Eminent Domain Report

At its meeting last week, the California Transportation Commission allocated $1 billion for local streets, highways and public transit.  This means a significant amount of money will be available for city, county and regional transportation agencies who will submit their projects to Caltrans in the coming months.   You can read Caltrans District 7 Press Release here.

The projects are spread around the state and include some major funding for rail projects as well as the usual highway improvements and also show that money will be coming to several California regions.  You can see a full ...

Most of us have been inconvenienced by road construction or other public works.  Streets can be more congested, exits closed, and traffic re-routed, making it more difficult to get to the restaurants, yogurt shops, book stores and other businesses we usually frequent.  Not surprisingly, these businesses often see their revenue decline while construction continues.  Does the public agency owe these businesses anything for these losses?

The short answer for most of the country is, usually not.  Courts generally consider construction-related inconvenience part and parcel of living ...

Often times government agencies require property for a public project that is already put to a public use. What are the acquiring agency’s options, assuming an agreement cannot be reached prior to filing a condemnation action?

1.  A condemning agency may acquire property that is already devoted to a public use if the proposed use will not unreasonably interfere with or impair the continuance of the existing public use. The complaint and resolution of necessity must specifically reference the Eminent Domain Law for joint public use. (Code of Civil Procedure section 1240.510). If a ...

Good news California:  local projects are continuing to receive federal funding.  Caltrans announced last week that the U.S. Department of Transportation has granted nearly $35 million in TIGER funds to six local and regional projects throughout the state.

The projects receiving funding include:

• East Side Access Improvement Project ($11.8 million): This Los Angeles County Metropolitan Transportation Authority project will create a network of bike lanes and sidewalks for bicyclists and pedestrians to access the new Regional Connector/1st Central Station in Los Angeles ...

In a thought-provoking article, Anthony F. Della Pelle considers the interesting question of whether the City of Los Angeles could simply take the LA Clippers via eminent domain.  One might typically associate California’s Eminent Domain Law with the taking of land for public utility easements or mass transit projects.  Della Pelle was inspired by an article by Harvey Wasserman, in which Wasserman proposed that the power of eminent domain should be used to take all sports franchises nationwide.  Wasserman reasoned:

The Fifth Amendment says the public has the right to take property ...

If you're a right of way professional, your fall schedule could be quite busy.  I'm having difficulty keeping track of all the upcoming events, so I thought I'd put them all in one place.  Here's what we have on the agenda:

• September 5:  Mobility 21's annual Southern California Transportation Summit.  The event will take place at Disneyland Hotel, and will feature an array of fantastic speakers from various local public agencies, including Riverside County Transportation Commission (RCTC), Los Angeles County Metropolitan Transportation Authority (LACMTA), the California ...

As public agencies continue to expand and build infrastructure throughout California, I've noticed a few recent themes.  First, many projects are supported by federal funds, usually through the Federal Transit Administration (FTA) or the Federal Highway Administration (FHWA).  And second, agencies are becoming more creative in exploring joint development opportunities with the private sector to enhance their projects and the surrounding community.

To the extent you are part of, or work with a public agency, and are involved with a federally funded project involving a potential ...

Last week, the Appraisal Institute unveiled its Standards of Valuation Practice (SVP).  SVP will not replace USPAP (the Uniform Standards of Professional Appraisal Practice) -- which have long-been the mainstay of appraisal standards for many appraisals -- but will serve as an alternative when USPAP or other standards are not required.

According to AI President, Ken Wilson, MAI, SRA:

The SVP will establish a higher level of professional practice, engender public trust and facilitate the growth and advancement of the valuation profession...The SVP will recognize the broad ...

The U.S. Supreme Court's decision last year in Koontz v. St. John's River Water Management District received quite a bit of national coverage in the development world.  If you'll recall, Koontz held that the nexus and proportionality standards that apply to the government's attempt to exact land in exchange for a land use permit similarly apply to monetary exactions.  While the decision may have caused a change in the entitlement process in other states, this was generally already the rule in California under the Mitigation Fee Act.  So deciphering just how Koontz would impact ...

During a windstorm, a tree owned by the City of Pasadena fell on Mr. O’Halloran’s residence, causing damage to his home. Mercury Casualty Company paid Mr. O’Halloran for the damage pursuant to his homeowner’s insurance policy, and then sued the City for inverse condemnation and nuisance based on the damages caused by the City’s tree.

Inverse Condemnation

To state a cause of action for inverse condemnation, the plaintiff must allege that defendant substantially participated in the planning, approval, construction or operation of a public project or improvement which ...

Just in case you lost track of the Martins Beach saga, here is a quick summary and update.  According to reports, a couple of years after billionaire Vinod Khosla bought beachfront property in San Mateo County for over $30 million, his property manager locked a gate to a private access road on the property.  This access road, however, in addition to providing access to the property's residence, also had been used by the public to access Martins Beach (the parties do not agree as to whether the public use was permissive or under claim of right).

Following the gate closure, lawsuits have been ...

As we have reported in the past, public agencies are often faced with deadlines to secure possession of necessary right of way and ensure project funding.  Given the amount of time it takes to secure possession through the court process, agencies must proceed with condemnation actions even where they need additional time to negotiate with property owners.  Delaying the condemnation action for several additional months, while likely to lead to a settlement, ultimately places the project at risk if no deal is reached and thereby forces the agency's hand.  This is exactly what ...

One issue that eminent domain attorneys face routinely involves helping businesses obtain the relocation benefits to which they are entitled under the law, while at the same time pursuing a claim for lost business goodwill.  To us, there is a clear difference between the two, as we are indoctrinated early in our careers into understanding that the two types of relief, while seemingly closely related, are instead largely unrelated in the eyes of the law.

But to a typical business owner facing a forced relocation due to a government acquisition, the issues can appear thorny and complex.  ...

Valuing mineral rights in eminent domain proceedings is inherently speculative and can lead to wide swings in property valuations.  So how do appraisers best deal with the uncertainty involved in mineral exploitation?  The California Court of Appeal recently provided some guidance in San Diego Gas & Electric Company v. Arnold J. Schmidt et al. (2014) 2014 Cal. App. Unpub. LEXIS 5090.  

In Schmidt, the Court allowed the introduction of the property owner’s appraiser’s valuing 115 acres of vacant in San Diego based on the projected future income the property would generate for mining ...

If you ask ten attorneys what keeps them up at night, at least six of them will recount nightmares about missing a filing deadline.  I know what you're thinking.  How hard can it be?  You just look in the Code, find the applicable limitations period, and then you're off.  However, as with all things law related, it very rarely is that simple.  In a recent decision issued by the Second Appellate District, the court explained why filing deadlines are not the only thing practitioners should have nightmares about.  In Excelaron, LLC v. County of San Luis Obispo

"Motions in limine" are motions made shortly before trial, and they're typically filed in an attempt to limit the introduction of evidence to the jury.  They are a powerful tool in eminent domain proceedings, and can be used to limit an appraiser's comparable sales, valuation methodology, or even the expert's entire testimony.  In a recent unpublished California Court of Appeal decision, Verizon of California v. Carrick (2014 Cal. App. Unpub. LEXIS 5030), the Court even approved of the use of an in limine motion to determine whether a party had a compensable interest in the property ...

Californians who have owned their properties for years understand the benefits of Proposition 13: their property taxes are based upon the property's purchase price (with only small allowable annual increases), as opposed to the property's current value.  But upon a transfer, the property gets reassessed at its current value.  Consequently, people in California often wind up with higher property taxes when they sell one property and buy another, even if the new property costs exactly what they received for the sale of the old property.

When an owner is forced to "sell" as a result of the ...

Undaunted by the so-called "death of redevelopment," several California cities have pushed to reinvent -- a.k.a. redevelop -- their downtown cores.  And it appears to be working.

The San Jose Mercury News recently reported that the city of Fremont is breaking ground soon on its extension to Capitol Avenue, creating a new "Main Street" for its Downtown District.  And Fremont is not alone.  Stockton also has a plan to "Bring Downtown Back."  In Southern California, The Desert Sun reports that Palm Springs is moving forward with its downtown redevelopment.

So perhaps redevelopment ...

As reported in the Willits News, Caltrans is going forward with public workshops for the Sherwood Road Intersection Project, one of four "child projects" of the Willits Bypass project, which is anticipated to increase the traffic on Sherwood Road.

But Willits residents won't be seeing improvements any time soon, because construction is dependent on the opening of the Willits bypass, a segment of US 101 through Mendocino County that has been in the works since the 1950s.  And construction of the bypass is currently suspended while Caltrans and the Army Corps of Engineers work ...

The Oxnard Union High School District began Eminent Domain procedures to acquire property owned by the Church of Jesus Christ of Latter-day Saints. The property is required for construction of a right-turn lane for the new Rancho Campana High School, scheduled to open in time for the 2015-2016 school year. According to reports, the City of Oxnard set a deadline of June 30, 2014 for the district to acquire the property or begin the eminent domain process. Although the parties are currently engaged in negotiations, the district initiated eminent domain procedures in order to meet the ...

As reported in Caltrans District 11's press release, there is much good news coming out of California Transportation Commission's meeting last week.  First, thanks to a new state budget that increased transportation funding by $351 million, CTC revised its budget for SHOPP projects to $2.4 billion.

Local projects also received good news with CTC's award of $510 Million to 83 transportation projects around the state.  As reported by Progressive Railroading, several rail projects received significant funding, which will hopefully allow those projects to proceed to ...

Just a few months ago, the California Court of Appeal handed down a significant decision in Property Reserve v. Superior Court which nearly eviscerated public agencies' ability to make use of the statutory "right of entry" procedure to gain access to private property to conduct any significant investigations and testing.  The Court held that any notable physical intrusion onto private property constituted a taking, meaning the public agency needed to proceed with an eminent domain proceeding.  The decision caused an uproar among public agencies across the state.  Well, pump the ...

Along with my colleagues Brad Kuhn, Ben Rubin, and Katherine Contreras, I'm here in Hartford at the IRWA Annual Education Conference.  It's been an interesting few days as we discuss eminent domain issues in the shadow of New London, Connecticut, battle ground of the infamous Kelo decision.  

I spoke yesterday on a panel moderated by Orell Anderson, alongside attorneys Jim Ray and Jeff Pollack.  Our topic involved how contamination issues are handled in litigation.  It was a great session, even though it did not go at all as we planned it.  The extremely engaged audience consumed nearly the ...

This week marks the nine-year anniversary of the Kelo v. City of New London decision.  Since I've been practicing as an eminent domain attorney, Kelo is unquestionably the most well-known and stirring court opinion, creating widespread reform to the use of eminent domain across the country -- even on the opposite coast in California.  Last time I checked, about 45 states had passed some sort of eminent domain reform in response to the Kelo decision.

If you're interested in learning more about the Kelo decision, stay tuned for the film Little Pink House, which is being produced in ...

On June 10, 2014, President Obama signed into law the Water Resources Reform and Development Act of 2014, which, among other things, streamlines the U.S Army Corps of Engineers' infrastructure authorization process, accelerates project delivery, and authorizes federal funding for a variety of projects, including projects in California.  Among these California projects is the San Clemente Shoreline project, which includes construction and continuing maintenance of coastal protection measures along the San Clemente shoreline. 

Under the proposal that ...

Eminent domain litigation can be expensive.  Not just the cost of acquiring the property (which is valued based on its highest and best use, and the "highest price" a willing buyer would pay), but the attorneys' fees, expert appraisal fees, and court costs all add up as well.  We're seeing the impact of such costs in the City of Adelanto, where the City has changed course on its plans to acquire a property by eminent domain.  

According to Brooke Self's article in the Victorville Daily Press, Adelanto halts eminent domain efforts, the City of Adelanto once planned to use eminent domain to ...

In June of last year, the U.S. Supreme Court issued a unanimous opinion in Horne v. Department of Agriculture holding that California raisin handlers could assert a takings claim as an affirmative defense to an enforcement action filed by the United States.  I am happy to point out that in our analysis of the Supreme Court's decision, we explained that "[n]o court has yet found that the Hornes were subject to an unconstitutional taking; rather, the Supreme Court merely held that the jurisdictional argument relied on by the Ninth Circuit to avoid a decision on the merits was ...

Last week I attended the 2014 California Passenger Rail Summit where industry leaders met to discuss the modernization and integration of passenger rail service in California. While the California High Speed Rail train was an important element, to me the main takeaway was the vision of statewide rail connectivity benefiting all of California’s communities.

Several regional government representatives spoke about the success of existing corridors, such as the Capitol Corridor and the expanding LOSSAN corridor, as well as emerging corridors such as the Salinas Rail ...

On March 20, 2014, the California Transportation Commission allocated $334 Million to 53 projects around the state.  As one Caltrans press release puts it, "Californians will be driving on smoother roads, safer bridges, and enjoying the benefits of enhanced transit."

According to Caltrans' director Malcolm Dougherty:

Every $1 spent on preventive pavement maintenance saves Californians $11 that would have been spent on future pavement repairs.

And we can all hope Caltrans is targeting those dollars in the right places.  Some areas that will be seeing significant funds include:

• $59 ...

Last week, the Court of Appeal issued a decision that may be one of the ones we look back on as among the most significant of 2014 (at least in the world of eminent domain).  For years (and certainly for the entire 20 years I've been doing this), public agencies have utilized a statutory "right of entry" procedure to gain access to private property to conduct investigations and testing before deciding whether to move forward with a condemnation action.  (See Code of Civil Procedure section 1245.010 et seq.)  Often, this happens during the CEQA process, as agencies try to assess the ...

On March 7th, a U.S. District Court sided with the Federal Aviation Administration (FAA) on whether the Uniform Relocation Act (URA) provides private property owners with a private right of action: it does not.  The Pacific Shores Property Owners Association sued the FAA over improvements the Border Coast Regional Airport Authority is required to make to a regional airport, Del Norte County Regional Airport, also known as Jack McNamera Field.  To meet the FAA's runway safety standards, the Authority had to close roads and acquire nearby lots to make up for the wetlands lost as a result ...

In the latest in a string of recent U.S. Supreme Court cases that impact right of way issues, on Monday the Court issued its opinion in Marvin M. Brandt Revocable Trust v. United States (Case No. 12-1173, March 10, 2014).  The issue in Brandt involved whether the U.S. Government retained a reversionary interest in the easements it granted to railroads pursuant to the General Railroad Right-of-Way Act of 1875. 

The decision would impact, in particular, the "rails-to-trails" program, designed to convert old, abandoned railroad rights of way to bike trails.  Under the program, the ...

In hopes of modernizing the nation's infrastructure, President Obama revealed a plan to invest $302 billion in transportation over the next four years.  As reported in Politico , the President hopes the additional funds will not only keep the Highway Trust Fund solvent in the short term, but provide a true long-term vision for a modern infrastructure.  But it is not just highways that will be improved.  The President's plan should also give a boost local agencies that are investing in light rail, street cars, and bus rapid transit.

The President will need support from both parties to ...

Despite being destroyed and dismantled, redevelopment in California has been born once again, this time reincarnated under the name of "Infrastructure Financing Districts."  Last week, Governor Brown signed into law AB 471, which amends section 53395.4 of the California Government Code to allow infrastructure financing districts to finance a project or portion of a project located within a redevelopment project area or former redevelopment project area.

Infrastructure financing district law now provides a mechanism to finance projects that would have otherwise ...

The City of Bakersfield can now purchase property in the path of the Centennial Corridor Project between the Westside Parkway and Highway 58.  Under the early acquisition federal program, the City of Bakersfield may purchase properties from homeowners willing to voluntarily sell their property.  Approval for early acquisition of the sites will be requested at the next City Council meeting on March 5th.

On the other hand, the City may begin eminent domain proceedings for the 24th Street Widening Project to acquire the 23 homes in the project’s path.  The EIR for the project was approved ...

On Wednesday, a Nebraska District Court dealt the Keystone XL pipeline project a heavy blow.  The court invalidated a law that allowed the state's governor to approve the pipeline's passage through Nebraska.  The court ruled that the state's legislature circumvented the Public Service Commission (PSC), which regulates pipelines and other utilities, by allowing the governor to approve the route the pipeline would take through Nebraska.  The law also improperly granted TransCanada the power of eminent domain to acquire property within Nebraska, another decision that should ...

As we reported last month, the United States of America and the Federal Aviation Administration had filed a motion to dismiss a lawsuit brought by the City of Santa Monica in federal court seeking to confirm its alleged right to control the fate of the Santa Monica Airport.  Yesterday, the federal court threw out the City's lawsuit, holding that:

• The Quiet Title Claim was time-barred;
• The takings claim had to be brought before the United States Court of Federal Claims pursuant to the Tucker Act; and
• The Tenth Amendment and Fifth Amendment Due Process Claims were not ripe.  

The federal court ...

As recently reported by Aaron Kinney of the San Mateo County Times, State Senator Jerry Hill is planning to introduce legislating requiring the California State Lands Commission to acquire the private property of a Silicon Valley billionaire.  According to the report, after buying beachfront property for $37.5 million, Vinod Khosla, whose net worth was estimated at $1.5 billion as of September 2013, decided to preclude the public from using a private access road leading to his property and the beach.  Some local residents were apparently upset by the closure ...

The California Transportation Commission allocated $138 million to 32 projects around the state at its January 29th, 2014, meeting.  As Caltrans director Malcolm Dougherty put it:

From one end of the state to the other transportation projects are providing good paying jobs while at the same time reducing traffic congestion for the people and businesses in California.

Many of the projects receiving funds are directly aimed at easing commutes.  Some highlights include:

• $8.5 million to Metrolink for its High Speed Readiness Program
• $11.9 million for the Raymond Avenue grade ...

I saw a couple of California redevelopment-related stories over the past week that seemed worthy of at least a brief comment.

First, a court decision involving a rather bold argument by a public agency.

The City of Loma Linda, like so many California cities, used to have a redevelopment agency.  That redevelopment agency acquired property and embarked on various efforts to, well, redevelop things.  When Governor Brown eliminated California's redevelopment agencies, many projects were left in mid-stream.

In the case of Loma Linda, the redevelopment agency purchased some ...

Earlier this month, the California Court of Appeal answered a question that had been outstanding for almost two decades: What standard of review applies to beneficial spot zoning? In Foothill Communities Coalition v. County of Orange, that question was finally answered when the Court held that beneficial spot zoning will be valid only when the record demonstrates that the zoning is "in the public interest."

In 1996, Associate California Supreme Court Justice Stanley Mosk stated in a concurring decision that although courts are traditionally deferential with respect to zoning ...

Landowners routinely have to give up something in return for a government agency’s granting a discretionary permit. However, there are limits, as the government agency cannot typically demand conditions that are not proportional or related to the impacts that would be created by the proposed project. These limits are referred to as the nexus and rough proportionality standards set forth in the well-known United States Supreme Court cases of Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S. 374.

In Powell v. County of ...

On July 6, 2012 President Obama signed into law MAP-21, which, among other things, contained new National Environmental Policy Act ("NEPA") requirements for the Federal Transit Administration ("FTA") and Federal Highway Administration ("FHWA").  Earlier this month, pursuant to a mandate in MAP-21, FTA and FHWA adopted new regulations governing the implementation of two new categorical exclusions.  The two new categorical exclusions apply to (1) projects within an existing right-of-way, and (2) projects receiving limited Federal funding.  

NEPA is the ...

It's not too often you see one government agency threaten another agency with eminent domain.  But it does happen.  A recent article by Barbara Henry in the U-T San Diego, Encinitas has few options on Pacific View site, highlights on such dispute taking place right now.

According to the article, the City of Encinitas very much wants to acquire the Encinitas Union School District's 2.8-acre property that formerly housed the Pacific View Elementary School.  But the School District has rejected the City's overtures, turning down a $4.3 million offer to purchase.  Instead, the School ...

The City of Benicia recently secured funding to build the Benicia Industrial Park Bus Hub, a project that has been on the City's drawing board for years. But there are still some hurdles to construction.  The City will need to acquire at least one parcel for the project, and the owners of the parcel have questioned whether the City’s environmental review of the project is adequate.  The owners also have expressed concerns about the impacts of the project on their taco truck business.  But the City is confident that it can resolve these issues and just adopted a mitigated negative ...

On October 31, 2013, the City of Santa Monica filed a complaint in federal court against the United States of America and the Federal Aviation Administration ("FAA") with the hope of confirming its alleged right to control the fate of the Santa Monica Airport.  Both sides agree that:  (i) the City leased the airport property to the United States in 1941 to support the war effort, (ii) the United States made substantial improvements to the property, (iii) the United States terminated the lease in 1948, (iv) the 1948 instrument terminating the lease contained a reversionary clause, and ...

The City of Sacramento took another step forward on the plan for a new multi-million dollar arena for the Sacramento Kings.  Last Tuesday, in a 7-2 vote, the city council passed a resolution of necessity approving the use of eminent domain to acquire a former Macy’s store property, which comprises more than half of the property needed for the $448 million dollar project.  Wasting no time at all, the City’s legal counsel filed the eminent domain action just two days later, and plans to file a motion to gain prejudgment possession of the property to keep the city’s construction timeline ...

You know how sometimes you go to one of those educational seminars, and it sounds interesting, but then it turns out that a lot of it doesn't really apply to what you actually do?  We hate it when that happens, and so we are constantly trying to find that perfect seminar that covers exactly what we want it to cover. 

After months of careful searching, we didn't find what we were seeking, so we came up with a different plan.  We're going to host our own seminar and fill it full of exactly what we want to cover. 

On March 20, Nossaman will be hosting its first ever Eminent Domain Seminar.  It's going to be ...

California's infrastructure received another push in the right direction last week as the California Transportation Commission (CTC) allocated $152 million to 36 projects statewide -- bringing its total transportation funding for 2013 beyond the $3 billion barrier.  

Some highlights of projects receiving funding this year as 2013 winds to a close:

• Los Angeles received (i) $26 million to improve the Port of Los Angeles, (ii) $20 million to widen the I-5 freeway from the Orange County Line to the I-5/I-605 junction, and (iii) $28 million for the Exposition Light Rail Project ...

In the second flooding decision issued by the U.S. Court of Appeals for the Federal Circuit in the past two weeks, the court held that there was no physical taking because the property was never actually flooded and no de facto taking because no federal entity or regulation prohibited the plaintiffs from using their property.  (See Stueve Bros. Farms, LLC v. United States (No. 2013-5021, Dec. 11, 2013).)

In 1941, the U.S. Army Corps of Engineers completed the construction of the Prado Dam on the Santa Ana River near Corona, California.  Because the Army Corps anticipated that operation of ...