An ancient legal maxim holds that “the king can do no wrong.” Every developer who has fought with a city or town in court knows that there is some truth to its modern-day equivalent: “You can’t fight city hall.” Sovereignty has its privileges and eminent domain is an area in which local governments seemingly can do no wrong, as we were reminded in 2005 by the U.S. Supreme Court in Kelo v. City of New London, which upheld the taking of private property for use in a private development. Municipalities usually enjoy a substantial amount of deference from the courts, particularly in eminent domain matters, but one recent case shows that they can be held accountable, even decades after the fact.

In Devine v. Nantucket, handed down on July 19, the Supreme Judicial Court did something it has done perhaps a handful of times in the last century when it invalidated an eminent domain taking and returned the property to its rightful owner. More striking is the fact that the taking occurred in 1968 and the lawsuit to invalidate it was not filed until 2001, long after the three-year statute of limitations normally would have run out, and that the claimant did not even own the property at the time of the taking.

In 1985, a client of Boston-based law firm Hanify & King learned of a buildable, oceanfront lot in the Surfside area of Nantucket that had inexplicably dropped off the tax rolls during the Great Depression. A quick title search showed that the property belonged to Lewis Carmer of New Jersey, who had purchased it in 1923. Hanify’s client located Carmer, then quite elderly, and bought the property from him. Nantucket promptly restored the property to the tax rolls in the new owner’s name. In 2001, after paying more than $45,000 in taxes on the property, the owner made plans to finally build a house. He applied for and obtained septic and building permits and began excavation for the foundation.

Nantucket Airport workers soon filled in the excavation and the town counsel sent a letter to the owner claiming that the town owned the property by virtue of a 1968 order of taking by the Nantucket Airport Commission for a runway expansion project, which listed the block containing the property by number and stated “present owners unknown.” The order had been recorded in the Registry of Deeds in 1968, but was not found during the earlier title search. The property later was enclosed with a fence for the first time. The town revoked all the permits and barred the owners from the property. True to form, however, the tax collector continued to send bills and try to recover unpaid taxes for several years.

The owner sued to establish his title and invalidate the purported taking on the grounds that he was a subsequent bona fide purchaser without notice of the town’s claim. On the few occasions where Massachusetts courts have voided takings in the past, the reason usually was a technical violation of the statute, such as failing to record the instrument within 30 days. Courts have nearly always upheld the validity of challenged takings, reasoning that the right to compensation is a sufficient remedy.

In this case, Hanify sought to invalidate the taking because the town had failed to conduct a reasonable investigation to learn the identity of the property owner before declaring him “unknown,” which resulted in an utter lack of notice to Carmer or any subsequent purchaser.

The town also failed to pay anyone for the property. At trial, several facts were established that made all the difference. First, an expert witness testified that any reasonable title examiner in 1968 would have located Carmer as the owner, and in 1985 would have concluded that Carmer was still the owner. The taking was “invisible” to a prospective purchaser. Second, the town had never enclosed or used the property or taken any other action consistent with ownership for 33 years. On the contrary, the town had assessed and collected taxes and issued building permits to the owner. Finally, it was established that the owner had no knowledge of the purported taking until receiving town counsel’s letter – had he known about it earlier, the statute of limitations to challenge it would likely have run out.

The trial judge concluded that, had the town conducted a reasonable investigation to learn the identity of the owner from a title search, it would have found him. By definition, it did little or nothing to learn his identity. For its part, the town claimed that it had no records from the era (it had records from 1967 and 1969, but not 1968), but that argument misses the point because the court found that any reasonable investigation would have revealed the name of the owner. The only thing the records could have shown, if they existed, would be little or no investigation at all.

At the end of the day, the owner was not unknown; the town simply had not looked for him. Due process requires more and the court entered judgment invalidating the taking. The town appealed and the Supreme Judicial Court unanimously held that the taking was invalid from the beginning – no statute of limitations applied where the town’s own failings had created an invisible taking. The town never owned the property and the subsequent purchaser was entitled to rely on the record title.

The town of Nantucket’s predominant strategy was to rely on the strict statute of limitations and harsh precedent that favored finality of public takings over later claims that they were defective. There is no question that property can be taken against truly unknown owners because the law provides for a procedure to pay the compensation over to the municipal treasurer to hold for any claimants. The case law appeared to be on their side at the beginning, but the town’s position would have required the highest court in the state to excuse the taking of private property without payment of compensation and without conducting even a reasonable search for the name of the owner. That was too much to ask, even where the events occurred nearly 40 years ago.

In this case, private property rights prevailed over any deference to public purpose and finality. Current town officials were ultimately undone by the failings of long-dead or retired officials, but, as the trial judge aptly observed, “the town was the author of its own woes.”