Eminent Domain Report

It is commonplace for a local government agency to require a property or business owner to secure a license or permit for a particular type of operation (such as a liquor license, medical marijuana license, etc.).  If the property owner expends substantial funds developing the business or property in reliance on that license or permit, and a government regulation thereafter prohibits that use, does it trigger a taking entitling the property or business owner to just compensation?  According to a recent California district court decision, the answer is no.  In ...

In California, we have an admittedly odd way of determining whether the property or business owner in an eminent domain case is entitled to recover attorneys’ fees.  (Note that I’m specifically talking about an owner’s ability to recover; California law does not provide for a condemning agency’s ability to recover fees).  It’s actually fairly simple:  just before trial, the owner and the agency exchange a Final Demand and a Final Offer.  (See Code of Civil Procedure section 1250.410.)   If the case thereafter proceeds to trial, a jury will typically decide the amount of ...

In Freeport Reg’l Water Auth. v. M&H Realty Partners VI, L.P., 2019 Cal. App. Unpub. LEXIS 6126 (Sept. 16, 2019), the court walked through a complicated fact pattern involving – in its simplest form – a 40-foot easement for an underground water pipeline.  For our purposes, the key issues were valuing (1) the easement being acquired, (2) the severance damages caused to the remainder parcel, and (3) a temporary construction easement for the pipeline’s installation.  Though it was not technically a eminent domain case because the parties had reached an agreement concerning the ...

We recently reported on the California Supreme Court’s decision in Oroville which provided a relaxed standard for public agencies facing inverse condemnation claims.  Since that decision, a new unpublished Court of Appeal decision provides further guidance and supports the “reasonableness” analysis considered in Oroville, although in this case the decision was not as favorable to public entities with respect to determining whether the damage is caused by a public or private improvement ...

Thanks to all of you who were able to attend Nossaman’s Coastal Law Conference last week.  If you missed the event, I provided an update on sea-level rise, managed retreat, and potential eminent domain / regulatory takings issues in California.  Specifically, I touched on: ...

On August 15, 2019, the California Supreme Court issued its first inverse condemnation opinion in more than 22 years in the case City of Oroville v. Superior Court of Butte County, Case No. S243247.  The Court held that to succeed on an inverse condemnation claim, a property owner must show more than just a causal link between the existence of a public improvement and damage to private property:  it must demonstrate that “the property damage was the probable result or necessary effect of an inherent risk associated with the design, construction, or maintenance of the relevant ...

We've been tracking the impacts of sea-level rise in California, and previously reported on a potential recommendation by the California Coastal Commission to utilize eminent domain for "managed retreat" -- buying or condemning threatened homes and relocating them or tearing them down, which would thereafter free the coastline and preserve the beaches.  That recommendation has been met with widespread opposition.  According to an article in the San Diego Reader, "Don't say retreat when talking about sea rise in California," some local cities in San Diego are taking that option off ...

Inverse condemnation litigation and liability has become a particularly hot topic in California over the last several years.  Not many attorneys specialize in this area, and there are a number of traps for the unwary lawyers, public agencies, and property owners involved in such litigation.  A recent Court of Appeal decision provides some important lessons for all parties involved, including the risks of settling inverse condemnation claims with insurance companies, and pitfalls in recovering attorneys' fees ...

In an eminent domain proceeding, the property owner and the condemning agency each typically introduce evidence of just compensation through valuation experts. The jury is then required to render a verdict in between the owner’s (high) valuation and the agency’s (low) valuation. Usually the biggest delta between the sides involves severance damages -- or damages to the remainder property not being acquired. But what happens when the agency’s appraiser does not render a specific valuation opinion, instead simply concluding that any damages are offset by project benefits? Is this sufficient, or is the appraiser required to identify specific dollar amounts for damages and benefits? A recent Court of Appeal decision concludes that the appraiser is not required to identify specific damages and benefits ...

When entering into a lease agreement, parties rarely contemplate that the property may be subject to a future eminent domain proceeding.  As a result, many times the condemnation provision in the lease is given little thought.  But when a condemnation action does arise, that provision becomes critically important for purposes of determining how the eminent domain award is to be allocated among the property owner and business owner, and any ambiguities are likely to lead to a dispute as to apportionment of the award.  A recent California Court of Appeal decision, Thee Aguila v ...

For more than three decades, most property owners have been relegated to state courts when pursuing a takings claim against a state or local agency.  In a 5-4 decision issued this week, the U.S. Supreme Court reversed itself and opened the door to the federal courthouse, allowing property owners to bypass the state courts and file a Fifth Amendment takings claim in federal court in the first instance.  Knick v. Township of Scott, 588 U.S. __ (June 21, 2019).  What this eventually means for property owners, and the federal courts, only time will tell.  However, one can reasonably assume that ...

On June 5, 2019, the California Supreme Court (Court) heard oral argument in the case City of Oroville v. Superior Court of Butte County, Case No. S243247 (Oroville Case). This case is notable because it is the first time that the Court is weighing in on a significant case concerning the doctrine of inverse condemnation since Bunch v. Coachella Valley Water District ...

Like the vast majority of general civil litigation, eminent domain matters usually settle before going to trial.  The resolution is typically documented in either a stipulated judgment or a settlement agreement.  What is unique to eminent domain, however, is that the settlements oftentimes take place before the public project is fully constructed, meaning the parties are resolving their claims based on the "project as proposed," without seeing the actual finished product or fully understanding its impacts on the property.  In documenting a settlement, property owners can ...

We welcome you to join our Partners at several upcoming presentations on eminent domain topics taking place near and far.

First, Nossaman's Eminent Domain & Valuation Practice Group Chair Brad Kuhn will be presenting during Nossaman's 2019 Land Use Seminar on May 21st, in Costa Mesa, CA.  Brad will be part of a discussion concerning the very timely topics of Managed Retreat and Sea Level Rise.  This is an area of great interest for both private landowners, cites and towns, and public agencies alike, and the presentation will provide an overview of the current proposals and ...

Many public agencies and utilities have easements for water or gas pipelines or electric transmission lines.  Those easements typically contain express rights to construct, operate, and maintain the facilities, including rights of access; but oftentimes the easements are silent on what rights are reserved to the private property owner, including whether the owner can place trees or other improvements within the easement area.  As utilities and public agencies are undertaking more thorough efforts to protect and maintain their rights-of-way, they are commonly seeking to remove ...

In Governor Gavin Newsom’s first State of the State address, he called for the creation of a strike force charged with developing a comprehensive strategy to address the destabilizing effect of catastrophic wildfires on the State.  On April 12, 2019, Governor Newsom announced the results of that dedicated effort, in the form of a report titled Wildfires and Climate Change: California’s Energy Future (Strike Force Report).  Governor Newsom also summarized the findings of the Strike Force Report in a press conference that can be viewed here.

The Strike Force Report first sets out ...

More than 50 years ago, Caltrans purchased roughly 500 homes under threat of eminent domain within the planned right-of-way for the anticipated construction of the I-710 freeway (linking Monterey Park to Pasadena).  As we reported a number of years ago, Caltrans finally decided to sell those homes once it became clear the alignment would not be utilized.  We haven't heard much on how that sales process was going, but the Pasadena Star reported recently that it has been the subject of litigation, which has now reached an outcome.

In Steve Scauzillo's April San Gabriel Valley Tribune ...

As we have seen far too many times in California, eminent domain becomes a key tool for public agencies in order to keep public works construction on schedule and avoid jeopardizing state or federal funding.  According to an article in the Santa Cruz Sentinel, Santa Cruz council approves eminent domain for road widening, situation is playing out in Santa Cruz, where the City Council recently approved the adoption of a resolution of necessity to acquire two properties by eminent domain in order to satisfy a July deadline for a $2.8 million construction grant.

The properties in question ...

Jump start your Spring learning goals with the International Right of Way Association's upcoming events throughout California.  Join Nossaman's Eminent Domain & Valuation Chair, Brad Kuhn, for a presentation entitled Managing Publicly Owned Property: Best Practices for Leases, Licenses, and Encroachments.

On Friday, April 5th, Brad will be presenting at the IRWA Chapter 42 Spring Training Conference at the Valley Transportation Authority Auditorium in San Jose, CA.  For more information on the Spring Training Conference, please visit Chapter 42's website ...

Nossaman LLP invites you to join us for our 2019 seminar "Eminent Domain From Start to Finish:  Streamlining the Basics & Navigating the Complexities from Precondemnation to Litigation."  Whether you are new to the Eminent Domain arena or a seasoned pro, this complimentary afternoon seminar with panels of Nossaman attorneys and leading industry professionals will provide extensive insight and guidance into the process of eminent domain.  We will be presenting the seminar at both the Luxe City Center Hotel in Los Angeles, on Tuesday, March 19^th, and the City Club of San Francisco, on ...

When a local government agency impermissibly spot zones a property, thereby depriving it of all economically beneficial uses, can the property owner seek to invalidate that zoning decision, or is the owner left with a claim for damages under the theory of a regulatory taking? In a recent published California district court decision ...

A few months ago, we reported on a Court of Appeal decision, Bottini v. City of San Diego, where the Court held that delays resulting from a governmental agency's improper denial of a permit application for a new development did not result in a regulatory taking.  The case involved a local agency's improper application of CEQA to a proposed residential development, and the property owner successfully securing a decision by the court to overturn the City's requirement to comply with CEQA where there was a clear exemption.  The owner also sought damages due to a lengthy delay in ...

Join Brad Kuhn, Chair of Nossaman's Eminent Domain & Valuation Practice Group, at the International Right of Way Association's Chapter One Annual Valuation Seminar.  The event will be held on Tuesday, February 12, 2019, at the Quiet Cannon Conference Center in Monterey Park, CA.  Brad will be addressing What To Do When the Cookie Isn’t From A Cutter:  Unusual Valuation Scenarios From Eminent Domain.  For current information on the seminar, please consult the IRWA Chapter One website.

Covering Los Angeles, Chapter One is the founding Chapter of the International Right of Way ...

Please join Nossaman Eminent Domain & Valuation Partner Rick Rayl at CLE International's 21st Anniversary Southern California Eminent Domain Conference.  The event will be held from Thursday, January 31^st through Friday, February 1^st at the DoubleTree Downtown in Los Angeles.  Rick will participate in the presentation, Case Law Update:  The Latest Developments, on January 31^st at 10:45 a.m.  Additional topics covered during the conference will include: Government Regulation of Short-Term Vacation Rentals, Insights into Severance Damages, and California’s Wildfires and Potential Inverse ...

With the recent widespread reports of sea-level rise triggered by global warming, the California Coastal Commission -- a state agency which regulates coastal development -- plans to release a proposal in early-2019 which provides guidelines to local jurisdictions on how to combat the potential impacts.  The stakes are enormous, as the Commission believes many homes along California's 1,100 miles of coastline will inevitably be wiped out by a rising ocean.  According to an article by Anne Mulkern in E&E News, Calif. prepares policy for coastal 'retreat', the suggested ...

When the government physically takes or occupies property without first going through the rigorous procedural requirements under California eminent domain law, usually it's a clear-cut case of inverse condemnation liability.  But a recent California Court of Appeal case provides a unique exception involving property subject to dedication.

In Prout v. California Department of Transportation (Dec. 18, 2018, 2018 Cal. App. Unpub. LEXIS 8523),  Caltrans sought to use a 1.3-acre strip of land to make improvements to Highway 12 in Calveras ...

Ever since the demise of redevelopment agencies in 2012, there have been a variety of legislative efforts to revive, incrementally or in whole, some form of redevelopment in California.  We have seen enhanced infrastructure financing districts, community revitalization and investment authorities, and more traditional affordable housing authorities and joint powers authorities.  But we have yet to truly see a funding source that would revive the use of redevelopment tools.  The political climate is much different now than in was in 2012:  California has a surplus budget, there is an ...

In a recent unpublished Court of Appeal decision, Downs v. City of Redding (October 30, 2018), the Court took up two distinct issues: (a) whether a contractor’s use of property for construction staging constitutes a taking when such use is not authorized by the agency, and (b) whether "just compensation" requires payment of damages for the taking of a tree.  Both of these issues are common occurrences in many of the projects we work on and while the Court’s holdings may not come as a surprise, they are a good reminder of the fairness and equity courts apply to such issues ...

The California Coastal Act establishes another layer of regulation governing development in the Coastal Zone. Development under the Coastal Act is defined to encompass essentially everything and anything.  For example, under the Coastal Act development includes such things as a lot line adjustment, releasing fireworks on the 4^th of July, or putting up a No Trespassing sign.  While there are certain limited exemptions, in most cases individuals undertaking any development in the Coastal Zone must obtain a Coastal Development Permit.  In certain instances, the local agency’s ...

On November 1, Nossaman Eminent Domain Partner Bernadette Duran-Brown will be Co-Chairing the Southern California Appraisal Institute’s 51st Annual Litigation Seminar.  Additionally, Ms. Duran-Brown will be joined by Brad Kuhn, Chair of Nossaman’s Eminent Domain & Valuation Practice Group, who will be participating in a panel discussion concerning Easement Valuation.

The seminar will be held on Thursday, November 1^st, at the Omni Hotel, 251 South Olive Street, Los Angeles.  The event will kick off with registration and breakfast at 7:30 a.m., and will also include luncheon ...

On August 31, 2018, the California Legislature passed Senate Bill (SB) 901, which addresses a number of wildfire-related items relating to public utilities.  Governor Brown signed the Bill into law on September 21, 2018.

While the bill introduces a series of new changes, it is particularly noteworthy for what it does not include from Governor Brown’s initial June 2018 proposal for wildfire liability reform.  At least for the time being, lawmakers abandoned the most controversial aspect of Governor Brown’s proposal for the bill: modifying California's strict liability ...

When a governmental agency improperly denies a permit application for a new development, and the proposed development is thereby delayed, does this result in a regulatory taking?  As we've seen in some prior cases, such improper governmental actions can trigger liability, but it is uncommon.  A recent Court of Appeal decision, Bottini v. City of San Diego (Sept. 18, 2018), highlights just how difficult it is for a property owner to pursue a regulatory taking due to a delay caused by a city's improper denial of a development application.

Background

Bottini concerns the ...

For those of you who have followed Nossaman’s eminent domain 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.  Now, ten years later, another group of property owners in Rancho Palos Verdes attempted to pursue a similar regulatory takings claim on the back of ...

We wanted to provide some timely articles for those of you in the eminent domain and valuation arena.

First, Brad Kuhn, the Chair of Nossaman’s Eminent Domain and Valuation Practice Group, was recently featured on the cover of the July/August 2018 issue of Right Of Way magazine—a publication of the International Right of Way Association.  Brad participated in an Industry Roundtable in the issue on leveraging the right of way professional in today’s fast-paced design-build world.  The  Roundtable examined the critical right of way component in infrastructure projects and how ...

One of the unique things about eminent domain cases is that a set of specific procedural rules govern the admissibility of valuation evidence at trial.  A new unpublished opinion from the Court of Appeal, San Bernardino County Transportation Authority v. Byun, explores some of the many things that can go wrong when a party ignores those procedural rules.

At the outset, I must admit to a personal stake in this one; this was a case I handled, and which I argued at the Court of Appeal on May 17 (that the decision came out so quickly after argument gives some sense of how the Court felt about the ...

The Federal Energy Regulatory Commission (FERC) recently issued a Notice of Inquiry seeking input on whether to adjust its policies and procedures for reviewing and issuing authorizations for natural gas transportation facilities.  FERC is specifically considering whether it should modify (i) its methodology for determining whether there is a need for a proposed project, (ii) its consideration of the use of eminent domain and landowner interests, and (iii) its evaluation of environmental impacts.  FERC is also considering whether there are ways to improve the efficiency ...

Many states have enacted eminent domain reform since the U.S. Supreme Court's 2005 decision in Kelo v. City of New London, which broadly defined "public use" to include the government's acquiring property for another private owner to realize an economic benefit (such as increasing tax revenues).  However, as reported by the Institute for Justice in its 50 States Report Card, many of those reform efforts have been insignificant.  And, despite repeated efforts over the last 13 years, Congress has yet to pass legislation limiting the use of eminent domain for truly ...

For years, the College of the Desert has been seeking to acquire the former Palm Springs mall in order to expand its campus to the west valley.  It has been quite a lengthy battle, as the property owner had repeatedly objected to the College's use of eminent domain for the site.  However, last week, the parties finally reached a settlement of the condemnation action, with the College agreeing to pay $22 million for the property -- dramatically more than the $9.6 million the College originally offered to pay.

According to an article in the Desert Sun, the 29-acre property will allow the College ...

When state and local governments impose unreasonable conditions or exactions on private property, owners pursuing a regulatory takings claim often face a maze of procedural obstacles just to have their case heard. I once described these procedural obstacles as resembling Alice's trip through Wonderland, with the parties falling in and out of state and then federal court (instead of a rabbit hole) based on procedural and substantive rules that often seem as logical as the Mad Hatter's recitals at the Tea Party. The reason for this maze stems from (i) a U.S. Supreme Court decision ...

As we’ve seen all too many times in California, when local municipalities delay development approvals -- even improperly -- courts are reluctant to find liability under an inverse condemnation cause of action and award temporary damages. While there have been some successful cases (see Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4th 161), those results are the exception, not the rule.  A recent court of appeal opinion, Mahon v. County of San Mateo 2018 Cal. App. Unpub. LEXIS 1483, provides an example of the uphill battle a property owner faces in successfully ...