Eminent Domain Report

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 simple concept:  the jury decides the amount of compensation owed, while the judge decides everything else.  Sounds pretty simple, right?  But is determining the property's highest and best use something that goes to the "amount of compensation," or does it fall within "everything else"?  The case law is replete with other fuzzy examples and inconsistent rulings on the answer.

This week, the Court of Appeal added to this jurisprudence in People ex rel. Department of Transportation v. Dry Canyon Enterprises (Nov. 28, 2012, Case No. B234198), a case involving loss of business goodwill.  In Dry Canyon, the court purports to craft a fourth preliminary goodwill entitlement finding for the judge:  a determination of whether the business possessed any business goodwill to lose.  To me, this is not a new requirement at all, as one of the statutory requirements is that the owner prove that it has lost goodwill as a result of the project.  In order to conclude that the owner lost goodwill, I submit that the court already had to decide that goodwill existed. 

But be that as it may, the Dry Canyon court spends a fair amount of time analyzing the role of judge and jury in eminent domain, including a discussion of whether the constitutional right to a jury trial impacts that analysis (the Court concludes it does not, by the way). 

For a detailed analysis of the Dry Canyon opinion, see the E-Alert written by my colleagues Brad Kuhn and Ben Rubin, Court Decision on Loss of Goodwill Results in Sour Grapes for Business Owners.