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We like creative lawyering. We really, really do. After all, we like to think of ourselves as creative lawyers. But sometimes, you wish your colleagues would keep their ardor for seeing a "taking" in every situation in check, because by raising -- and losing, badly -- these marginal claims, they lessen tolerance for more serious takings challenges, and make proving substantial claims more difficult.

So appears to us the case of Bala v. North Dakota, No. 20090312 (Aug. 23, 2010), in which the North Dakota Supreme Court affirmed the dismissal for failure to state a claim of a number of takings challenges to the state and federal governments' enforcement actions against a horse racing enterprise that -- oops! -- missed about 10 million in excise tax payments. Here's the fact summary from the opinion:

In 2003, state and federal authorities began investigating RSI’s account wagering activities. The State, through the North Dakota Racing Commission, determined nearly $9 million from approximately $99 million in account wagering bets was owed as excise taxes and brought a civil lawsuit against Bala and RSI to collect the taxes, and a receiver was appointed to manage RSI.  RSI paid almost $2 million of the taxes, and after Bala filed for bankruptcy on behalf of RSI, the State made a priority claim for the remainder of the excise taxes in the bankruptcy court. State and federal criminal charges were also brought against Bala, RSI, and others involved. After Bala was convicted of numerous federal law violations by a federal court jury, the state criminal proceedings were dismissed. Bala’s federal court convictions were ultimately overturned based on insufficiency of the evidence. See United States v. Bala, 489 F.3d 334 (8th Cir. 2007). However, Bala and RSI’s subsequent petition for a certificate of innocence, a prerequisite to seeking damages against the United States for wrongful imprisonment, was denied.  See United States v. Racing Services, Inc., 580 F.3d 710, 714 (8th Cir. 2009) ("RSI and Bala secretly collected and distributed $99,000,000 of parimutuel account wagers without paying one penny to charities, to the Racing Commission, or to the state treasurer, as North Dakota’s gambling laws required.").

Slip op. at 1-2. Rather than be thankful to be not spending time in the federal and/or North Dakota pokey, "[i]n April 2009, Bala and RSI brought this action against the State, claiming the State took RSI’s property without just compensation in violation of the takings clauses of the state and federal constitutions." Slip op. at 2. Their "interests" were property taken in violation of both the U.S. and the N.D. constitutions, in that they collected cash and took excise taxes, the plaintiffs asserted. The state moved to dismiss for failure to state a claim, which the trial court granted.

The N.D. Supremes, made short work of each of the takings claims and affirmed the dismissal. First, the court correctly noted that the government was not exercising its eminent domain power, but rather its police power. See slip op. at 4. Unfortunately, the court stopped there, as if that conclusion was the end of its analysis. Id. ("Assuming for purposes of argument that the State "took" anything from Bala and RSI in this case, we conclude the State was exercising its police power rather than its eminent domain power."). Problem is, that is always the case where the plaintiff alleges a regulatory taking; by definition, it is the de facto taking of property by the government exercising some power other than the eminent domain power. See Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005).The court needed to explain why it was not a regulatory taking for the government to try and obtain the $10 milion the plaintiff was obligated by law to pay, but did not.

On the second point, the court's analysis was more on the mark. It concluded that the plaintiff did not possess "property" protected by the takings clause because "gambling in North Dakota is a 'highly regulated' industry." Slip op. at 4. You can hardly claim to have unfettered rights to property when the property itself depends on the state for its existence, or is subject to such heavy regulation that you have no reasonable expectation of doing whatever you please with it.

The court also dealt with two other "takings" claims -- see slip op. at 4-6 -- but we will leave those for you to review. Bottom line: no viable takings claim was asserted.

Barista's note: this case was no Amerisource, where the government seized the property of an innocent witness to a crime, only returning it (unusued in the prosecution) after the property became worthless. Even there, the innocent property owner lost what was a much closer call, in our opinion, than the Bala case.

The N.D. court's analysis of the plaintiff's takings claims was really not necessary, and this opinion only made it harder for courts to address substantial and genuine claims that government has regulated property so far as to be the equivalent of a taking.

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Barista's note: This post, like our earlier post on Justice Recktenwald's Supreme Court opinions, is by our Damon Key colleague Rebecca A. Copeland. For those of you who have been following the process, Rebecca is familiar: she was present at the Judiciary Committee hearings when we live-blogged the Katherine Leonard confirmation. Her last post prior to joining Damon Key was as a Deputy Solicitor General for the State of Hawaii, where she argued important appeals for the State. If you are on Twitter, follow her at @rcopelandhi.

Reminder: we will be live blogging the Senate Judiciary hearings on Justice Recktenwald's appointment starting at 9:50 a.m. on Wednesday, August 25, 2010.

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In the second edition of opinions by Hawaii Supreme Court Chief Justice appointee Mark E. Recktenwald (currently serving as an Associate Justice on the court), we review the opinions he authored during his tenure on the Intermediate Court of Appeals where Justice Recktenwald served as Chief Judge from April 30, 2007 until he moved to the Hawaii Supreme Court in May 2009.

Disclaimer: The following does not include any summary disposition orders, orders dismissing appeal, or other court orders – only opinions authored by then Chief Judge Recktenwald or opinions in which he concurred.  I did not find any published opinions in which he dissented.

• State v. Mark, No. 26784 &  No. 26785, May 8, 2009. Recktenwald authored a panel opinion that affirmed defendant’s convictions for murder, attempted murder, and attempted assault charges stemming from the Baskin Robbins incident where one police officer was killed, but vacated the extended term sentences. On May 12, 2010, the Hawaii Supreme Court in an opinion authored by Justice Acoba affirmed concluding that (1) jury instruction related to the defense of use of force in defense of others was erroneous but harmless error because there was no evidence the defendant was justified in using force in the defense of others; (2) concurrent representation of defendant and a hostile witness ended before actual conflict arose; (3) defendant was not denied a fair trial; and (4) on remand the court could empanel a jury to consider extended term sentencing.

• State v. Espinosa, No. 29094, April 30, 2009. Recktenwald concurred in an opinion authored by Judge Watanabe and joined by Judge Fujise. The panel’s opinion reversed the conviction of the defendant for street solicitation of prostitution because the statute excludes a patron of a prostitute – like defendant – from criminal liability.  Recktenwald concurred, noting that the statute is ambiguous with regard to whether it applies to a patron who offers to pay the fee.

• Liberty Mutual Ins. Co. v. Sentinel Ins. Co., Ltd., No. 27429, March 31, 2009.  Judge Watanabe authored a partial opinion of the court and Judge Recktenwald authored a partial opinion of the court (from which Judge Watanabe dissented).  The third judge on the panel (Judge Foley) joined both partial opinions.  In her partial opinion, Judge Watanabe concluded that joint and several liability applies to contractual UIM and UM claims, Liberty Mutual was obligated to pay UM benefits, attorneys’ fees award was not error, and there was no error in prejudgment interest.  In his partial opinion, Recktenwald concluded that the “other insurance” clause did not limit or reduce liability for UM payments.

• Barbee v. Queen’s Medical Ctr., No. 28084, Oct. 31, 2008.  The court affirmed the circuit court’s judgment notwithstanding the jury’s verdict in a medical negligence case due to lack of expert medical testimony to establish causation.

• In re Guardianship of Doe, No. 28139, Oct. 31, 2008.  In a case where an individual was appointed guardian of his incapacitated mother, he could not recover attorneys’ fees form his brother and sister-in-law because they were not parties to the proceeding.

• Carlisle v. One (1) Boat/Tran, No. 26995, February 27, 2008.  In this forfeiture proceeding, Recktenwald authored the opinion for the court holding that the ICA had jurisdiction because the appeal was not time barred and the circuit court erred in dismissing the State’s petition for forfeiture. On November 17, 2008 in an opinion authored by Chief Justice Moon, the Hawaii Supreme Court reversed the ICA’s opinion inasmuch as the relevant statutes and regulations do not provide the required specific authorization for the State’s forfeiture claims (after agreeing that the ICA had jurisdiction).

• Inoue v. Inoue, No. 28028, January 31, 2008.  In this divorce case, Recktenwald’s opinion for the court affirmed the family court’s holding that Wife was equitably estopped from denying Husband was the father of one of her children for purposes of determining custody where the amended birth certificate showed Husband and the father and Wife and Husband treated the child as a daughter of Husband.

• State v. Yamada, No. 27778, Dec. 12, 2007.  The court affirmed conviction for robbery and assault because (1) there was no error in the introduction of another apprehension with a baseball bat, photo lineup that included defendant, or photo of bat; (2) sufficient evidence supported the convictions; (3) there was no prosecutorial misconduct; and (4) there was no justification nor authority to revisiting prior Hawaii Supreme Court rulings in the case.

• State v. Fagaragan, No. 27938, Sept. 10, 2007.  Recktenwald’s opinion for the court affirmed convictions for promoting a dangerous drug and prohibited acts related to drug paraphernalia, but reversed conviction for attempted promoting a dangerous drug because the legislature did not intend for multiple punishments to be imposed in cases involving possession and attempted distribution under HRS 712-1241 where the convictions rest on evidence of possession by a defendant of the same drugs at the same moment in time.

• State v. Mars, No. 27977, Aug. 16, 2007.  The court affirmed conviction on three counts of sexual assault involving two different minors because (1) there was no error in precluding the defendant from introducing certain evidence of one of the minor’s sexual orientation or sexual history; (2) no error in permitting doctor testimony; (3) evidence of defendant’s improper comments regarding the same minor and certain incidents concerning the minor were admissible; and (4) no prosecutorial misconduct in closing argument.

• State v. Kolia, No. 28071, Aug. 16, 2007.  Recktenwald’s opinion for the court affirmed in part and vacated in part conviction because defendant relinquished any expectation of privacy he had in a fanny pack he wore (that contained the drugs and drug paraphernalia that were the basis for the charges) where he voluntarily discarded the fanny pack while fleeing from police.  However, the police should have advised defendant of his Miranda rights before questioning him.