face, the Fourteenth Amend-

ment imposes a general prohibition, binding on all branches of

state government, not only the executive and the legislative.

What scant precedents exist support the basic proposition

that any state judicial action which takes private property is

subject to the same constitutional limitations that apply to other

state agencies.

An early application of the taking and due process clauses

to judicial action is in Muhlker v. Harlem Railroad Co., 197

U.S. 544 (1905). Plaintiff in that case claimed an easement of

light and air over a public street under an 1827 deed. Prior

decisions of the New York Court of Appeals had held that similar

deeds prevented railroads from building their tracks above grade

without paying compensation to holders of the easements. When

the New York court tried to distinguish its own precedents, this

Court examined the soundness of the court's reasoning. Finding

10

that the purported grounds of distinction were frivolous, it inter-

vened and held that vested rights are explicitly protected from

judicial as well as from legislative confiscation.

The same logic underlies Justice Stewart's concurrence in

Hughes v. Washington, 389 U.S. 290 (1967), where a private

landowner brought an action to establish his ownership of accre-

tions on oceanfront property. The Washington Supreme Court,

holding that state law controlled, found for the state. Eight mem-

bers of the Court resolved the issue in favor of the private owner

on the ground that federal law governed. Only Justice Stewart's

concurrence addressed the issue which this case puts squarely

before the Court. In Justice Stewart's view, even if state law did

apply, the Washington court's prior judicial decision had vested

title in the landowner exactly as a statute would have done.

Justice Stewart observed that the state could not abrogate the

landowner'’s title by judicial action:

(T|he Constitution measures a taking of property not by

what a State says, or by what it intends, but by what it

does. Although the State in this case made no attempt to

take the accreted lands by eminent domain, it achieved the

same result by effecting a retroactive transformation of

private into public property—without paying for the priv-

ilege of doing so. Because the Due Process Clause of the

Fourteenth Amendment forbids such confiscation by a State,

no less through its courts than through its legislature, and

less when a taking is unintended than when it is deliberate,

I join in reversing the judgment.

Id. at 297-298.

Justice Stewart's concurrence in Hughes was followed by

the Ninth Circuit decision, Robinson v. Ariyoshi, 753 F.2d 1468

(9th Cir. 1985), vacated and remanded on other grounds,

____ U.S. ___., 106 S.Ct. 3269 (1986). Robinson involved own-

ership of water rights to certain “normal daily surplus water”

Sr

ll

which had been obtained under a land grant. In the course of

litigation during the 1920s and 1930s, Robinson’s title to the

water rights had been established by authoritative decisions of

the Hawaii courts. Long after those decisions, the Hawaii Supreme

Court sua sponte overruled all prior water law cases, adopted

the English view of riparian rights and held that there was no

category of normal daily surplus water of the kind Robinson

claimed. The Ninth Circuit was faced with the question of whether

the state could validly revoke Robinson's water rights by a judi-

cial decision that negated the entire general property rights

regime under which his rights had been fully and lawfully vested.

The Ninth Circuit found the Hawaii court's decision constitu-

tionally repugnant:

The state conceded at oral argument that the Four-

teenth Amendment would require it to pay just compen-

sation if it attempted to take vested property rights. The

substantive question, therefore, is whether the state can

declare, by court decision, that the water rights in this case

have not vested. The short answer is no.

Id. at 1473.

The long answer is every bit as instructive.

The parties concede that the State of Hawaii has the

sovereign power to change its laws from time to time as its

legislature may see fit, and may, by changing its law, rad-

ically change the definitions of property rights and the man-

ner in which property rights can be controlled or transferred.

The state may also change its laws by judicial decision

as well as by legislative action. Insofar as judicial changes

in the law operate prospectively to affect property rights

vesting after the law is changed, no specific federal question

is preseated by the state's choice of implement in changing

state law. See Hughes v. Washington. 389 U.S. 290, 295

(1967) (Stewart J. concurring).

We assume, therefore, for the purposes of this case, that

the Supreme Court of Hawaii was acting well within its

12

judicial power under the state constitution when it over-

ruled earlier cases and declared for the first time, after

more than a century of a different law, that the common

law doctrine of riparian ownership was the law of Hawaii.

This declaration of a change in the water law of Hawaii

may be effective with respect to the real property rights

created in Hawaii after the McBryde I decision became

final. New law, however, cannot divest rights that were vested

before the court announced the new law. See Hughes, 389

U.S. 295-98.

Id. at 1474."

As a matter of constitutional principle, the law must be as

Justice Stewart and the Ninth Circuit have described it. Con-

sider the law of adverse possession. Suppose that an authori-

tative judicial decision has established that an adverse possessor

can obtain perfect title even when he knows that his own claim

is made in bad faith. A bona fide purchaser takes title in reliance

on the rule. The highest state court wishes to change that rule

to provide that only good faith possessors can perfect title. This

leaves the bona fide purchaser in the position of having to litigate

the issue of whether his predecessor acted in good faith. The

court may surely change the rule prospectively. But, consistent

with the requirements of the due process and just compensation

clauses, it cannot do so retroactively where the effect would be

to plunge into uncertainty the very titles that it own laws had

vested.'*

'' See also N.Y. Times v. Sullivan, 376 U.S. 254 (1964) (First and Four-

teenth Amendments limit the state’s common law of defamation).

'* We recognize that the State of Florida could insert a term in its grants

reserving the right to challenge the title of the grantee or his assignee.

even in perpetuity. Yet there is a tremendous functional difference between

the prospective and retroactive adoption of this practice. In the prospective

case, powerful economic constraints would discipline state practice. It would

have to find a buyer, willing to pay a decent price, despite so onerous a

constraint. But this economic restraint on public behavior would be wholly

inoperative if Florida could repudiate its grants after the deeds are signed,

sealed and delivered. If set free from constitutional constraint, Florida

would no longer need to fear the price of its own political decisions. It could

impose the costs upon innocent grantees by conduct which is every bit as

13

This case presents this stark issue of coastitutional prin-

ciple in relation to a judicial abrogation of titles vested under

the MRTA. To date, an unanswerable concurrence by Justice

Stewart and an unanimous decision by the Ninth Circuit are

the only judicial opinions which support the indubitable prop-

osition that the state cannot so alter its general rules of property

law to defeat rights vested under a prior rule. This case offers

the Court the opportunity to remove any lingering doubts on

what should be an incontrovertible proposition of constitutional

law. It remains only to demonstrate that Florida has overruled

its decisive precedents holding that MRTA does apply to state

grants.

C. The Decision of the Florida Supreme Court has Taken

Petitioner's Property by Overruling or Ignoring the

Applicable Precedents Under Which Its Rights Had

Become Fully Vested.

1. The general principles of taking law do not allow the

state to place an owner's vested rights at risk without

any compensation or police power justification.

This Court has stressed repeatedly that it has not been

able “to develop any ‘set formula’ for determining when com-

pensation should be paid,” and has relied on essentially “ad hoc

outrageous as the behavior of the State of Georgia, condemned in Fletcher

v. Peck, 10 U.S. (6 Cranch.) 87 (1810) (holding under the contracts clause

that the legislature without compensation could not rescind its prior grants

after the subject property had been conveyed to third parties who took in

good faith) and of New Hampshire, condemned in Dartmouth College v.

Woodward, 17 U.S. (4 Wheat.) 518 (1819) (contracts clause prohibits state

from revoking or modifying its charter without compensation). While both

Dartmouth College and Fletcher were decided under the contracts clause,

the principles involved in those cases are identical to those applicable here.

If a state can acquire vested rights by demand, it diminishes the rights

of the individuals whom it oppresses and destroys the productive capacities

of our people generally. Land grabs offer the paramount abuse against

which the taking and due process clause guards. The need for vigilence

does not cease because the source of oppression is state judicial action.

14

factual inquiries” to resolve this difficult issue. Penn Central

Transportation Co. v. New York City, 438 U.S. 104, 124 (1978).

In essence, modern taking doctrine has been a delicate coun-

terpoint in which the degree of restriction imposed on an owner's

rights is balanced against the strength of the justification the

state offers for its action. No such need for balancing infects

this case which lies at the extreme end of the legal spectrum:

if Florida and Coastal prevail, petitioner’s entire interest is

destroyed. This case does not involve any comprehensive scheme

of social or environmental control, such as the historical land-

mark designation statutes upheld in Penn Central. Petitioner

has not contested the state’s right to impose necessary regu-

lations to protect its wetlands or the environment. Quite the

contrary, all that is at stake in this case is ownership of mineral

interests of the very sort that received emphatic constitutional

protection in Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922).

What Florida and Coastal seek is money'® for minerals previ-

ously mined.

2. The Florida Supreme Court’s reinterpretation of the

Marketable Record Title Act amounts to an unconsti-

tutional taking of vested property rights.

Amicus recognizes that this Court cannot superintend every

detail of state law to determine whether a decision has deprived

litigants of property rights secured by the Constitution. Yet, by

the same token, state courts cannot be subject to constitutional

scrutiny only where, as in Robinson and Hughes (but not

Muhlker), they have expressly admitted to abandoning previous

systems of property rights. A state court that overrules its prior

decision sub silentio should be subject to the same standards of

'° “Contrary to the various suggestions that the present cases pertain to

issues of environmental protection, it should be made known that what

these cases involve is money.” Coastal Petrol. um Co. v. American Cyanamid

Co., 492 So.2d 339, 349 (Fla. 1986) (Boyd, C. J., dissenting).

15

review as courts that have acted openly. There is no reason to

encourage states to obscure the basis of their decisions in order

to immunize their actions from review. This Court can surely

review state decisions for impermissible retroactive takings when

they have no colorable basis in law or in fact.

The most obvious illustration of that principle is here, where

the Florida court has falsely dismissed its own binding prece-

dent as “irrelevant dicta.” The dispositive case is Odom v. Del-

tona Corp., 341 So.2d 977 (Fla. 1976), there the Florida Supreme

Court construed the 1963 MRTA which had been passed in

response to the great uncertainty that existed with respect to

land titles in Florida. MRTA’s provisions expressly applied to

all conveyances, private or governmental.'* In Odom the court

held that “the claims of the Trustees to beds underlying navig-

able waters previously conveyed [were] extinguished by the Act.”

Id. at 989. Here the Florida Supreme Court offered no reason

to distinguish Odom. It characterized Odom in the following

statement:

The ground on which Odom rests is this factual determi-

nation that small lakes and ponds at issue were non-navig-

able, non-sovereignty lands. Unfortunately, even though this

factual determination controlled and resolved the case, we

went on to answer irrelevant arguments put to us by the

parties and in answering one such argument concluded that

MRTA was applicable to sovereignty lands encompassed

within conveyances of swamp and overflowed lands and that

the claims of trustees “to beds underlying navigable waters

previously conveyed are extinguished by the Act.”!”

‘"“|M|arketable record title shall be free and clear of all estates, inter-

ests, claims or charges whatsoever ... held or asserted by a person ...

whether such person is natural or corporate, or is private or governmental

... except any right, title or interest reserved ...” Fla. Stat., 712.04 (1985)

(emphasis added).

'" Coastal Petroleum Co. v. American Cyanamid Co., 492 So.2d 339, 344

(Fla. 1986), citing, 341 So.2d at 989.

16

This passage grossly misstates not only the facts found in

Odom, but also the principles of law the Odom court applied to

those facts.

(1) Facts: The Florida Supreme Court's description of the

facts in Odom is manifestly false. In Odom, the court had taken

the unusual step of reprinting the entire opinion of the trial

court because of its “clarity.” The trial court had granted a

motion for summary judgment against the state because there

was “no genuine issue of fact” 341 So.2d at 349. In this case,

the Florida court writes as though summary judgment had been

awarded because Odom clearly involved lands known to be non-

sovereignty and non-navigable. But in Odom the findings were

diametrically opposite to the facts in the revisionist description

of them contained in the opinion below. The trial court’s Finding

Number 2 notes that the disputed lands were “certain non-

meandered lakes and ponds.” The rival claims of title were then

noted by the trial court as follows:

Deltona claims to own the lakes in question under various

chains of title originating either in U.S. Patents or deeds

of the Trustees of land acquired by the state under the

Swamp and Overflow Lands Grant Act of September 28,

1950 |sic]. The Trustees claim that the lakes were the waters,

beds and shores of navigable water which are held by the

state in trust for the public by virtue of state sovereignty.

Id. at 979.

The entire point of Odom is that the court was able to grant

Deltona its summary judgment without having to resolve the

factual question of whether the lands acquired from the state

were sovereignty or swamp lands. Deltona won either because

it had good title to “#amp land or because MRTA blocked the

state’s claim to retain sovereignty land. Mobil’s position is indis-

tinguishable from Deltona’s. Accordingly, under Odom, the entire

dispute in the instant case should have been resolved on the

nae iil

17

face of the pleadings. Nothing could be clearer. Even the Trust-

ees recognized the factual record that the Florida Supreme Court

later denied: “It is also clear that the Circuit Court in Odom

made no factual determination of the navigability of the lakes

in issue.” (Trustees’ brief, Fla. Sup. Ct., at page 26.)

(2) Law: In Odom, after an extensive review of the rele-

vant authorities, the Florida Supreme Court wrote:

It seems logical to this Court that, when the Legislature

enacts a Marketable Title Act, as found at Chapter 712,

Florida Statutes, clearing any title having been in existence

thirty years or more, the state should conform to the same

standard as it requires of its citizens; the claims of the

Trustees to beds underlying navigable waters previously

conveyed are extinguished by the Act. Stability of titles

expressly requires that when lawfully executed land con-

veyances are made by public officials to private citizens

without reservation of public rights in and to the waters

located thereon, a change of personnel among elected state

officials should not authorize the government to take from

the grantee the rights which have been conveyed previously

without appropriate justification and compensation.

Id. at 989 (emphasis added).

The nature of the court’s decision in this case is revealed,

not only by the court’s disingenuous reasoning, but by the polit-

ical context in which the decision was rendered. The decision

was in fact a belated response to eight years of supplication by

the executive branch of the state government. In 1978, reacting

to the court’s Odom decision, the Governor called a special ses-

sion of the legislature to amend the MRTA in order to exempt

sovereignty lands from its operation. This 1978 episode is in

itself well nigh conclusive evidence that the 1963 legislature

meant what it said: the 1963 Act applies to sovereignty lands.

Why else introduce the 1978 bill at all? Following well settled

Florida precedent, the trial and intermediate appellate courts

uniformly refused to give the 1978 amendment retroactive effect.

18

Political pressures continued to build.'* In the spring of

1986, a concerted movement again developed to have the leg-

islature “declare” that the MRTA had never applied to land

under navigable waters previously conveyed by the state. That

legislation was strenuously opposed on the very ground that the

FLTA urges here: that such an amendment would constitute a

taking of private property for public use without just compen-

sation. The Florida Supreme Court’s decision spared the legis-

lature the necessity of voting at all on this issue. But the fact

that the state acted through its courts rather than its legislature

does not lift the large constitutional cloud that hangs over the

decision. No verbal legerdemain can conceal the gross mis-

reading that the Florida Supreme Court made first of MRTA

and then of its own dispositive precedent in Odom. Its assault

on vested rights cannot be corrected by the political process,

'* A news item in the Florida Times-Union on May 22, 1985, sixteen days

after oral argument before the Florida Supreme Court in the instant case,

explains the situation:

“The state will never abandon these lands” !Governor| Graham said.

“It is time for the Legislature to tell the courts, in no uncertain terms,

that we intend to keep our sovereign lands, that we never gave them

up and that we will not tolerate this abuse of the law.”

Florida Times Union, May 22, 1985.

The following news item appeared in the same paper the day after the

Florida Supreme Court rendered its decision:

The ruling came down just thirty minutes before Senate President,

Harry Johnston, D-West Palm Beach, was to meet some of those groups

to hammer out compromise legislation on MRTA - the compromise in

which the state would have relinquished much of the land which the

court ruling lets the public keep.

"I think we are all extricated from a tough political decision to

make, and I’m very glad they made it for us,” said Johnston who is

running for governor.

He said he doubted even if the Senate compromise would have passed

the House. House leaders were supporting a mors . onservative approach

by Representative Fred Dudley, R-Ft. Myers, that would have left the

land in private hands but codified the state's right to regulate the use

of the waters.

Florida Times Union, May 16, 1986.

19

much less by the Florida Supreme Court. This Court is the only

forum in which this grievous wrong may be redressed.

CONCLUSION

This case demonstrates in sharp and uncompromising form

the need to define the constitutional limits on the power of a

state court to alter and amend its own common law of property

and to give its decisions retroactive effect. Amicus recognizes

that it would be wholly inappropriate to adopt a constitutional

principle that would preclude natural development of the com-

mon law. But this is not that kind of case. Here the Florida court,

by’sheer fiat, has changed the rules of the game in midcourse

for the benefit of the state. By misreading and ignoring its own

unambiguous precedents, the court has retroactively decreed a

wholesale confiscation of longheld vested rights. If it is allowed

to succeed in this effort, other courts will be tempted to follow

in its footsteps. A writ of certiorari should issue so that this

Court can make it clear that constitutional prohibitions against

state confiscation remain firm. The cloud this decision places

on the title to nearly two-thirds of the privately-owned land in

Florida must be lifted.

For the reasons stated, certiorari should be granted to review

the decision of the Florida Supreme Court.

Respectfully submitted.

RICHARD A. EPSTEIN

WILLIAM H. Abas, III

Attorneys for Amicus Curiae

Florida Land Title

Association, Inc.