Eminent Domain Report

According to a January 10 post on the Fox Rothschild Eminent Domain & Real Estate Litigation Blog, the U.S. Supreme Court is scheduled to hold a conference this week on whether to grant a Petition for Writ of Certiorari on an access-impairment claim arising from a condemnation case in Indiana, Kimco of Evansville, Inc. v. State of Indiana. 

Post author David Snyder explains that the need for Supreme Court review arises from a "general rule" in most states that damages arising from access impairments are not compensable as long as the owner is left with reasonable access, and the belief among many that this "general rule" is fundamentally unfair.

California eminent domain law is generally more protective of condemnees than the law that exists in "most states."  (A classic example of this is California's Code of Civil Procedure section 1263.510, which makes California one of only a handful of states that provides business owners with a right to compensation for loss of business goodwill.)

However, even if California does not track exactly what "most states" do, California access-impairment law is quite a morass.  The "general rule" here is that an impairment must be "substantial and unreasonable" in order to justify compensation.  However, jurisprudence involving what constitutes "substantial and unreasonable" is murky at best, and reading the case law, it quickly becomes clear that courts are loathe to draw any bright, easily-followed lines in this area. 

Moreover, "substantial and unreasonable" need not always apply.  Turning back to business goodwill, it is not clear that business owners must meet that threshold where access impairments impact business goodwill, as section 1263.510, on its face, contains no "substantial and unreasonable" requirement.  

Confusion also exists in California about whether any difference exists between an access impairment by itself, as compared with an access impairment created in conjunction with a partial taking of property.  Ample case law exists to suggest that courts impose a higher level of scrutiny on access-impairment claims that do not involve any physical taking than they do on impairments associated with a physical taking, even though the impacts to property owners may be indistinguishable. 

In the end, California's eminent domain law could certainly use some clarity in this area, though I'm not sure the Indiana case -- even if the Supreme Court decides to hear it -- will make any real difference here.   That said, a Supreme Court ruling that all access impairments affecting value are compensable as a matter of constitutional right would certainly have repercussions across the country.