Eminent Domain Report

In our niche practice of eminent domain, inverse condemnation, and regulatory takings, the blogosphere world is going bonkers.  Why?  Because the United State Supreme Court just issued its decision in Koontz v. St. Johns River Water Mgmt District, No. 11-1447 (cert. granted Oct. 5, 2012), holding that the "essential nexus" and "rough proportionality" standards that apply to the government's attempt to exact land in exchange for a land use permit similarly apply to the government's attempt to demand monetary exactions.  This isn't necessarily shocking news for those of us ...

In 1985, the U.S. Supreme Court issued Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, a landmark decision (as Supreme Court decisions often are) that drastically slashed the number of federal takings claims.  In Williamson County, the Supreme Court held that courts lack jurisdiction over federal regulatory takings claims unless a final decision has been issued and the property owner has exhausted all "adequate State procedures."  The Supreme Court also clarified that exhaustion of adequate State procedures generally requires ...

This week, the Supreme Court issued the second of its three takings decision for this term.  In Horne v. Department of Agriculture, No. 12-123 (June 10, 2013), the Court reversed an earlier decision by the Ninth Circuit Court of Appeals, holding that California raisin handlers could assert a takings claim as a defense to an enforcement action over alleged non-compliance with a raisin regulatory scheme.  

At first glance, the case appears to be of little consquence.  The factual background is quite unique, and the holding is pretty narrowly drawn to those specific ...

We have two big IRWA events coming up. 

IRWA Annual Education Conference

The biggest conference of the year, the IRWA Education Conference, starts June 23 in Charleston, West Virginia.  As always, there will be many great education sessions with strong panels of speakers.  There are also some fun social events and -- on Sunday and Monday -- an exhibition hall. 

Nossaman will be holding down the fort in Booth 305A, trying to keep the troublemakers next to us in line.  Yes, OPC, I'm talking about you. 

I will be there with my colleagues Ben Rubin, the incoming President for Chapter 67 in Orange ...

The House of Representatives has once again resurrected the "Private Property Rights Protection Act" (HR 1944), a bill that would limit the power of eminent domain on a nationwide scale.  I say once again, because as we reported in 2012 (see January 26, 2012 post by Brad Kuhn), the House Judiciary Committee approved a nearly identical bill by an overwhelming 23-5 vote, only to have the bill languish on the House floor.  The vote this time around, however, was nowhere near as emphatic, as the bill barely passed out of the Subcommittee on the Constitution and Civil Justice with a skimpy 5-3 ...

According to an article in the Mercury News, Fremont may use eminent domain process to buy land needed for proposed downtown, the City of Fremont's City Council will be holding a public hearing on Tuesday to consider the adoption of a resolution of necessity to acquire a property for the Capitol Avenue Extension Project.  The impacted property is located at 39138 Fremont Blvd., and it consists of 65,150 square feet of land improved with a three-story building.

The Mercury News article indicates that the staff report supporting the adoption of the resolution of necessity provides ...

After two years of negotiating with residential property owners, the Stanislaus County Board of Supervisors approved acquisition of the property by eminent domain.  The Modesto Bee reports that the board approved the acquisition of a single-family residence at its meeting on Tuesday in order to construct its Claribel Road project, which will cost the county $15.2 million.  The project will widen Claribel Road from two lanes to a four-lane separated highway relieving congestion and reducing the safety concerns of the current configuration, which causes an estimated 16 accidents ...

Given the maze of procedural and substantive hurdles involved, property owners rarely succeed with regulatory takings claims.  Even when owners do win, it is yet more uncommon for courts to award damages, instead allowing the public agency to repeal the regulation.  But securing a victory on liability and a damages award for a temporary regulatory taking, well, that is nearly uncharted territory (going into the realm of unicorns, the Loch Ness Monster, and other mythical creatures); we've heard stories of such events, but it is rare to find reliable documentation.

That all changed ...

The California Transportation Commission (CTC) recently announced the award of $878 million to fund 114 transportation projects.  Brian Kelly, the acting Secretary of Business, Transportation & Housing Agency, stated:

This billion-dollar investment helps preserve California’s great infrastructure of the past and put thousands of Californian’s to work building something new.  These investments in preservation and innovation are absolutely critical to California’s economy:  In 2010, traffic congestion caused 95 million hours of delay, wasting fuel and ...

The City of Imperial has taken the first step in pursuing an eminent domain proceeding by adopting a resolution of necessity to acquire a vacant property for its Transit Center Project.  As reported by the Imperial Valley Press, the City and the property owner have been negotiating the City's purchase of the property but have reached an impasse.  

While the owner concedes the project is needed in the city, he believes his property is "very valuable" and that other locations would be better suited for the Project.  The City disagreed and is moving forward with acquiring the ...

An eminent decision out of the Ninth Circuit United States Court of Appeals is not a common occurrence.  A Ninth Circuit eminent domain decision dealing with intangible property is even less common.  Yet, on April 26, 2013, the Ninth Circuit took it even one step further, issuing an eminent domain decision dealing with intangible property in which the condemning authority is an Indian Tribe.

Having explained just how rare it is to see this type of decision, I now need to make a confession.  While the Ninth Circuit decision arises out of an eminent domain action in which an Indian Tribe is ...

As reported earlier today by a number of news outlets (see for example this KCET article by Chris Clarke), the Bureau of Land Management ("BLM") will be issuing a Final Rule to facilitate right-of-way applications for lands with wind and solar energy development potential.  As explained in the press release issued by the BLM, in the past

"lands included in a proposed right-of-way [would] remain open to the location and entry of mining claims while the BLM" considered the application.

However, the Final Rule, which will be published in the Federal Register, permits the BLM to temporarily ...

We've talked in the past about just how hard it is to state a regulatory takings claim under the Supreme Court's decision in Penn Central Transportation Co. v. New York City, 438 U.S. 104.  I'd go through the test and how hard it is again, but it's complicated, a lot of work and, quite frankly, I'm a bit tired today.  So here's my lazy approach.  Read one of our earlier posts on the subject: 

• Sometimes Regulatory Takings Do Exist Under Penn Central;
• Takings Claims and the Morass that Surrounds Them; or
• Major Regulatory Takings Case Reversed by Ninth Circuit. 

The bottom line is that the courts have ...

Light rail and rapid transit appear to be the hot ticket in California.  Most of our right-of-way acquisition and eminent domain work over the last few years has centered on such projects.  One interesting dispute that regularly pops up between the land owner's appraiser and the public agency's appraiser is whether or not there are "project benefits".  In analyzing the property's "before-condition" value, such benefits need to be excluded (whether positive or negative).  (See Code Civ. Proc., sec. 1263.330.)  But when assessing the property's "after-condition" value in the case ...

California's loss of business goodwill statute, Code of Civil Procedure section 1263.510, provides that before a business can submit its goodwill claim to a jury in an eminent domain case, the business must first demonstrate that:

• The loss is caused by the taking;

• The loss cannot be prevented by relocation or other reasonable mitigation efforts; and

• The loss will not be covered through another form of compensation, such as relocation benefits.

In late-2012, the California Court of Appeal issued a decision in People ex rel. Dept. of Transportation (Caltrans) v. Dry Canyon ...

Acquiring property for public projects typically does not occur until after the project has received environmental approval. While this is the generally accepted rule – and it makes sense for a number of reasons – must a project receive environmental clearance before an agency may begin the property acquisition process? In a recent published decision, Golden Gate Land Holdings, LLC v. East Bay Regional Park District, the California Court of Appeal answered no, and permitted an agency to proceed in reverse order: filing an eminent domain action prior to its complying with the ...

Next Tuesday, April 16, Rick Rayl and I will be hosting a teleconference for the National Business Institute titled "Acquiring Right-of-Way".  It's a 90 minute conference geared towards a national audience of attorneys, real estate professionals, government agencies, appraisers, energy companies, and right-of-way consultants.  You can find a link to the conference here.  For those of you who may be interested, here's the agenda:

1. Acquiring Right of Way for Public & Private Projects (environmental review process & funding constraints, acquisition process & timing, and ...

According to an article in the Daily Republic, Jury: County owes $1.24M in eminent domain dispute, Solano County and a local land owner recently completed an eminent domain trial, and the jury sided with the owner.  The case, Solano County v. Valine, involved the County's partial acquisition of about 10 acres through the middle of the owner's 82-acre farmland in order to develop the Suisun Valley Parkway.  

Our esteemed colleague, professor Gideon Kanner, reports that the government agency initially offered $575,000 for the partial acquisition.  After no agreement could be reached ...

Following the 2005 Kelo decision, California enacted a number of modest eminent domain reforms.  For eminent domain attorneys, the most significant changes arguably came in the procedures for obtaining prejudgment possession.  This can be a major issue on large public improvement projects, as construction schedules and funding commitments are often tied to the date on which the condemning agency secures possession of the property needed for the project.

The new laws both (1) shift the balance of power somewhat away from the agency and towards the property owner, and (2) extend the ...

According to an article in the Whittier Daily News, La Mirada agrees to pay $1.8 million to settle eminent domain case for new railroad underpass, the City of La Mirada has agreed to pay $1.8 million to settle the last eminent domain case involving acquisition of easements and property for the Valley View Avenue underpass at the BNSF Railroad crossing.  The parties were likely close to trial as they had recently exchanged final offers and final demands (see Code of Civil Procedure section 1250.410).  

The $1.8 million settlement sounds like a good deal for the City, as the owner's final ...

For those of you who have followed Nossaman's blog since the very early days, you'll recall our coverage of a significant regulatory takings case, Monks v. City of Rancho Palos Verdes.  The 2008 California decision received much press coverage in that it was one of the very few instances where property owners overcame the myriad substantive and procedural obstacles and succeeded under a regulatory takings theory.  While the Court found a taking occurred, the case was remanded back to the trial court to determine the appropriate remedy.  Now, nearly five years later, the dispute has now ...

What happens when a property owner unknowingly pays the electricity bill on a city-owned parking lot for over 15 years?  If you said nothing, then you get a gold star.

In Murphy v. City of Sierra Madre (pdf), a recent decision out of the Second Appellate District, the plaintiffs-appellants were the subsequent owners of a piece of property originally purchased from the City through a Disposition Development Agreement.  When the City originally transferred the property, it also mistakenly transferred an adjacent electrical meter for a City-owned parking lot.  As a result, from ...

Over the past several months, we've been following some of the recent takings cases that have made their way up to the United States Supreme Court.  So where do things currently stand?  As you've likely heard, the Court issued its decision in Arkansas Game & Fish Commission v. United States (see our summary here); we're waiting for a decision after oral argument in Koontz v. St. John's River Management District (see our summary here); and just this week, the Court heard oral argument in Horne v. U.S. Dept. of Agriculture.  

If you're looking for an excellent summary of the Horne oral argument ...

For those of you who attended the joint meeting today between Chapter 1 of the International Right of Way Association and the Appraisal Institute, we promised to post a cheat sheet that reminds you about the cases associated with our cleverly crafted slides.  (For those of you who did not attend, you missed a great event, and will be punished by likely having no idea what we're talking about below.)

As promised, here is the recap of our case slides, each of which started with:

Where We Learned . . .

1. "That the Court can’t exclude appraisers simply because the judge thinks they are full of crap":  ...

Rick Rayl and I will be speaking this Tuesday, March 19, at the International Right of Way Association (IRWA) Chapter 1 (Los Angeles) annual co-luncheon with the Appraisal Institute.  We'll provide an eminent domain "Year in Review," covering all the important court decisions from the past year.  To make it a bit interesting, we'll be coming up with some funny phrases, and we're hoping some of you will be able to guess what case we're talking about.  Rick promises there will be prizes....

The annual lunch between the IRWA and the Appraisal Institute is always a good one, so we hope you'll ...

On February 27, 2013, the U.S. Court of Appeals for the Federal Circuit affirmed (pdf) the dismissal of a Fifth Amendment takings claim based on the finding that the claim was "not ripe."  The claim is unusual because it arose in the context of the federal Endangered Species Act (ESA).

Casitas Municipal Water District (Casitas) has a contract with the federal Bureau of Reclamation and a license with the State of California authorizing it to divert water for the Ventura River Project (Project).  The contract with the Bureau of Reclamation states that Casitas ...

According to an article in the Press Democrat, Rohnert Park OKs eminent domain at site of future hotel, restaurant, the Rohnert Park City Council recently adopted a resolution of necessity authorizing the use of eminent domain to acquire part of a property needed for a street widening project.  The street widening project is necessary accommodate increased traffic from the new Graton Resort & Casino, and it will require the partial acquisition of 22 properties.

The acquisition encompasses over 16,000 square feet from an undeveloped property that is slated to be improved ...

Before you get your hopes up, this is not a reference to "Opposites Attract" by Paula Abdul, and I will not be singing.  Rather, I am referring to the Montana Legislature's recent decision to repeal a two-year-old law that gave private power-line developers the authority to condemn private property.  The 2011 law was passed in order to override a state court decision prohibiting the use of eminent domain for private power-line development.  As reported in the Independent Record, supporters of the repeal effort believe "that the law gave unprecedented power to private companies to run ...

Earlier this week, in an unpublished decision (pdf), the Ninth Circuit affirmed the denial of compensation for construction that altered a point of access to an existing business.  (Wardany v. City of San Jacinto (9th Cir. 2013) 2013 U.S. App. LEXIS 3463.) 

For those readers who never forget a post, you probably recall that we discussed the district court's decision a couple of years ago.  (See Brad Kuhn's June 1, 2011 Blog Post.)  For the rest of us mortals, here is a quick summary.   The property owner operated a "One Stop Market" that vehicle traffic could access ...

The California Department of Transportation (Caltrans) and the owner of Silveira Ranch are involved in an interesting valuation dispute stemming from Caltrans' acquisition of part of the ranchland needed for Highway 101 improvements.  According to an article in the Marin Independent Journal, Judge gives state a nod in Silveira ranch eminent domain case, the parties disagree on the property's highest and best use, and as a result, they are widely off on their valuation opinions.  Caltrans has offered the owner $1.8 million for the acquisition, while the owner is demanding $6 ...

California continues to move forward with more infrastructure improvement projects.  According to an article in the Daily Republic, Agency starts eminent domain proceedings for I-80/680 project, the Solano Transportation Authority and the California Department of Transportation (Caltrans) are embarking on a $100 million-plus project to improve traffic flow near the Interstates 80 and 680 interchange.  The project includes widening the freeway and constructing new on-ramps at the Green Valley Road interchange.

In order to move forward with project construction ...

For all you Southern California right-of-way folks, the next few weeks have quite a bit in store.  Here's what's going on in the local International Right of Way Association (IRWA) Chapters:

• IRWA Chapter 57 Meeting (2/6/13):  This Wednesday, February 6, IRWA Chapter 57 (Inland Empire) will be hosting its monthly luncheon at the Old Spaghetti Factory in Riverside.  The guest speaker is Mike Mason, MAI, from Overland, Pacific & Cutler.  Mike is a well-known eminent domain appraiser in Southern California, and his presentation is titled, "How Appraisers Lie Without ...

In Lost Tree Village Corporation v. United States, the Federal Circuit addressed this question head on, concluding, to the surprise of no one, that the answer will largely depend upon the unique facts in each case. 

The question arose because the Army Corps of Engineers denied Lost Tree Village Corporation (Lost Tree), a commercial and real estate developer, a permit to fill wetlands on a 4.99 acre plat.  The 4.99 acre plat (Plat 57), along with one other plat (Plat 55) and some scattered wetlands, were holdovers from various properties totaling ...

Given how much publicity the proposal to condemn underwater mortgages received when it first appeared last summer, I suppose it's not surprising that San Bernardino's decision last week not to move forward has also garnered a lot of attention.  Still, it's been hard to keep up with the many articles on the subject these past few days.

If you're trying to keep up as well, here are a number of pieces published over the last few days:

• A January 25 article by Erin Coe on Law360 entitled Calif. County's Halted Mortgage Seizure Plan May Deter Others, that focuses on the question of whether San ...

For the better part of a year, we've been writing about the controversial proposal to use the power of eminent domain to condemn underwater mortgages, allowing homeowners to have a new loan that better reflects the underlying value of the property. 

While the proposal originates from a private company, Mortgage Resolution Partners, much of the media attention focused on a single geographic location:  San Bernardino County, where (at least according to the Wall Street Journal) Mortgage Resolution Partners claims 42,000 of the County's 59,000 privately held mortgages are ...

As we previewed in our recent "year in review" piece, the U.S. Supreme Court has some takings issues before it this term.  One case, Koontz v. St. John's River Water Management District, took center stage yesterday. 

At issue in the case is whether the the "nexus" and "proportionality" tests that we have all come to know in the context of real property dedications also apply to other efforts to impose exactions relative to property-development efforts. 

The case presents a new branch on the tree that arises from cases such as 1987's Nollan v. California Coastal Commission, in which ...

As recently reported in the San Clemente Times, Caltrans is scheduled to begin construction on the Interstate 5/Ortega Highway Interchange project in mid-February.  (See Brian Park's article in the San Clemente Times, Jan. 10, 2013.)   The project, which will reconfigure the Ortega Highway bridge and a number of on-ramps and off-ramps in order to relieve congestion, has had substantial impacts on property owners and businesses.  According to the article, Caltrans anticipates having a complete project schedule by the end of the month.     

As we mentioned in our recent 2012 Eminent Domain Year in Review, we've seen a boom of infrastructure projects in California -- a trend we expect to continue into the near future.  So what exactly are we talking about?  Here's just a few examples:

• California Transportation Commission's $64 Million Allocation:  According to a Caltrans press release, the California Transportation Commission (CTC) recently allocated $64 million to 43 projects that will reduce traffic congestion and repair highways, local streets, and bridges.  You can find a list of the projects ...

For our readers who do not subscribe to Nossaman's Eminent Domain & Valuation Group E-Alerts, I'd suggest you check out our 2012 Eminent Domain Year in Review & 2013 Forecast.  There have been a lot of published court decisions this year, along with some interesting stories making the headlines.  The year in review is a nice, concise summary of what's taken place, and also a look forward to what to expect in 2013. 

We hope you've enjoyed our blog over the last few years.  If you have any suggestions for other topics or materials, or if we put out too much or too little content, please let us ...

In order to construct the Silva Valley Interchange on Highway 50, the El Dorado County Board of Supervisors passed a Resolution on January 4, 2013 to acquire approximately 12 acres by eminent domain.  As reported by In El Dorado County, the county could not negotiate a deal with the owner of a 52 acre block of which the county seeks the 12 acres. The owner did not oppose the project but expressed concerns as to the impacts it would have on his remaining acreage. 

While the Board maintains that using eminent domain is not common for them and Caltrans forced its ...

This is a bit last minute, but I wanted to remind our readers to attend the International Right of Way Association (IRWA) meetings this week in Orange County and the Inland Empire.  Here's what to look out for:

• IRWA Chapter 67:  Orange County holds its monthly luncheon today, January 8.  John Ellis from Integra Realty Resources Los Angeles will provide us with an update on the 2012 real estate market and what to expect in 2013.  John and Integra are integrally tapped into the Southern California real estate market, so those in attendance should get some great insights. 

The Court has once again reminded us that it takes its role as gate keeper seriously.  This week, in an unpublished case, the Court of Appeal issued a decision that serves as a not-so-gentle reminder that business owners are entitled to loss of business goodwill only if they meet the four threshold requirements set forth in CCP § 1263.510: (1) the loss is caused by the taking, (2) the loss cannot be prevented by relocation of the business or taking steps a reasonably prudent person would take to preserve goodwill, (3) compensation was not paid through relocation funds, and (4) the ...

One of the prerequisites to instituting an eminent domain action is the governing agency's adoption of a resolution of necessity to acquire the necessary property.  At the time of adopting the resolution, the agency cannot be precommitted to moving forward with the condemnation.  In other words, the resolution hearing cannot simply be a "rubber-stamped," predetermined result.  

While it has happened, it is a very difficult, uphill battle for a property owner to prove that the government agency was precommitted to the taking at the time of the resolution hearing.  The agency can -- and ...

After passing on a number of Fifth Amendment issues in recent history, the U.S. Supreme Court is scheduled to hear three cases this term in which the takings clause plays a prominent role.  And today, the Court addressed the first of these three cases, holding that a temporary-flooding can result in a taking requiring just compensation under the Fifth Amendment.  

In Arkansas Game and Fish Commission v. United States, the Arkansas Game and Fish Commission argued that a temporary but reoccurring flooding of its property resulted in a taking requiring just compensation.  The ...

A couple of weeks ago, the California Court of Appeal issued a decision that discussed an attorney malpractice lawsuit known as a settle and sue case, where the client settles whatever litigation in which they are embroiled, then turns around and immediately sues their attorney. (Filbin v. Fitzgerald, 2012 WL 5857331). Incidentally, that malpractice action stemmed from an eminent domain case, and if you're interested in it, there's some good lessons to be learned about the Final Offer/Final Demand procedures. 

But this post isn’t about that case -- or "settle and sue" ...

Eminent domain cases are unique in that the roles of the judge and the jury do not match the typical civil jury trial experience where the jury is the arbiter of fact and the judge decides the law.  In eminent domain, the judge still decides the law, but the role is larger, with the judge also deciding many issues of fact.  Drawing the line between the judge's role and the jury's has been a long-standing battle, with condemning agencies typically seeking an expansive role for the judge and condemnees seeking to place everything in the hands of the jury. 

The dispute centers around a deceptively ...

When I was a child, a long long time ago, I learned the importance of paying attention to detail.  While I will not bore you with the details of my adolescence and the shenanigans that forced my parents to drive home this message, I will tell you that I certainly learned to always cross my T's and dot my I's.  Late last week, the California Court of Appeal issued an unpublished decision in Compton Unified School District v. Hassan, Case No. B233412, prohibiting an after-the-fact challenge to a condemnation order issued almost two years prior, largely on the ...

Those don't quite sound like the lyrics to the early-90's popular Ace of Base hit, "The Sign."  But they likely describe the situation of many travelers on the I-10 freeway in Los Angeles thanks to a recent California Court of Appeal decision denying a property owner's inverse condemnation action, and upholding Caltrans' required removal of an 8,000 square foot "wallscape" advertising space on the 155 West Washington Boulevard building.  

In West Washington Properties v. California Department of Transportation, a property owner filed an action against Caltrans seeking to (1 ...

Ever since we started this blog, one of the big topics we've touched on repeatedly deals with public agencies running into issues when trying to secure possession of property for right of way projects.  Whether it's due to project funding constraints, federal oversight demands, construction contract deadlines, project timing requirements, or difficulties dealing with impacted property and business owners, agencies are routinely pressed with stressful deadlines to start building their projects.  Would you like to know what pitfalls to look out for and how to avoid them?  ...

Earlier this week, I spent a day in Los Angeles at a seminar involving regulatory takings issues. It featured a great panel of speakers on a variety of takings, eminent domain, and land use issues. (In fairness, you should view my characterization of the panel's quality with some skepticism; I was Co-Chair of the seminar and therefore played a large role in assembling the panel.)

There were a number of quality take-aways from the day, but a few stood out for me. 

• Mark Alpert of Hart, King & Coldren spoke on a number of regulatory takings issues, focusing in particular on the ...