Opposition Brief — Rowe v. North Carolina Department of Transportation

ree _——

oupreme Court. U.S.

‘err Dp

JAn 17

No. 01-819 2002

In the CLERK

Supreme GCourl of the Anileo Slates-———-~_

—_ ——_

JoE C. ROWE and wife, SHARON B. ROWE and HOWARD L.

PRUITT, JR. and wife, GEORGIA PRUITT,

Petitioners,

NORTH CAROLINA DEPARTMENT OF TRANSPORTATION,

Respondent.

On Petition for Writ of Certiorari to

the Supreme Court of North Carolina

BRIEF IN OPPOSITION

ROY COOPER

North Carolina Attorney General

Grayson G. Kelley, *Senior Deputy Attorney General

Reginald L. Watkins, Senior Deputy Attorney General

T. Lane Mallonee, Jr., Special Deputy Attorney General

North Carolina Department of Justice

Post Office Box 629

Raleigh, North Carolina 27602-0629

Telephone: (919) 716-6900

Facsimile: (919) 716-6763

Attorneys for Respondent

January 17, 2002 * Counsel of Record

SS

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES .......---eeeeeeeeeeees iii

CITATIONS TO OPINIONS BELOW ..........--+++: l

FUIRIBIIC TIONS occ iicdcccccctcccscsovscescraceses l

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED ......----seeeeees l

STATEMENT OF THE CASE .......----eeeeeeereee 2

A. FACTUAL BACKGROUND ......--++eeee> 2

B. PROCEDURAL ee 3

l. Pleadings .......--ccceesvecees 3

2. Issues Hearing .......---++--++> 3

3. ly Tee PO ee 4

4. Appellate Proceedings ........--- 5

REASONS WHY THE WRIT SHOULD NOT BE

GRANTED .....ccccccccccceccrccccenccces 8

1. THIS COURT HAS NO JURISDICTION IN

THIS CASE UNDER 28 U.S.C. § 1257(a) ..----- 9

A. PETITIONERS HAVE FAILED TO

PROPERLY INVOKE THIS

CouRT’S JURISDICTION UNDER

28 U.S.C. § 1257(a) BY FAILING

To PRESERVE THE QUESTION

PRESENTED FOR REVIEW. ......----+-+-- 10

THE DUE PROCESS QUESTION

PRESENTED WaS Not A FINAL

DECISION BY THE HIGHEST

Court OF THE STATE ..........-- 13

II. PETITIONERS HAVE FAILED TO

DEMONSTRATE A COMPELLING

REASON WHY THE WRIT SHOULD BE

CREE, 2. a the hadi odes set ekewetnaane 13

A. THE QUESTION DECIDED BY

THE NORTH CAROLINA

SUPREME CourT IS NOT ONE

OF SUCH RECURRING

CONSTITUTIONAL SIGNIFICANCE

AS TO MERIT REVIEW By THIS

CN ent cia ak tae enes eae ies 14

B. THE DECISION OF THE NORTH

CAROLINA SUPREME Court IS

Not IN CONFLICT WITH THE

DECISIONS OF THIS COURT.. ......- 17

ll. SUMMARY REVERSAL IS AN

EXTRAORDINARY REMEDY NOT

WARRANTED IN THIS CASE .......... 20

CO oi. on eth dw sd Rk had oe ian 21

iii

TABLE OF AUTHORITIES

CASES

Ashwander v. Tennessee Valley Authority,

297 US. ZEB (IDES) «cc cccvcccccccccccsevees 14

Bauman v. Ross, 167 U.S. 548 (1896) .........- 14,15,18

Chicago, Burlington & Quincy R.R. Co. v.

City of Chicago, 166 U.S. 226 (1897) .......... 9

Edelman v. California, 344 U.S. 357 (1953) .......-+- 12

Hartford Life Ins. Co. v. Johnson,

249 U.S. 490 (1919) onc cccccccccccccccccess 11

Kirkman v. State Highway Comm'n,

257 N.C. 428, 127 S.E.2d 107 (1962) .......... 15

Los Angeles County Metro. Trans. Auth. v.

Continental Dev. Corp., 941 P.2d 809

(0) IS 7) oer 19

Louisville & N.R. Co. v. Woodford,

234 U.S. 46 (C1DIE) «cnc cscccecccececcces 11,12

Lynch v. New York, 293 U.S. 52 (1934)... eees 10

Magnum Import Co. v. Coty, 262 U.S. 159 (1923) ...-.. 13

ol

iv

McCoy v. Union Elevated Railroad Co.,

yee | ree 14,15,16,18,19

McRea v. Marion County, 133 So. 278 (Ala. 1931) ..... 19

Mellon v. O'Neil, 275 U.S. 212 (1927) .........0000e. 10

Mutual Life Ins. Co. v. McGrew,

See RAD GUE cd Seeudns séaessend eects

National Collegiate Athletic Ass'n v. Smith,

Par EN UED o ccndececeveosventes

Olson v. United States, 292 U.S. 246 (1934) ..........

Raley v. Ohio, 360 U.S. 423 (1959) ........... 0c eee

Rohr Aircraft Corp. v. County of San Diego,

See SE EE Sb 6 Sv nee So ewck Cédves eo

Schweiker v. Hansen, 450 U.S. 785 (1981) ...........

\

Searl v. Lake County Sch. Dist.,

Sa Se EEG dSubs codvnwemicexes a

Spies v. Illinois, 123 U.S. 131 (1887), ................

State v. Grundler, 251 N.C. 177,

111 S.E.2d 1 (1959), cert. denied,

ee OT ere, Spat re

a a il el

Vv

State v. King, 342 N.C. 357, 464 S.E.2d 288 (1995) .... 10

STATUTES

) A oasis ic oe recent eons 1

N.C.G:S. § 136-40A-64(b) (2000) ......eeeeeeeeeeeees 4

WEGOS. CTICITTMOGIOD oa... cece sccceceess 4,5

RULES

Sup. Ct. R. 10(2001) ........0200 eee Appepa eee 13

N.C.R. App. P. 10(b)(1)(1999) ... 2. cc eee eeeeeeeeees 12

This page intentionally left blank

l

CITATIONS TO OPINIONS BELOW

The opinion of the North Carolina Supreme Court,

reversing the opinion of the North Carolina Court of Appeals,

is reported at 353 N.C. 671, 549 S.E.2d 203 (2001), and is

included as Appendix A to the Petition. The opinion of the

North Carolina Court of Appeals, including the dissent by

Judge Horton, is reported at 138 N.C. App. 329, 531 S.E.2d

836 (2000), and is included as Appendix B to the Petition.

Citations herein to those opinions below will be to the

corresponding pages in the Appendices to the Petition.

JURISDICTION

The petitioners seek to invoke the jurisdiction of this

Court, pursuant to 28 U.S.C. § 1257(a) to review a decision of

the North Carolina Supreme Court. As explained below,

respondent contends that petitioners have not established this

Court’s jurisdiction with regard to the specific question they

seek to present.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

In addition to the pertinent portions of the Fifth and

Fourteenth Amendments to the United States Constitution and

Section 136-1 12(1) of the North Carolina General Statutes, Pet.

at 1, Article 1, Section 19 of the North Carolina Constitution

provides:

No person shall be taken, imprisoned, or

disseized of his freehold. liberties, or privileges,

or outlawed, or exiled, or in any manner

deprived of his life, liberty, or property, but by

the law of the land. No person shall be denied

the equal protection of the laws; nor shall any

2

person be subjected to discrimination by the

State because of race, color, religion, or

national origin.

STATEMENT OF THE CASE

Respondent agrees with petitioners that the facts of this

case are relatively simple. However, the procedural history is

not, and to the extent that history bears on the question of

jurisdiction in this case, it must also be examined.

- A. FACTUAL BACKGROUND

Respondent North Carolina Department of

Transportation, pursuant to authority set forth in Chapter 136

of the North Carolina General Statutes, initiated this

condemnation action in State superior court in Catawba

County, North Carolina, to acquire a portion of petitioners’

property fora public highway project. The project involved the

construction of a new multi-lane highway and interchange to

connect U.S. Highway 70/321 with Interstate 40, located less

than one-half mile away. The acquisition consisted of 11.411

acres out of an 18.123 acre tract.

At the time of the acquisition, the subject property was

undeveloped, except for a few billboards, and had no accessible

frontage on any major highway, even though it was visible

from and adjacent to Interstate 40. The tract was located

behind a newly constructed K-Mart and, although the

topography consisted primarily of rolling hills, a deep ravine

near the boundary separated it from this adjacent development.

The only access to the tract was by means of a dead-end city

street which served a few homes and also provided a side

entrance to K-Mart.

As aresult of the project, the remainder of the subject

property now has frontage on the new multi-lane connector to

Interstate 40 and on a deeded right-of-way for a planned city

3

street which, when constructed, will join the connector at a

signalized intersection.

B. PROCEDURAL HISTORY

1, Pleadings

Intheir Answer, Motions and Counterclaim (“Answer”)

filed in the trial court in response to the condemnation

complaint, petitioners asserted that N.C.G.S. § 136-112 was

unconstitutional because, to the extent it allowed consideration

of special and general benefits, it denied them just

compensation in violation of Article I, Section 19, of the

Constitution of North Carolina (“law of the land” provision);

and in violation of Amendment V (“just compensation”

provision) and Amendment XIV (“equal protection” and “due

process” provisions) to the United States Constitution. Pet.

App. at B-23.

2. Issues Hearing

Pursuant to N.C.G.S. § 136-108, a pretrial hearing was

held by the trial court to determine all issues other than the

amount of just compensation due. In that hearing, their Answer

notwithstanding, petitioners brought forth and argued only two

bases for their constitutional challenge to N.C.G.S. § 136-

112(1).

First, stating that their “constitutional attack on the

benefits portion of Chapter 136... is based very simply on this

premise,” see Pet. App. at B-24, they contended there was an

equal protection violation because just compensation for partial

takings of property in North Carolina could be calculated under

two different statutory schemes: one applicable to takings by

respondent for highway purposes (N.C.G.S. Chapter 136), and

the other applicable in proceedings by private and local public

condemnors (N.C.G.S. Chapter 40A). While the difference in

fair market values of the subject property before and after the

4

taking is basic to the calculations under both provisions, the

language of Chapter 40A makes no mention of benefits, special

or general, but specifically provides that compensation is either

the difference in the before and after values, or the fair market

value of the part taken, whichever is greater. N.C.G.S. § 136-

112(1) (2000); N.C.G.S. § 40A-64(b) (2000).

The only other argument advanced by petitioners at the

‘ hearing was that respondent had acted arbitrarily and

capriciously in its dealings with them as compared to other

nearby landowners on the project.

Contrary to petitioners’ assertion in their petition, the

trial court did not rule on the constitutional challenges raised in

the Answer, but instead denied those specific challenges

brought forth and argued at the issues hearing. In so doing the

court concluded that petitioners had “failed to present sufficient

evidence to support the constitutional issues raised and the

relief requested.” Pet. App. at B-31. Petitioners did not

attempt to immediately appeal the trial court’s denial of those

constitutional challenges, but proceeded with the jury trial on

the issue of just compensation.

3. At Trial

At trial, the jury heard testimony from respondent’s

experts that the remainder of petitioners’ property was so

enhanced in value, or benefitted by this project, which created

new frontage and access for the tract, that the fair market value

of the remaining property after the project exceeded the fair

market value of the entire tract before the acquisition. While

petitioners’ experts agreed that part of the remainder was

benefitted by the project, they concluded that the value of the

remainder after the project was still considerably less than that

of the entire tract before the project, and that compensation in

a substantial amount was due petitioners.

5

The trial judge instructed the jury in accordance with

N.C.G.S. § 136-112(1) which provides, in pertinent part:

Where only a part ofa tract is taken, the

measure of damages for said taking shall be the

difference between the fair market value of the

entire tract immediately prior to said taking and

the fair market value of the remainder

immediately after said taking, with

consideration being given to any special or

general benefits resulting from the utilization of

the part taken for highway purposes.

The sole issue submitted to the jury was the amount of money.

petitioners were entitled to recover from respondent as just

compensation for the appropriation of a portion of their

property for highway purposes. Apparently persuaded by

respondent’s evidence, the jury concluded that the value of

petitioners’ remaining property after the project was equal to or

greater than the value of the entire tract before the acquisition

and, accordingly, returned a verdict in the amount of zero

compensation due. North Carolina law does not require a jury

to specify whether it found the existence of special benefits,

general benefits, or both in arriving at its verdict.

4. Appellate Proceedings

Following the jury trial below, petitioners gave notice

of appeal to the North Carolina Court of Appeais. Among the

errors assigned, only two related to constitutional questions

and both of these raised equal protection claims. They were as

follows:

a The Trial Court's denial of Defendants’

constitutional defenses on the grounds that G.S.

136-12(1){sic] violates the equal protection

provisions of the United States and North

Carolina Constitutions.

6

4 The Trial Court's allowing the Jury to

consider the benefit to Defendants’ property in

‘making its determination as to damages

recoverable by the Defendants for the taking in

that this violated Defendants’ rights to equal

protection under the United States and North

Carolina Constitutions.

Pet. App. at B-24. Neither assignment of error implicated the

Due Process Clause of the Fourteenth Amendment to the

United States Constitution, or the “law of the land” (due

- process) provision of the North Carolina Constitution.

The North Carolina Court of Appeals initially denied

review of these and certain other assignments of error on the

procedural ground that a timely appeal had not been taken of

the trial court’s preliminary orders entered following the issues

hearing. However, the court reversed the judgment of the trial

court on an unrelated evidentiary error and remanded the case

for anew trial. Pet. App. at B-1. Upon discretionary review of

the timeliness of appeal issue, which was granted at petitioners’

request, the North Carolina Supreme Court held that immediate

appeal of the interlocutory orders was not required. The case

was remanded to the Court of Appeals for consideration of

those issues for which review had previously been denied,

including the two specific assignments of error set forth above.

Pet. App. at A-1-15

On remand, the North Carolina Court of Appeals, in a

divided opinion, found N.C.G.S. § 136-112(1) to be

unconstitutional on both due process and equal protection

grounds, on its face and as applied to petitioners, to the extent

that it allowed consideration of general benefits. Pet. App. at

B-18-32. Judge Horton dissented and, on appeal, the Supreme

Court of North Carolina reversed in a unanimous decision. Pet.

App. at A-15.

7

The North Carolina Supreme Court first noted that it

was under the “law of the land” clause (due process) and equal

protection provisions of the North Carolina Constitution that

the Court of Appeals had declared the general benefits

provision of N.C.G.S. § 136-112(1) invalid. Pet. App. at

A-2-3.

As to the lower court’s holding that the statute denied

just compensation (due process holding), the Supreme Court

agreed with the dissent that no due process claim had been

properly raised and preserved for review. The Court

specifically noted that respondent had preserved no due process

claim under the “law of the land” provision of the North

Carolina Constitution, either by argument at trial, assignment

of error on appeal, or argument before the Court of Appeals.

Pet App. at A-4. Having held that no due process claim was

properly before the lower court, and having cited the applicable

State procedural rule that was violated, the North Carolina

Supreme Court concluded, “[tJhus the Court of Appeals erred

in considering the constitutionality of the statute on those

grounds, and we disavow their reasoning and reverse their

holding.” Pet. App. at A-4.

The Court also agreed with Judge Horton that the only

constitutional issue properly before the Court of Appeals was

petitioners’ equal protection claim based on the two different

statutory schemes for determining just compensation in partial

takings cases under North Carolina law. One of those schemes

(N.C.G.S. § 136-112(1)) is applicable to takings by respondent

for highway purposes, and the other is applicable in

proceedings by private and local public condemnors (N.C.G.S.

Chapter 40A).

The North Carolina Supreme Court further agreed with

the dissent that N.C.G.S. § 136-112(1) does not violate the

equal protection clause of the North Carolina Constitution. Pet.

App. at A-3-4. The Court held that N.C.G.S. § 136-112(1)

does "not trigger strict scrutiny because it neither classifies on

the basis of a suspect classification nor infringes upon a

fundamental right. Furthermore, N.C.G.S. § 136-112(1)

satisfies rational-basis scrutiny because there are rational

reasons for DOT [respondent] and other condemnors to use

different systems to calculate just compensation.” Pet. App. at

A-5-6. Therefore, the Supreme Court reversed the holding of

the Court of Appeals on the equal protection issue as well. Pet.

App. at A-15.

From this North Carolina Supreme Court decision,

petitioners filed their Petition for Writ of Certiorari.

REASONS WHY THE WRIT SHOULD

NOT BE GRANTED

The decision of the North Carolina Supreme Court

concluded that N.C.G.S. § 136-112(1) was a valid exercise of

the legislative power of the North Carolina General Assembly

and that if did not violate the Equal Protection Clause of either

the United States Constitution or the North Carolina

Constitution. Petitioners now ask this Court to consider

whether the statute violates the Fifth Amendment to the United

States Constitution, an issue which was explicitly stricken from

consideration by the North Carolina Supreme Court as not

having been properly preserved for review in accordance with

State law. Consideration of a constitutional challenge to a state

law raised for the first time in a Petition for Certiorari and

never addressed or decided by the highest court of the state

would be contrary to both the jurisdictional parameters of 28

U.S.C. § 1257(a) and longstanding precedent of this Court.

Nor is the decision of the North Carolina Supreme

Court in conflict with decisions of this Court or of significant ©

constitutional importance. Relying on clear precedent, the

North Carolina Supreme Court simply concluded that the

State’s statutory scheme for determining just compensation in

highway condemnation cases, including allowing finders of

fact to consider general benefits to remaining property, is

9

constitutionally sound. The fact that various states have elected

to establish differing formulas for compensating property

owners where property has been taken for public use does not

justify the exercise of this Court’s jurisdiction. Having

concluded that permitting consideration of general benefits

does not violate any fundamental right guaranteed to a property

owner by the Fourteenth Amendment, this Court has left to the

States the legal and policy decisions surrounding a

methodology of providing the measure of just compensation

necessary to meet State constitutional requirements. The

decision of the North Carolina Supreme Court approving the

methodology adopted by the North Carolina General Assembly

merits no further review by this Court.

I. | THISCOURTHASNOJURISDICTIONIN

THIS CASE UNDER 28 U.S.C. § 1257(a).

The petitioners contend that the North Carolina

Supreme Court, in the context of this State highway

condemnation case, has erroneously decided an important

federal question, to wit: whether, in awarding just

compensation for the taking of a partial tract of property, the

Fifth Amendment allows a court to reduce (offset) the award by

the value of the general benefits said to accrue to the remainder

of the tract as a result of the taking. Pet. at 1. This question

however, was neither considered nor decided by that court, and

should therefore not be reviewed by this Court.

The Fifth Amendment right to just compensation in

condemnation cases is made applicable to the states through the

Due Process Clause of the Fourteenth Amendment. Chicago,

Burlington & Quincy R.R. Co. v. City of Chicago, 166 U.S.

226, 239 (1897). In North Carolina, the rule governing the

calculation of just compensation in highway condemnation

cases, where only part of a tract is appropriated, as here, is

codified in N.C.G.S. § 136-112(1). It allows the finder of fact

(the jury) to consider any special or general benefits resulting

from the utilization of the part taken for highway purposes.

10

Consequently, the question which petitioners are seeking to

present is, in reality, whether N.C.G.S. § 136-112(1) is

unconstitutional on its face because it allows consideration of

general benefits. In the context of the facts of this case, this is

clearly an attack on due process grounds, and the North

Carolina Supreme Court declined to decide that question.

Petitioners are thus seeking to present a due process question

here that was not decided by the highest court of the State.

A. PETITIONERSHAVE FAILED TO

PROPERLY INVOKE THIS

COURT'S JURISDICTION UNDER

28 U.S.C. § 1257(a) By

FAILING TO PRESERVE THE

QUESTION PRESENTED FOR

REVIEW.

This Court has long held that a party seeking to invoke

jurisdiction under 28 U.S.C. § 1257(a) first must present the

federal question for decision to the highest court of the State

having jurisdiction. Further, that court’s decision of the federal

question must be necessary to the determination of the issue,

and the court must actually decide the issue on a judgment

which, as rendered, could not have been given without deciding

it. See Mellon v. O'Neil, 275 U.S. 212, 214 (1927); Lynch v.

New York, 293 U.S. 52 (1934). A challenge to a state statute as

repugnant to the federal constitution, as here, must be explicit

and timely. See Raley v. Ohio, 360 U.S. 423 (1959); Rohr

Aircraft Corp. v. County of San Diego, 362 U.S. 628 (1960).

The federal right or federal question first must be raised in the

trial court, whenever, under State law, the State's highest court

refuses to consider questions not previously raised. State v.

King, 342 N.C. 357, 364, 464 S.E.2d 288, 293 (1995); See also,

Mutual Life Ins. Co. v. McGrew, 188 U.S. 291 (1903); Spies v.

Illinois, 123 U.S. 131 (1887).

Petitioners are correct that a general constitutional

challenge to the statutory language of N.C.G.S. § 136-112(1)

1]

was raised as a defense in their Answer. Pet. at 3. However,

petitioners are incorrect in their assertion “[t]hat the trial court

rejected this federal constitutional challenge.” Pet. at3. At the

hearing before the trial court, petitioners abandoned their

defense that the statute was unconstitutional on its face and

should “be declared null and void.” Rather, the sole defense

argued was that the statute was unconstitutional because

petitioners were treated differently under N.C.G.S. § 136-

112(1) than condemnees under N.C.G.S. § 40A-64(b), and thus

were deprived of equal protection of the law. Pet. App. at B-

23-24. Therefore, petitioners abandoned the due process

violation alleged in their Answer and pursued only the equal

protection argument before the trial court.

Likewise, on appeal to the Court of Appeals, among the

errors assigned, only two related to constitutional. questions,

and neither implicated the Due Process Clause of the

Fourteenth Amendment to the United States Constitution, or

the “law of the land” (due process) provision of the North

Carolina Constitution. These two assignments of error raised

only equal protection claims. Pet. App. at B-24. Thus, the only

constitutional question properly before the North Carolina

Court of Appeals and the North Carolina Supreme Court was

whether the equal protection provisions of the constitutions of

the United States and the State of North Carolina are violated

by the different damage schemes found in N.C.G.S. §§ 136-

112(1) and 40A-64(b). Pet. App. at A-3; B-25. This is clearly

not the question which petitioners now ask this Court to

review. Pet. at i.

This Court has consistently held that federal questions

which were not raised in the trial court and pursued by appeal

in accordance with the state's rules of practice and procedure

cannot provide the basis for jurisdiction if the state's appellate

court refuses to consider the federal question for failure to

timely raise it. See Louisville & N.R. Co. v. Woodford, 234

U.S. 46 (1914); Hartford Life Ins. Co. v. Johnson, 249 U.S. 490

(1919).

12

The North Carolina Rules of Appellate Procedure

provide, in pertinent part,

[i]n order to preserve a question for appellate

review, a party must have presented to the trial

court a timely request . . . stating the specific

grounds for the ruling the party desired the

court to make .... It is also necessary for the

complaining party to obtain a ruling upon the

party's request.

_ N.C.R. App. P. 10(b)(1)(2002).

The North Carolina Supreme Court ruled that because

petitioners did not argue a due process claim before the trial

court and did not raise the issue as an assignment of error on

appeal, they had not complied with the requirements of North

Carolina Rule of Appellate Procedure 10(b). No due process

claim was properly preserved and, therefore, none was properly

before the appellate courts. Pet. App. at A-3-4.

Petitioners, having failed to properly pursue and argue

the alleged due process of law violation applicable through the

“law of the land” clause of the North Carolina Constitution and

the Fourteenth Amendment to the United States Constitution,

cannot now raise that issue in this Court by challenging the

validity of the statute on its face. See State v. Grundler, 251

N.C. 177, 111 S.E.2d 1 (1959), cert. denied, 362 U.S. 917

(1960); Edelman v. California, 344 U.S. 357 (1953); Louisville

& N.R. Co. v. Woodford, 234 U.S. 46 (1914).

13

B. THE DUE PROCESS QUESTIO.ws

PRESENTED WAS NOTA FINAL

DECISION By THE HIGHEST

CourT OF THE STATE.

In order to properly invoke this Court’s jurisdiction

under 28 U.S.C. § 1257(a), petitioners must also present a

question resulting from a final decision of the state’s highest

appellate court. The North Carolina Court of Appeals held that

the general benefits provision of N.C.G.S. § 136-112(1), on its

face and as applied, violates the constitutional requirement of

just compensation. Pet. App. at B-18. As noted above, the

North Carolina Supreme Court held that this due process

question had not been preserved and reversed the Court of

Appeals, holding that the court had erroneously decided a

‘constitutional question on grounds that were not properly

before it. Pet. App. at A-4. The North Carolina Supreme Court

therefore neither addressed nor decided the merits of the due

process issue which petitioners now ask this Court to review.

This Court has clearly stated that “we do not decide in the first

instance issues not decided below.” National Collegiate

Athletic Ass'n v. Smith, 525 U.S. 459, 470 (1999).

II. PETITIONERS HAVE FAILED TO

DEMONSTRATE A COMPELLING

REASON WHY THE WRIT SHOULD BE

GRANTED.

Review by writ of certiorari will be granted only for

compelling reasons. Sup. CT. R. 10 (2001). Under the

predecessor to Rule 10, a federal question raised by a petitioner

may be “of substance” in the sense that, abstractly considered,

it may present an intellectually interesting and solid problem.

But this Court does not sit to satisfy a scholarly interest in such

issues. Nor does it sit for the benefit of the particular litigants.

Magnum Import Co. v. Coty, 262 U.S. 159, 163 (1923). The

phrase “special and important reasons” implies a reach to a

problem beyond the academic or the episodic. This is

[Ec

14

especially true where the issues involved reach constitutional

dimensions, for then there comes into play regard for this

Court’s long practice of avoiding decision of constitutional

issues unless avoidance becomes evasion. Ashwander v.

Tennessee Valley Authority, 297 U.S. 288, 341 (1936).

A.- THE QUESTION DECIDED By

THE NORTH CAROLINA

SUPREME Court Is NoT ONE

_ OF SUCH RECURRING

CONSTITUTIONAL

? SIGNIFICANCE AS TO MERIT

REVIEW By THIS COURT.

Contrary to petitioners’ assertions, there is nothing to

suggest that the long standing difference among the states and

the federal courts on the question of allowing consideration of

general benefits in calculating just compensation is of such

significance to constitutional jurisprudence or suddenly of such

moment to now demand resolution. Petitioners admit that “the

rules about which benefits may be set off against the value of

the land taken are usually of ancient vintage” Pet. at 10, and

“the ‘basic theory’ of just compensatior has not changed for at

least a century” Pet. at 16. Both statements fly in the face of

- the implication that the North Carolina decision creates or

exposes a sharp conflict in constitutional law that must now be

resolved.

In fact, for more than one hundred years this Court has

recognized that most states and the federal courts do not allow

general benefits as an offset; that some states allow general

benefits to offset damages to the remainder, but not the value

of the land taken; and, that still others, like North Carolina,

allow general benefits to offset both. See Bauman v. Ross, 167

U.S. 548 (1897) and McCoy v. Union Elevated Railroad Co.,

247 U.S. 354 (1918) and the cases cited therein.

15

Despite this obvious difference in rules, this Court has

never sought to impose one uniform rule regarding the type of

benefits that can be considered on the states for two reasons.

First, the difference between general and special benefits in the

context of just compensation has never been held to be of

constitutional significance. This is so because “it is the duty of

the State to see that compensation is just, not merely to the

individual whose property is taken, but to the public which is

to pay for it.” Searl v. Lake County Sch. Dist., 133 U.S. 553,

562 (1890). The just compensation required by the

Constitution is to be measured by the loss in value to the

owner, “[t]o award him less would be unjust to him; to award

him more would be unjust to the public.” Bauman, 167 U.S.

at 574. “He must be made whole, but is entitled to no more.”

Olson v. United States, 292 U.S. 246, 255 (1934). It is well

established that the Fifth Amendment permits the value of land

acquired to be fully offset by benefits to the remainder resulting

from the highway project, because the owner has sustained no

net loss in value. Bauman, 167 U.S. at 584. If the

enhancement in value (benefit) of the remainder is real, not

speculative, and is the proximate result of the project, then the

owner is made whole even though the benefit is set off against

the value of the part of his property that is acquired to build the

highway, and the Constitution satisfied. North Carolina law

requires that to be considered, benefits “must be actual and

appreciable and not merely conjectural and they must be the

direct and proximate result of the improvement.” Kirkman v.

State Highway Comm'n, 257 N.C. 428, 434, 126 S.E.2d 107,

112 (1962).

Second, even though most states and the federal courts

may believe that it is the better rule to allow special but not

general benefits as a setoff, that is not the standard this Court

applies when the constitutionality of a state’s rule is

challenged. As was stated in McCoy:

We may examine proceedings in state

courts for appropriation of private property to

16

public purposes so far as to inquire whether a

rule of law was adopted in absolute disregard of

the owner’s right to just compensation. If the

necessary result was to deprive him of property

without just compensation, then due process of

law was denied him, contrary to the Fourteenth

Amendment. Our concern is not to ascertain

whether the rule adopted by the State is the one

best supported by reason or authority . . . but

with denial of a fundamental right.

- 247 US. at 363 (citations omitted and emphasis added).

The fundamental right to just compensation is not

denied when benefits are considered, no matter if they are

dubbed general or special, so long as the condemnee is made

whole.

By its decision below, the North Carolina Supreme

Court has affirmed that the State of North Carolina, through the

enactment of N.C.G.S. § 136-112(1) which allows

consideration of general benefits, has struck a proper and

constitutional balance between fairness to the property owner

and fairness to the public, and affords a compensation that is

just to the condemnee because it makes him whole in terms of

value. Pet. App. at A-10-11.

Petitioners suggest that allowing consideration of

general benefits offen transforms the constitutional guarantee

of just compensation into a rule of no compensation. Pet. at 10.

In support of this statement they cite only two cases, both

decided more than forty-five years ago. To the contrary, it is

the experience of respondent, gained over the course of

thousands of highway condemnation cases in this State, that

verdicts of zero compensation are extremely rare, and

respondent virtually never offers evidence of what would be

properly characterized as general rather than special benefits in

those proceedings. ~

17

In fact, it is the uniqueness of the facts in petitioners’

case, not the rules applied, that explains their fate in the trial

court. That rare fact situation also explains why their

constitutional challenge to the general benefits provision,

which has been intact for over one hundred years, was one of

first impression in the North Carolina Supreme Court. Pet.

App. at A-9. It is extremely rare that remainder property is so

clearly specially and directly benefitted by a highway project

as here, where the property formerly had no frontage on any

major highways, but now the remainderhas significant frontage

and access on a new, multi-lane connector to a new interstate

highway interchange and on a deeded right-of-way for a

planned city street which will eventually join the connector at

a signalized intersection.

The essence of petitioners’ equal protection argument

below was only marginally premised upon a distinction

between general and special benefits. Petitioners’ actual

grievance was that under the statute applicable to private

condemnors, N.C.G.S. § 40A-64(b), they would have at least

received the value of the land acquired; whereas, under

N.C.G.S. § 136-112(1) consideration of benefits resulted in the

zero verdict. While petitioner may disagree with the policies

underlying this method of just compensation, North Carolina’s

decision to adopt and consistently apply this statutory scheme,

as sanctioned by the highest court of the State does not raise

issues of federal constitutional significance justifying review by

this Court.

B. THE DECISION OF THE NORTH |

CAROLINA SUPREME CourT IS

Not IN CONFLICT WITH THE

DECISIONS OF THIS COURT.

Two time-tested decisions of this Court are especially

pertinent to this issue, not only for what they hold, but also for

what they do not hold.

18

In Bauman, this Court examined the various rules

adopted by the states regarding the offset of benefits, including

those which allow the offset of general benefits, and held:

The Constitution of the United States contains

no express prohibition against considering

benefits in estimating the just compensation to

be paid for private property taken for the public

use; and, for the reasons and upon the

authorities above stated, no such prohibition

can be implied.

167 US. at 584.

Nowhere in Bauman, or in any decision of this Court

thereafter, is it stated or remotely suggested that the Fifth

Amendment right to just compensation precludes the states

from allowing the offset of general benefits, or that the rule that

was being adopted in that case regarding benefits (the federal

rule) was intended to establish the minimum level of

compensation that was constitutionally acceptable.

In McCoy, this Court again examined the benefits rules

in the various jurisdictions which are applicable both where

property is taken, and where it is damaged but not taken. The

plaintiff there claimed he had been deprived of the value of his

property without just compensation in violation of the

Fourteenth Amendment where state law allowed general

benefits to offset the compensation he would have otherwise

received as a result of the construction of an elevated railway

adjacent to his property. The Court held:

The fundamental right guaranteed by the

Fourteenth Amendment is that the owner shall

not be deprived of the value of his property

under a rule which makes it impossible for him

to obtain just compensation. There is no

guarantee that he shall derive a positive

Ve

19

pecuniary advantage from a public work

whenever a neighbor does. It is almost

universally held that in arriving at the amount

of damage to property not taken allowance

should be made for peculiar and individual

benefits conferred upon it — compensauon to

the owner in that form is permissible. And we

are unable to say that he suffers deprivation of

any fundamental right when a state goes one

step further and permits consideration of actual

benefits -- enhancement in market value --

Slowing directly from a public work, although

all in the neighborhoodreceive like advantages.

In such case the owner really loses nothing

which he had before; and it may be said with

reason, there has been no real injury.

247 U.S. at 365-66 (emphasis added).

The North Carolina Supreme Court cited the italicized

portion of the holding in McCoy in its decision below in

support of the proposition that the Fourteenth Amendment

“allows states to empower fact-finders to consider ‘general

benefits’ when calculating just compensation.” Pet. App. at

A-8. Other states are in accord with this interpretation of

McCoy. See McRea v. Marion County, 133 So. 278, 279 (Ala.

1931); Los Angeles County Metro. Trans. Auth. v. Continental

Dev. Corp.,941 P.2d 809, 822 (Cal. 1997). Petitioners contend

this is an erroneous application of federal law. They strain to

distinguish McCoy, contending that because it involved

property that was damaged but not taken. The holding has no

application where property is actually taken.

In McCoy, although it was the value of the property that

had been taken, this Court applied the same Fourteenth

Amendment analysis applicable to a case where property had

been taken, citing the same rules in the various states regarding

offset of benefits. The same due process right to just

20

compensation where property is taken was involved. While the

Court noted that no property had been taken, there is no

suggestion in the opinion that a different rule would apply if an

actual loss of property had been involved. Further, the Court

noted that the subject was much discussed in Bauman and

quoted extensively from the holding in that case, including the

proclamation that the Fifth Amendment does not prohibit the

offset of benefits. Therefore, this Court clearly treated and

analyzed McCoy as a takings case. The North Carolina

Supreme Court thus properly applied McCoy in concluding that

neither the Fifth nor the Fourteenth Amendment to the United

States Constitution precludes a state from allowing fact-finders

to consider general benefits when calculating just

compensation.

Ill, SUMMARY REVERSAL IS_ AN

EXTRAORDINARY REMEDY NOT

WARRANTED IN THIS CASE.

Summary reversal is clearly not warranted here. Usage

and practice suggest that this extraordinary remedy be

employed only in the most unusual case. In order for it to be

available, the law must be settled and stable, the facts not in

dispute, and the decision below clearly in error. Schweiker v.

Hansen, 450 U.S. 785, 791 (1981). Here, petitioners’ own

arguments make it clear that the law is not settled among the

various jurisdictions regarding the offset of general benefits.

For the reasons stated above, even if the North Carolina

Supreme Court misapplied McCoy, which it did not, the result

is that the constitutional issue is not settled because petitioners

cannot point to a decision of this Court which clearly prohibits

the states from setting off general benefits without

constitutional peril. Therefore, petitioner cannot establish that

the North Carolina Supreme Court’s decision was clearly in

error or that summary reversal is warranted.

21

CONCLUSION

For the reasons discussed above, petitioners have failed

to identify any issue worthy of this Court’s consideration on

certiorari. Accordingly, respondent respectfully requests that

this Court deny the Petition for Writ of Certiorari.

Respectfully submitted,

ROY COOPER

Attorney General

Grayson G. Kelley*

Senior Deputy Attorney General

Reginald L.: Watkins

Senior Deputy Attorney General

T. Lane Mallonee, Jr.

Special Deputy Attorney General

N.C. Department of Justice

Post Office Box 629

Raleigh, North Carolina 27602

Telephone: (919) 716-6900

January 17, 2002 *Counsel of Record