Eminent Domain Report

As an eminent domain lawyer, I sometimes feel about takings claims like Justice Potter Stewart felt about obscenity:  I know it when I see it.  But every so often, a case comes along that reminds us that we might need to dig just a little bit deeper. 

In TrinCo Investment Co. v. United States, No. 2012-5130 (July 18, 2013), it all starts out seeming so simple.  The government comes onto private property without permission, takes $6.6 million worth of timber without asking, and then wanders off without offering so much as a dime in just compensation.  Hard to miss this one:  it's an obvious taking. 

It's not too often a property owner succeeds with an inverse condemnation/regulatory takings claim based on a general plan amendment or zone change.  The owner must generally demonstrate that the regulation either on its face, or when specifically applied to the owner's property, deprives the owner of the economically beneficial uses of the property.  The first attack (a "facial challenge") is difficult to prove, as it is uncommon that a general plan amendment/zone change is drafted in such a way that it -- on its face -- prevents all economic uses of the property.  The second attack (an ...

Following up on my post on the case, I had the opportunity to speak with Colin O'Keefe of LXBN regarding the Supreme Court's ruling in Koontz v. St. Johns River Water Management District. In the interview, I explain the court's ruling and what impact it could have nationally. 

In our niche practice of eminent domain, inverse condemnation, and regulatory takings, the blogosphere world is going bonkers.  Why?  Because the United State Supreme Court just issued its decision in Koontz v. St. Johns River Water Mgmt District, No. 11-1447 (cert. granted Oct. 5, 2012), holding that the "essential nexus" and "rough proportionality" standards that apply to the government's attempt to exact land in exchange for a land use permit similarly apply to the government's attempt to demand monetary exactions.  This isn't necessarily shocking news for those of us ...

In 1985, the U.S. Supreme Court issued Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, a landmark decision (as Supreme Court decisions often are) that drastically slashed the number of federal takings claims.  In Williamson County, the Supreme Court held that courts lack jurisdiction over federal regulatory takings claims unless a final decision has been issued and the property owner has exhausted all "adequate State procedures."  The Supreme Court also clarified that exhaustion of adequate State procedures generally requires ...

This week, the Supreme Court issued the second of its three takings decision for this term.  In Horne v. Department of Agriculture, No. 12-123 (June 10, 2013), the Court reversed an earlier decision by the Ninth Circuit Court of Appeals, holding that California raisin handlers could assert a takings claim as a defense to an enforcement action over alleged non-compliance with a raisin regulatory scheme.  

At first glance, the case appears to be of little consquence.  The factual background is quite unique, and the holding is pretty narrowly drawn to those specific ...

We have two big IRWA events coming up. 

IRWA Annual Education Conference

The biggest conference of the year, the IRWA Education Conference, starts June 23 in Charleston, West Virginia.  As always, there will be many great education sessions with strong panels of speakers.  There are also some fun social events and -- on Sunday and Monday -- an exhibition hall. 

Nossaman will be holding down the fort in Booth 305A, trying to keep the troublemakers next to us in line.  Yes, OPC, I'm talking about you. 

I will be there with my colleagues Ben Rubin, the incoming President for Chapter 67 in Orange ...

Given the maze of procedural and substantive hurdles involved, property owners rarely succeed with regulatory takings claims.  Even when owners do win, it is yet more uncommon for courts to award damages, instead allowing the public agency to repeal the regulation.  But securing a victory on liability and a damages award for a temporary regulatory taking, well, that is nearly uncharted territory (going into the realm of unicorns, the Loch Ness Monster, and other mythical creatures); we've heard stories of such events, but it is rare to find reliable documentation.

That all changed ...

An eminent decision out of the Ninth Circuit United States Court of Appeals is not a common occurrence.  A Ninth Circuit eminent domain decision dealing with intangible property is even less common.  Yet, on April 26, 2013, the Ninth Circuit took it even one step further, issuing an eminent domain decision dealing with intangible property in which the condemning authority is an Indian Tribe.

Having explained just how rare it is to see this type of decision, I now need to make a confession.  While the Ninth Circuit decision arises out of an eminent domain action in which an Indian Tribe is ...

We've talked in the past about just how hard it is to state a regulatory takings claim under the Supreme Court's decision in Penn Central Transportation Co. v. New York City, 438 U.S. 104.  I'd go through the test and how hard it is again, but it's complicated, a lot of work and, quite frankly, I'm a bit tired today.  So here's my lazy approach.  Read one of our earlier posts on the subject: 

• Sometimes Regulatory Takings Do Exist Under Penn Central;
• Takings Claims and the Morass that Surrounds Them; or
• Major Regulatory Takings Case Reversed by Ninth Circuit. 

The bottom line is that the courts have ...

California's loss of business goodwill statute, Code of Civil Procedure section 1263.510, provides that before a business can submit its goodwill claim to a jury in an eminent domain case, the business must first demonstrate that:

• The loss is caused by the taking;

• The loss cannot be prevented by relocation or other reasonable mitigation efforts; and

• The loss will not be covered through another form of compensation, such as relocation benefits.

In late-2012, the California Court of Appeal issued a decision in People ex rel. Dept. of Transportation (Caltrans) v. Dry Canyon ...

Acquiring property for public projects typically does not occur until after the project has received environmental approval. While this is the generally accepted rule – and it makes sense for a number of reasons – must a project receive environmental clearance before an agency may begin the property acquisition process? In a recent published decision, Golden Gate Land Holdings, LLC v. East Bay Regional Park District, the California Court of Appeal answered no, and permitted an agency to proceed in reverse order: filing an eminent domain action prior to its complying with the ...

According to an article in the Daily Republic, Jury: County owes $1.24M in eminent domain dispute, Solano County and a local land owner recently completed an eminent domain trial, and the jury sided with the owner.  The case, Solano County v. Valine, involved the County's partial acquisition of about 10 acres through the middle of the owner's 82-acre farmland in order to develop the Suisun Valley Parkway.  

Our esteemed colleague, professor Gideon Kanner, reports that the government agency initially offered $575,000 for the partial acquisition.  After no agreement could be reached ...

Following the 2005 Kelo decision, California enacted a number of modest eminent domain reforms.  For eminent domain attorneys, the most significant changes arguably came in the procedures for obtaining prejudgment possession.  This can be a major issue on large public improvement projects, as construction schedules and funding commitments are often tied to the date on which the condemning agency secures possession of the property needed for the project.

The new laws both (1) shift the balance of power somewhat away from the agency and towards the property owner, and (2) extend the ...

For those of you who have followed Nossaman's 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.  While the Court found a taking occurred, the case was remanded back to the trial court to determine the appropriate remedy.  Now, nearly five years later, the dispute has now ...

What happens when a property owner unknowingly pays the electricity bill on a city-owned parking lot for over 15 years?  If you said nothing, then you get a gold star.

In Murphy v. City of Sierra Madre (pdf), a recent decision out of the Second Appellate District, the plaintiffs-appellants were the subsequent owners of a piece of property originally purchased from the City through a Disposition Development Agreement.  When the City originally transferred the property, it also mistakenly transferred an adjacent electrical meter for a City-owned parking lot.  As a result, from ...

Over the past several months, we've been following some of the recent takings cases that have made their way up to the United States Supreme Court.  So where do things currently stand?  As you've likely heard, the Court issued its decision in Arkansas Game & Fish Commission v. United States (see our summary here); we're waiting for a decision after oral argument in Koontz v. St. John's River Management District (see our summary here); and just this week, the Court heard oral argument in Horne v. U.S. Dept. of Agriculture.  

If you're looking for an excellent summary of the Horne oral argument ...

On February 27, 2013, the U.S. Court of Appeals for the Federal Circuit affirmed (pdf) the dismissal of a Fifth Amendment takings claim based on the finding that the claim was "not ripe."  The claim is unusual because it arose in the context of the federal Endangered Species Act (ESA).

Casitas Municipal Water District (Casitas) has a contract with the federal Bureau of Reclamation and a license with the State of California authorizing it to divert water for the Ventura River Project (Project).  The contract with the Bureau of Reclamation states that Casitas ...

Earlier this week, in an unpublished decision (pdf), the Ninth Circuit affirmed the denial of compensation for construction that altered a point of access to an existing business.  (Wardany v. City of San Jacinto (9th Cir. 2013) 2013 U.S. App. LEXIS 3463.) 

For those readers who never forget a post, you probably recall that we discussed the district court's decision a couple of years ago.  (See Brad Kuhn's June 1, 2011 Blog Post.)  For the rest of us mortals, here is a quick summary.   The property owner operated a "One Stop Market" that vehicle traffic could access ...

The California Department of Transportation (Caltrans) and the owner of Silveira Ranch are involved in an interesting valuation dispute stemming from Caltrans' acquisition of part of the ranchland needed for Highway 101 improvements.  According to an article in the Marin Independent Journal, Judge gives state a nod in Silveira ranch eminent domain case, the parties disagree on the property's highest and best use, and as a result, they are widely off on their valuation opinions.  Caltrans has offered the owner $1.8 million for the acquisition, while the owner is demanding $6 ...

In Lost Tree Village Corporation v. United States, the Federal Circuit addressed this question head on, concluding, to the surprise of no one, that the answer will largely depend upon the unique facts in each case. 

The question arose because the Army Corps of Engineers denied Lost Tree Village Corporation (Lost Tree), a commercial and real estate developer, a permit to fill wetlands on a 4.99 acre plat.  The 4.99 acre plat (Plat 57), along with one other plat (Plat 55) and some scattered wetlands, were holdovers from various properties totaling ...

As we previewed in our recent "year in review" piece, the U.S. Supreme Court has some takings issues before it this term.  One case, Koontz v. St. John's River Water Management District, took center stage yesterday. 

At issue in the case is whether the the "nexus" and "proportionality" tests that we have all come to know in the context of real property dedications also apply to other efforts to impose exactions relative to property-development efforts. 

The case presents a new branch on the tree that arises from cases such as 1987's Nollan v. California Coastal Commission, in which ...

For our readers who do not subscribe to Nossaman's Eminent Domain & Valuation Group E-Alerts, I'd suggest you check out our 2012 Eminent Domain Year in Review & 2013 Forecast.  There have been a lot of published court decisions this year, along with some interesting stories making the headlines.  The year in review is a nice, concise summary of what's taken place, and also a look forward to what to expect in 2013. 

We hope you've enjoyed our blog over the last few years.  If you have any suggestions for other topics or materials, or if we put out too much or too little content, please let us ...

The Court has once again reminded us that it takes its role as gate keeper seriously.  This week, in an unpublished case, the Court of Appeal issued a decision that serves as a not-so-gentle reminder that business owners are entitled to loss of business goodwill only if they meet the four threshold requirements set forth in CCP § 1263.510: (1) the loss is caused by the taking, (2) the loss cannot be prevented by relocation of the business or taking steps a reasonably prudent person would take to preserve goodwill, (3) compensation was not paid through relocation funds, and (4) the ...

One of the prerequisites to instituting an eminent domain action is the governing agency's adoption of a resolution of necessity to acquire the necessary property.  At the time of adopting the resolution, the agency cannot be precommitted to moving forward with the condemnation.  In other words, the resolution hearing cannot simply be a "rubber-stamped," predetermined result.  

While it has happened, it is a very difficult, uphill battle for a property owner to prove that the government agency was precommitted to the taking at the time of the resolution hearing.  The agency can -- and ...

After passing on a number of Fifth Amendment issues in recent history, the U.S. Supreme Court is scheduled to hear three cases this term in which the takings clause plays a prominent role.  And today, the Court addressed the first of these three cases, holding that a temporary-flooding can result in a taking requiring just compensation under the Fifth Amendment.  

In Arkansas Game and Fish Commission v. United States, the Arkansas Game and Fish Commission argued that a temporary but reoccurring flooding of its property resulted in a taking requiring just compensation.  The ...

A couple of weeks ago, the California Court of Appeal issued a decision that discussed an attorney malpractice lawsuit known as a settle and sue case, where the client settles whatever litigation in which they are embroiled, then turns around and immediately sues their attorney. (Filbin v. Fitzgerald, 2012 WL 5857331). Incidentally, that malpractice action stemmed from an eminent domain case, and if you're interested in it, there's some good lessons to be learned about the Final Offer/Final Demand procedures. 

But this post isn’t about that case -- or "settle and sue" ...

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 ...

When I was a child, a long long time ago, I learned the importance of paying attention to detail.  While I will not bore you with the details of my adolescence and the shenanigans that forced my parents to drive home this message, I will tell you that I certainly learned to always cross my T's and dot my I's.  Late last week, the California Court of Appeal issued an unpublished decision in Compton Unified School District v. Hassan, Case No. B233412, prohibiting an after-the-fact challenge to a condemnation order issued almost two years prior, largely on the ...

Those don't quite sound like the lyrics to the early-90's popular Ace of Base hit, "The Sign."  But they likely describe the situation of many travelers on the I-10 freeway in Los Angeles thanks to a recent California Court of Appeal decision denying a property owner's inverse condemnation action, and upholding Caltrans' required removal of an 8,000 square foot "wallscape" advertising space on the 155 West Washington Boulevard building.  

In West Washington Properties v. California Department of Transportation, a property owner filed an action against Caltrans seeking to (1 ...

While most lawsuits typically start with the filing of a complaint, eminent domain cases really start one key step earlier, with the condemning agency’s adoption of a Resolution of Necessity.  The Resolution establishes (i) the agency’s right to take the property and (ii) the scope of the acquisition.  In order to adopt a Resolution, the agency must make a set of findings, including finding that [t]he proposed Project is planned and located in the manner that will be most compatible with the greatest public good and the least private injury.  In Council of San Benito County ...

A few weeks ago, the California Court of Appeal issued an interesting unpublished decision detailing a long, drawn-out eminent domain battle in Riverside County.  I haven't blogged about it yet because, well to be honest, it feels like such a crazy story I couldn't figure out where to start or what to cover.  But here we go.

Background

The case, Elsinore Valley Municipal Water District v. O'Doherty, starts off rather dull.  In order to serve a residential development, the Water District planned to construct a pump station in a public right of way.  Because it was believed the planned ...

On occasion, public agencies decide to abandon or partially abandon an eminent domain proceeding.  The most typical reason is due to a revision in project design, making the property no longer necessary for the proposed project.  However, to the surprise of many, an abandonment can also occur after an agency receives an unfavorable jury verdict.  Code of Civil Procedure section 1268.510 provides that an agency "may wholly or partially abandon the proceeding" any time after filing the complaint up until 30 days after the entry of final judgment.  (The only exception is if the ...

Inverse condemnation claims can be tricky, particularly in the regulatory context.  You don't want to file your claim too soon, as that will likely result in your claim being booted out of court on ripeness grounds.  But you also don't want to file your claim too late, as that can result in your claim being barred by the applicable statute of limitations.  It is a delicate balance, and one that can often defy logic.  (For a real world example of this Catch 22, see Brad Kuhn's Blog Post.)  Last week, in Rivera v. County of Solano, Case No. A133616, the California Court of Appeal ...

On August 30, 2012, the Second Appellate District of the California Court of Appeal held that a privately owned utility could be subject to strict liability for inverse condemnation, thereby concurring with a similar holding previously reached out of the Fourth Appellate District.

A typical inverse condemnation action is initiated when a property owner files a complaint essentially asserting that a government agency is trying to take its property without filing a formal eminent domain action.  Typical inverse condemnation claims involve ...

I know our blog is called the Eminent Domain Report -- implying we only cover eminent domain-related issues, but in actuality we cover anything valuation-related.  After all, our group of attorneys is known as the Eminent Domain & Valuation Practice Group.  With that said, an interesting value dispute has popped up, making its way to the California Supreme Court.  This one deals with whether intangible assets should be included in one's property tax assessments, and we're looking forward to the Court's decision.

The case, Elk Hills Power v. California State Board of Equalization, deals ...

Earlier this year in City of Livermore v. Baca, the California Court of Appeal held that as long as an expert can identify damages arising from a taking or public project, those damages likely will not qualify as speculative, and they can be presented to a jury in an eminent domain action.   Did this broad holding turn upside down traditional rules of admissibility and recovery of damages, or did it just affirm existing law?  And how will courts apply Baca in the future?  Two recently issued unpublished appellate decisions may help guide the way.

The Superior Coatings Decision

Last ...

In my recent post on City of Corona v. Liston Brick Company of Corona, 2012 Cal. App. LEXIS 873, I took a few minutes to discuss the conflict under California law concerning what happens when one side presents a valuation opinion and the other does not.  As I explained there, while I can see a basis for a rule that the jury must accept a single opinion of value OR a rule where the jury remains free to reach its own conclusion even if only one opinion is presented, I have a real problem with the current state of the law -- where sometimes the jury gets to decide and sometimes the judge directs a ...

Eminent domain cases typically revolve around one issue in dispute:  the property's (or business') fair market value.  And when appraisers seek to reach their opinions of value, they typically rely on a standard body of data:  comparable sales; income and expense figures; and reproduction costs. 

But sometimes the evidence does not fit into one of these neat boxes, either because there is a lack of "classic" evidence or because one party is seeking to adduce evidence of value in a more creative way. 

A recent published decision, City of Corona v. Liston Brick Company of Corona, 2012 Cal. App ...

One of the issues that arises with some frequency in eminent domain cases involves a debate over which parties may seek compensation for lost business goodwill.  In many cases, this is an easy discussion:  any business operating on the property at the time it is condemned generally has the right to seek compensation for lost goodwill. 

But sometimes, the situation becomes murky, and a decision this week by the Court of Appeals, Los Angeles Unified School Dist. v. Recovery Resource LLC, presents an interesting, twisted set of facts.  In Recovery Resource, LAUSD filed a condemnation action ...

As an eminent domain attorney, a litigated outcome nearly always comes with the satisfaction (or devastation) of realizing that you have won or lost.  Sure, sometimes the jury splits (in fact, that probably happens most of the time), but the result can be placed in the context of the settlement negotiations that took place leading to the trial.

A verdict much better than the settlement possibility feels like a "win" and a verdict much worse than an offered settlement understandably feels like a "loss."  It's really pretty simple.

But I have not had enough decisions to have empirical ...

Yes!  And two separate groups recently learned this fact the hard way.  On April 17, the Eastern District of California issued two separate decisions dismissing two separate inverse condemnation claims with prejudice because the plaintiffs did not have an independent property interest in the subject property.  In Abarca v. Merck & Co. (E.D. Cal. Apr. 17, 2012) Case No. 1:07-cv-0388, a group of minor plaintiffs and a group of non-owner landscape plaintiffs filed an action against the County of Merced, the Merced Irrigation District, and Merced Drainage District ...

It's common practice for government agencies and property owners to reach an agreement on the acquisition of property without the use of eminent domain.  Agencies understand the negative connotation of condemnation, along with the litigation costs involved, and right-of-way agents typically make strong efforts to negotiate a voluntary purchase.  Acquisitions are usually resolved by the parties' entering into a standard right of way contract or purchase agreement.  But once the eminent domain action is filed, attorneys like to resolve the case through the entry of judgment -- as ...

A few months ago, I had a property owner call me and explain he had recently sold his property to a utility company under threat of eminent domain.  He took the sale proceeds and invested the money in a comparable replacement property.  When he applied to transfer his Proposition 13 base year value to the replacement property, the County assessor denied his request.  The assessor explained that because the sale under threat of eminent domain was not to a public entity, it did not fall within the exception that allows for a transfer of the base year value.

I was a bit surprised by the assessor's ...

 Here's some news making headlines this week in the eminent domain community:

• The Base Year Transfer Rule Under Threat of Eminent Domain:  A new published California Court of Appeal decision -- Duea v. County of San Diego -- came out yesterday addressing whether a property owner can transfer their base year value to a replacement property when the owner sells its property to a private developer under threat of eminent domain.  The Court held that the owner had some procedural missteps which doomed the case, but also went on to hold that this type of transfer does not qualify for a base year ...

Last year I saw Win Win, a movie starring Paul Giamatti, Amy Ryan and Jeffrey Tambor.  The movie, besides receiving critical acclaim, had two hooks for me.  One, the protagonist in the movie is an attorney.  I am a sucker for almost any lawyer movie.  (I still say My Cousin Vinny is one of the best 50 movies of the past 50 years.)  And two, the movie included wrestling.  No, not the Hulk Hogan and Macho Man Randy Savage stuff.  I mean the real folkstyle wrestling that occurs every 4 years at the Olympics and at the collegiate level. 

My dad was a college wrestler, which is probably why ...

California provides a special procedural remedy whenever a lawsuit implicates a defendant's First Amendment right to petition or free speech.  The procedure is commonly referred to as the "anti-SLAPP."  (SLAPP is an acronym for Strategic Lawsuit Against Public Participation.)  Under this procedure, the trial court evaluates the merits of the lawsuit using a summary judgment like process, often at an early stage of the litigation.  In a recent unpublished decision, the California Court  of Appeal affirmed the propriety of applying this procedure when a plaintiff is ...

Shortly before an eminent domain trial, a government agency and a property owner exchange a statutory final offer and final demand. The statute’s sole purpose is to encourage settlement before trial, providing a carrot (to the property owner) and a stick (to the condemning agency). 

If the matter fails to settle before trial, the owner can seek an award of litigation expenses (i.e., attorneys’ fees and expert costs) if the court ultimately determines that, in light of the outcome, the agency’s final offer was unreasonable and the owner’s final demand was reasonable. (See ...

Over the past few years, we've seen California courts go in several different directions when it comes to admitting opinions on the value of a business' loss of goodwill in the context of an eminent domain action.  As a result, eminent domain attorneys, public agencies, and appraisers have been left shooting at somewhat of a moving target as to whether courts will be flexible on the admission of unique or unconventional goodwill opinions.  This week, the California Court of Appeal issued an unpublished decision, City of South Gate v. S&M Auto Sales, which, although not ...

Reflecting on the Golden Age of Saturday Night Live, icons such as Chevy Chase, Bill Murray, Gilda Radner, Steve Martin, Jane Curtin, and Dan Aykroyd jump to mind.  As such, it should come as no surprise that one of my favorite recurring characters has always been Emily Litella.  An old lady who would spend a minute or so railing against some ridiculous topic premised on a mistaken understanding of some headline or story, only to conclude with a sweet "never mind" after the error was pointed out to her.  In a recent per curiam decision by the United States Court of ...