New York Hospitality by Vijay Dandapani

Hotels and the US constitution's takings clause

Venezuela's thuggish leader, Hugo Chavez earlier this week proudly announced that "he (had) seized the landmark Hilton hotel on Margarita Island because its owners dared to impose conditions on its use by his government to host a summit there last month." The strongman was affronted by the fact "to hold the conference we had to ask for permission... and the owners tried to impose conditions on the revolutionary government. No way." While claiming that "the social development side of the tourism and hotel industries in Nueva Esparta state needed to be developed" he was continuing on a well-trodden path. In the recent past the government checked into the Caracas Hilton and stayed for good while  renamed it the Hotel Alba, a reference to the Venezuelan-led leftist regional alliance Alianza Bolivariana para las Americas (ALBA).

The contrast to the US could not be more stark with the US constitution's takings clause the subject of repeated review over the years by the US supreme court including a forthcoming case compelling the use of a fish ladder for a water storage facility. The last case involving a hotel was in 2005 where the tiny 62 room San Remo Hotel sought relief from San Francisco's oppressive housing ordinance. The hotel, however, never really got a hearing due to "issue preclusion" per the federal full faith and credit statute that bars litigants from suing in federal court when a suit based on issues that have been resolved in state court.

It is no accident, perhaps, that US companies shy away from ownership in a variety of jurisdictions from Africa to Asia and South America as property rights afford few if any protections.

In a not too dissimilar vein, Jim Norman a lawyer with Holland & Knight wrote a spoof a few months ago in Hotel Motel Management magazine entitled " If the government ran companies". The counterfactual scenario he envisaged included a government run program imaginatively called Hotel Asset Investment and Restructuring Program (HAIR) that got into asset owners and operators' hair via reservation systems run amok and government standards on a variety of issues. Anyone who has stayed in government "run" hotels in India or this "seven star" Tajik hotel need never imagine what those are.

Publicity of any kind?

Any publicity is good publicity is a trite old adage. That it is not true in a number of instances can be gaged from hotels that hit the limelight inadvertently owing to factors such as indiscretions of public personages which oftentimes does not reflect well on the hostelry. A hotel in Southern California, the storied (of a positive kind) Mission Inn finds itself some unwelcome spotlight owing to a legal dispute between toy industry titan Mattel and MGA Entertainment. A legal spat over the rights to the "Bratz" line of dolls finds the rival companies seeking the same accommodations.

The law blog of the Wall Street Journal reports that in a somewhat unusual deal with the attorneys for MGA, the Mission Inn agreed to bar the attorneys for Mattel from booking at the hotel. Mattel's attorney petitioned the presiding judge (of the trial) to deem the contract unenforceable but the judge declined to intervene. The matter appeared to have been resolved with "lawyers representing the Mission Inn point(ing) out that there was “an exception to the exclusionary contract” that gave Quinn & Co. the option of booking rooms at the Mission through a travel agent, but not directly through the inn". A clever out but as it turned out Mattel's lawyers chose to stay at a neighboring Marriott instead.

Too bad that the hotel did not consider adopting the model of the Bellevue Palace in Berne, Switzerland which during the second world war was a meeting point for the intelligence and diplomatic services of the warring powers with its bar serving as a haunt for rival intelligence chiefs and its restaurant clientele split between guests from the Allied and Axis powers.