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Property rights groups are hoping that a New Hampshire case pending before the Supreme Court will be the next Fifth Amendment takings battleground over land use regulation. The case of Torromeo and MDR Corp. v. Town of Fremont, N.H., No. 02-1507, is on the agenda for the Court’s private conference June 5. At that conference and at another on June 12, the justices will consider dozens of cases to determine whether they merit review in the Court’s next term. Henry Torromeo and the MDR Corp. develop residential properties in Fremont, a suburban community in southern New Hampshire. The local planning board approved their plans for two separate subdivisions, and the developers spent $1 million building the necessary roads, according to the petition. But in March 1999, the town adopted a growth-control ordinance limiting the number of building permits that could be issued in the coming year. As a result of the new ordinance, the town rejected some of Torromeo’s requests for building permits, and all of those requested by the MDR Corp. “Both MDR and Torromeo could not build, had nothing of value to sell, and were not in a financial position to start over in another community,” according to their petition, filed by Sumner Kalman, a lawyer in Plaistow, N.H. The developers sued in state court, and both the Superior Court and the New Hampshire Supreme Court found that the town’s growth ordinance was invalid because it was not supported by a capital improvement program, as required by the state Legislature. The town then issued the permits, but the developers pursued litigation to recover economic damages for the “taking” that occurred during the six months when the illegal ordinance stopped their projects. After a trial, a Superior Court judge determined that the developers were entitled to combined damages of about $100,000. The town appealed, and the state Supreme Court reversed the judgment. It found that the town’s action was a case of “municipal error” that should not result in a damages award. The developers are now before the U.S. Supreme Court, claiming that the New Hampshire Supreme Court misinterpreted high court precedents on takings and just compensation. They also claim that lower courts are divided over the issue in the context of land use regulations later found to be invalid. Both the Defenders of Property Rights and the Pacific Legal Foundation filed briefs supporting the developers’ request for Supreme Court review. The Pacific Legal Foundation cites numerous state court decisions with conclusions contrary to New Hampshire’s. The foundation also asserts that if the New Hampshire ruling is allowed to stand, municipal regulators will “take advantage of this situation” by enacting flawed ordinances to block development, knowing that even when the ordinances are tossed out on appeal, they will not be held liable for the delay. In its brief, Defenders of Property Rights also notes that “in cases against the federal government, the courts have generally rejected the argument that an invalid statute or regulation cannot give rise to a taking.” Nancie Marzulla, president of Defenders of Property Rights, adds, “Government can’t pass illegal ordinances and then tell the property owner he gets no just compensation for the damage they caused. Why should government go scot-free when it violates the law? Regardless of the reasons why, the Constitution requires the payment of just compensation for any government action that deprives property owners of reasonable and economically beneficial use of their property.” In response, the town of Fremont asserts that because the defect in the growth ordinance was procedural, the delay in giving the developers their permits does not rise to the level of a taking. “There is a major difference between an ordinance which is found to be unreasonable, arbitrary and therefore an unconstitutional exercise of the police power, and an ordinance which is found invalid only by reason of procedural irregularities,” wrote Fremont’s lawyer John Ryan of Hampton, N.H.’s Casassa and Ryan. OTHER CASES UP FOR REVIEW June 5: • Signature Properties International v. Edmond, Okla., No. 02-1297. Ripeness of substantive due process claims in the contest of land use decisions. • Seminole Entertainment Inc. v. Casselberry, Fla., No. 02-1507. Definition of “prompt judicial review” required when the government revokes the license of an adult entertainment business. June 12: • Castle v. United States, Nos. 02-938 and 02-939. Whether restitution is available as a matter of law when a business performs under contract with the federal government and the government then breaches that contract. • Zapata Hermanos Sucesores SA v. Hearthside Baking Co., No. 02-1318. Whether the United Nations Convention on Contracts for International Sale of Goods permits the award of attorney fees to a successful litigant. • Bishay v. Citizens Bank of Massachusetts, No. 02-1479. Extinction of a claim against a creditor under bankruptcy laws. • TPI v. Winter Storm Shipping Ltd., No. 02-1506. Attachments of funds involved in electronic transfer in an admiralty case. • Carey v. Saffold, No. 02-1505. Tolling of limitations period in habeas corpus cases. • Baystate Technologies Inc. v. Bowers, No. 02-1585. Whether the Copyright Act pre-empts a state law claim for breach of a “shrink-wrap” license involving computer software. “Conference Call” seeks to identify cases on the Supreme Court’s conference agenda that are leading candidates for Supreme Court review. Thomas Goldstein of Washington, D.C.’s Goldstein & Howe selects these cases from the many petitions filed based on several factors, including whether lower courts have split on the issues presented. He does not otherwise participate in the preparation of this column. Note: Goldstein represents the petitioner in Bishay v. Citizens Bank of Massachusetts, No. 02-1479.

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