Eminent Domain Report

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, such as the state, counties, and cities have the power of eminent domain. Other public agencies and special districts, such as transit agencies, water districts, school districts, often have the power of eminent domain. Finally, quasi-public entities, such as investor-owned utilities, may also have the power of eminent domain in California. The source of authority for the use of eminent domain is typically found first in the California Constitution, and then via specific authorizing statutes, such as those in the Government Code or Public Utilities Code.

Prerequisites to Filing an Eminent Domain Action

A condemning entity cannot jump straight to filing an eminent domain action; there is an entire pre-condemnation process that must first be satisfied. In the pre-condemnation process, there are requirements surrounding an appraisal of the property to be acquired, an offer to the property owner, and good faith negotiations. Each of these steps has various statutory requirements that need to be satisfied.

Ultimately, if a voluntary negotiation is not feasible, a public agency that seeks to condemn then needs to give notice of and hold a Resolution of Necessity Hearing. A Resolution of Necessity is a formal decision by a public entity to use eminent domain to acquire property. (Code Civ. Proc., § 1245.220.) Note, investor-owned utilities do not have this same requirement. The Resolution of Necessity must contain specific information, such as: a statement of public use for which the property is to be taken, the statutory authorization to condemn, a description of location and extent of property taken, a declaration that the public entity has determined that public interest and necessity require the proposed project, that the project is planned or located in the manner that will be the most compatible with the greatest public good and least private injury, that the property is necessary for the project, and that the offer to purchase has been made.

Also worth noting, the issue of just compensation is not before the governing body of the public entity. That is an issue to be determined in the eminent domain action itself.

The Eminent Domain Action

Once the good faith negotiations reach an impasse and, in the case of public entities, a Resolution of Necessity is adopted, the next step is to actually file the Complaint in Eminent Domain.

Once filed, often the condemning entity will seek an Order of Prejudgment Possession. This allows the condemning entity possession of the property it seeks to acquire before judgment is entered. The purpose is to allow the construction of crucial public infrastructure to timely commence, while allowing the litigation on the matter of just compensation to continue through the courts.

Then, an eminent domain matter will typically proceed through discovery, usually attempt alternative dispute resolution (such as a mediation) in an attempt to resolve the matter, and then ultimate a trial on Just Compensation if necessary.

Typically, the matter is resolved via a Final Judgment (whether obtained via a settlement or trial), payment of the just compensation, and then a Final Order of Condemnation. The Final Order is recorded with the County Recorder in the county where the property is located and this acts as the final step transferring title of the property at issue to the condemning entity.

Conclusion

This is merely a high-level overview of the eminent domain process. While most eminent domain actions follow this general process, each acquisition is unique and carries with it unique challenges. If you are interested in learning more about the details of the eminent domain process and unique issues that can arise, we invite you to join Nossaman at our upcoming complimentary eminent domain seminars. Please register here and feel free to submit questions ahead of time. We look forward to seeing you!