Eminent Domain Report

When public agencies acquire property for future public projects, many times they are only focused on negotiating the acquisition price with the property owner.  If an acquisition price can be agreed upon voluntarily, eminent domain can be avoided.  But focusing solely on negotiations with the property owner can lead to surprises and exposure on total compensation that may be due to other parties.  A recent article in the Riverside Record, RUSD Agrees To Pay Nearly $1M To Relocate Cellphone Tower, serves as an important reminder for agencies that they must carefully review title ...

We are closely tracking the newly released Senate Bill 254 (Becker, 2025) Study Report, prepared by the California Earthquake Authority (CEA) as Administrator of the Wildfire Fund. While the report outlines several pathways to stabilize California’s insurance and energy markets, one of the most significant proposals is the recommendation to fundamentally overhaul inverse condemnation liability for utilities in California.

I. The Strict Liability Standard Under Fire

In California, courts have consistently applied inverse condemnation liability —rooted in Article I ...

Property Reserve, Inc. v. Superior Court (2016) 1 Cal. 5th 151, is a landmark precondemnation entry case that reinforced the statutory right of a party with the power of eminent domain to enter property to conduct tests and other investigatory work deemed necessary to determine the suitability of property for a public project.

In its latest iteration, the California Court of Appeal for the Third Appellate District, on March 26, 2026 (Department of Water Resources Cases), rejected landowners’ arguments that the Department of Water Resources must meet additional statutory ...

Public utilities rely on access to private and public land to build and maintain essential infrastructure. When voluntary acquisition efforts fall short, litigation becomes a necessary tool to secure those rights. Understanding the eminent domain litigation process enables utilities to navigate court procedures effectively, maintain project timelines, and manage risk while balancing the rights of property owners. This overview dives into what happens once litigation becomes necessary. …

We’ve previously reported on the “Rails to Trails” process by which old railroad corridors are being abandoned and converted into other uses, such as hiking, biking or other trail purposes, and the potential ability of adjacent property owners to seek just compensation in certain circumstances. But what happens when the railroad is owned in fee by the railroad, or alternatively, where the railroad continues to operate but adds a pathway within the railroad corridor? Is compensation owed in these circumstances? 

The Nossaman team recently litigated these issues in a case ...

As Nossaman’s annual eminent domain seminars are coming up on April 21st and April 28th, we thought it would be a perfect opportunity to do a little refresher on the condemnation process so that attendees are ready to dive in at the upcoming seminars.

What is Eminent Domain?

Eminent domain is the power to take property for “public use” upon paying just compensation. This power is rooted in the Fifth Amendment of the United States Constitution and Article I, Section 19 of the California Constitution.

Who has the Power of Eminent Domain?

In California, traditional public entities ...

Courts have historically denied inverse condemnation claims by property owners against water suppliers where the quality of water or chemicals used allegedly caused corrosion or damage to water pipes.  However, under a recent line of cases, that bar to recovery may be shifting.  In a new unpublished decision, Micheli v. City of Fresno (2026 Cal. App. Unpub. LEXIS 1027), the Court permitted a large-scale, class action inverse condemnation lawsuit to proceed where homeowners claimed the City’s water supply corroded their pipes and caused health-related concerns. 

Background ...

When the government approves a private development that diminishes neighboring property values, can a property owner maintain a takings claim?  According to a recent California court decision, the answer is no – governmental approval of a private project cannot trigger inverse condemnation liability. 

Background

In De La Cruz v. City of Los Angeles (2026 U.S. Dist. LEXIS 26413), a new six-story apartment building was being constructed next to the plaintiff’s residence.  The development was approved without a full environmental impact report based on a CEQA exemption for ...

When a lawsuit involves both inverse condemnation claims and other tort claims, trial courts often bifurcate the proceedings. A recent unpublished opinion from the Third District Court of Appeal, Rainey v. Nevada Irrigation District, 2026 Cal. App. Unpub. LEXIS 231, addresses what happens when findings made in the first phase resolve factual issues common to the claims reserved for the second phase.

Background

Two neighboring property owners sued the Nevada Irrigation District, alleging that water leaking and seeping from the District’s irrigation ditch caused landslides ...

This seems like common sense, but a public agency cannot pursue an inverse condemnation cause of action for damages suffered from its own public improvements. Yet that is exactly what the County of Santa Cruz recently attempted against another local public agency. The Court denied leave to amend to add an inverse condemnation cause of action and left unanswered a significant policy question on whether a public agency can pursue a claim for inverse condemnation at all, or whether inverse condemnation only applies to damages to private (not public) property. … 

On the first day of Christmas my client came to me and asked: “who holds title to the partridge in a pear tree that is within our new proposed right-of-way?” I replied that a partridge is a wild animal and not typically subject to private ownership, however if the landowner claims it is a “pet”, it would be considered personal property.

On the second day of Christmas, my client asked me “what do we do if we find two turtle doves on the property that we need to condemn for a new highway?” I said let’s get a right-of-entry from the landowner to do a survey and environmental testing and ...

During the past several years, we’ve been following an eminent domain case playing out in Mendocino County related to the Skunk Train. In 2023, the court concluded that the Skunk Train operator, Mendocino Railway, did not have the right to take property because it was not proposing to put the property to a public use. In a recent unpublished opinion, the Court of Appeal revisited this conclusion, and addressed whether a railroad corporation qualified as a public utility with the authority to exercise eminent domain, and what evidentiary showing is required to establish public use ...

Conservation easements generally preserve land in a predominantly natural or agricultural state. The efforts behind these easements often go unappreciated. The same is true for the notice requirements that correspond with the acquisition of property encumbered by a conservation easement. Failing to heed these notice requirements can impede acquisition efforts and add cost and delay to public projects.

Code of Civil Procedure section 1240.055 sets forth valuation and notice requirements for acquiring conservation easements under threat of condemnation in California.* It ...

We recently detailed Senate Bill 254, which overhauls California’s approach to wildfires. In addition to promoting new transmission facilities, replenishing the wildfire fund, streamlining the siting process and exempting underground plans, there was a notable addition that has not received as much attention: the Natural Catastrophe Resilience Study. There’s a great article by Travis Ritchie, California Wonders if it is Doing Wildfire Risk All Wrong, that covers this topic. In particular, he notes that utilities in California are vulnerable to wildfire liability ...

During the past several years, California legislators have been pushing through new legislation to increase potential housing opportunities in California. In October, Governor Newsom signed California Senate Bill 79 (SB 79), which opens up new residential developments near rail and bus stations in major California communities. Specifically, SB 79 creates rules to override local zoning regulations related to height and density for sites near transit-oriented development stops and applies to the “urban transit communities” of Los Angeles, Orange, San Diego, Alameda ...

The contours of inverse condemnation liability are often tested by creative California plaintiff’s lawyers. In an opinion earlier this year, one Northern California Federal Court dealt with a novel lawsuit in which the Vichy Springs Resort asserted Federal and state-based inverse condemnation theories against the City of Ukiah arising out the City’s shooting range used to train its police officers (Vichy Springs Resort v. Ukiah).

According to the complaint, guests have been visiting the resort for almost two centuries to take in the curative powers of the carbonated warm ...

In 2024, in what was heralded as a big win for developers in California, the U.S. Supreme Court upended decades of California precedent and held that legislatively enacted development impact fees must satisfy the “essential nexus” and “rough proportionality” tests established in Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S. 374. Sheetz v. County of El Dorado (2024) 601 U.S. 267. But the Supreme Court did not decide whether the legislatively enacted fee program at issue in Sheetz actually failed to comply with ...

Planning and constructing public infrastructure projects takes significant time – sometimes many years. Property owners and businesses who may be impacted are left in a state of limbo, not knowing for sure whether the project will move forward, when it will move forward and what the ultimate impacts will be. This can make selling or leasing property problematic and it can also become difficult for businesses to plan effectively. Despite these impacts, unless public agencies engage in oppressive or unreasonable conduct or unreasonable delay, there is typically no liability for ...

Periodically, a new public project needs to acquire land that is already put to an existing public use. In order to condemn such land, the condemning entity must demonstrate that the proposed use is either a compatible use or a “more necessary public use.” If thorough due diligence is not conducted in the early project stages to identify and address impacted existing public uses, a condemning entity may later face a right to take challenge based on the position that the proposed use is not more necessary than the existing public use.

So, what uses qualify as a more necessary use?

On June 24, 2025, the California Court of Appeal heard argument in Sheetz v. County of El Dorado. You may recall that the California Court of Appeal previously held that legislatively enacted development impact fees are exempt from Nollan/Dolan scrutiny, consistent with what was at the time longstanding California Supreme Court precedent. In 2024, however, the U.S. Supreme Court held that legislatively imposed exactions are not exempt from the essential nexus test established in Nollan v. California Coastal Commission (1987) 483 U.S. 825 or the rough proportionality test in ...

For the third year in a row, our attorneys have outlined key trends and issues shaping the water landscape in Nossaman’s California Water Views – 2025 Outlook. Topics range from the effects of climate change on water availability and infrastructure to critical updates in legislative and regulatory frameworks. The publication not only provides insight into developments at the state level but also addresses how decisions from Sacramento, Washington, DC and across the U.S. are influencing California’s water sector. … 

Can a public entity be held liable for inverse condemnation when it fails to prevent another party from causing damage to private property? This one is pretty simple: the answer is no. 

In Youngsma v. City of Cypress, homeowners sued the City for inverse condemnation and public nuisance because the construction of a vehicle maintenance and repair facility on property near their homes caused significant damage. The homeowners claimed that a school district owned the property in question, and the City failed to hold any public hearings or approve of the proposed repair facility. The ...

We previously reported on the recent California Court of Appeal district split as to what standard of review should apply in utility takeover condemnation cases as it pertains to more necessary public use challenges, and specifically whether courts are to exercise independent judgment or whether a public agency’s determination is subject to substantial deference. This district split stems from the 2024 South San Joaquin Irrigation District v. PG&E case (holding that courts should exercise independent judgment) and the 2025 Town of Apple Valley v. Apple Valley Ranchos Water case (holding that courts should give deference to a public agency’s findings). … 

In California, the primary governing structure for condemnation suits is set forth within Title 7 of the California Code of Civil Procedure (CCP 1230.010, et. seq.), otherwise known as the Eminent Domain Act, which was enacted in 1975. In 2006, a few modest updates were made, including the addition of an appraisal reimbursement provision that requires a public entity to pay the reasonable costs, not to exceed $5,000, for a property owner facing condemnation to secure its own appraisal. Now, about twenty years later in 2025, new legislation, AB 1033, has been introduced to the ...

When water agencies provide water to customers, and that water causes damage to customer property, can water agencies face inverse condemnation liability? For quite some time, inverse condemnation liability appeared to be unavailable based on the theory that the customer “invited” the water onto private property by voluntarily connecting to the public water system. However, a recent court of appeal decision, Shehyn v. Ventura County Pub. Works Agency (2025 Cal. App. LEXIS 94*), has opened the door to potential inverse claims, at least where a property owner receives a ...

In 2024, we reported on a significant published appellate decision, South San Joaquin Irrigation District v. PG&E, which concluded that when a public agency uses eminent domain to acquire the assets of an electric, gas, or water utility, the court can exercise its independent judgment in determining whether the agency’s acquisition satisfies the public use and necessity requirements. The decision provided guidance on the standard of review and the limited level of deference given to public agencies in their decision-making on such utility take-overs. … 

Appraising a property being acquired through eminent domain involves a number of unique valuation rules, including highest and best use, larger parcel, date of value, and unique evidentiary restrictions on comparable sales and hypothetical conditions.  One of those rules is known as the “project influence rule”:  an appraiser must disregard any increase or decrease in the property’s value due to the project for which the property is being acquired.  A recent court of appeal decision, City of Pacifica v. Tong (2024 Cal. App. Unpub. LEXIS 7984*), highlights why this rule is not ...

Investors and developers scour the Southern California real estate market searching for opportunities to buy dated houses that they can demolish and replace with large, modern homes to sell for much more.  A few individuals likely thought they struck gold after inheriting a small bungalow cottage in Coronado, California with panoramic views of the Bay and golf course nearby. The cottage, built in 1924, was the smallest house on the street with the least-utilized lot; it represented both a great opportunity and a bygone era. These soon-to-be developers turned inverse condemnation ...

Despite California’s record high levels of precipitation in 2023, water scarcity remains a pressing issue. Governments have turned to using the power of eminent domain to acquire investor-owned utilities in an effort to improve water service and costs for their communities. This complex process, known as municipalization, contains significant legal hurdles for governments because investor-owned utilities are uniquely empowered to challenge such takeovers.

In Nossaman’s California Water Views – 2024 Outlook, we explore the legal framework of condemnation actions ...

Jillian Friess Leivas recently represented IRWA Chapter 67 (Orange County) at the 2024 Region 1 Spring Forum in Las Vegas, Nevada as the Chapter’s President-Elect and International Director. IRWA Region 1 encompasses all chapters within California, Nevada and Arizona.

During the forum, Jillian was awarded the IRWA Region 1 Young Professional of the Year Award. The award recognizes association members who have demonstrated a commitment to the industry at the Chapter, Region and/or International level of the association in terms of participation, contribution and service ...