Eminent Domain Report

When the California Supreme Court issued its ruling on Property Reserve v. Superior Court, handing a substantial victory to public agencies, we were given three key takeaways:  (1) the Right of Entry statutes (CCP §1245.010 et seq.) are constitutional, (2) the activities the Department of Water Resources sought to undertake are covered by the broad scope of these statues, and (3) if the language of a statute doesn’t match your planned opinion, you can always reform it to match the claimed legislative intent of the statute.

To that last point, the Court’s opinion included its reformation of the right of entry procedure to include a jury trial to determine compensation for any losses caused by the entry on property and activities undertaken thereon. Thereafter, the case was remanded back to the appellate court for further proceedings and the happenings on remand have been all but ignored, though were important.  Since the Supreme Court likened the right of entry process to an expeditious condemnation proceeding, it only makes sense that discovery is part of the process as well.

Indeed, on December 16, 2016, as an early Christmas gift, the Court of Appeal gave California public agencies a more complicated and expensive right of entry procedure when it held that a property owner has a right to discovery from the public agency during the process.  In an opinion that was largely a reiteration of the higher court’s ruling on the main constitutional issues, the appellate court held that both Eminent Domain Law and the Civil Discovery Act allow a property owner to conduct discovery, disagreeing with the trial court’s ruling that the right of entry statutes were exempt from discovery.  The petition for entry process is a condemnation proceeding and as such, is governed by rules of practice that govern civil actions, which include traditional discovery rules.    (It also made some ruling or other about indispensable parties … see page 15 of the opinion.)

The Fate of Young’s Market Co.

While the Property Reserve remand opinion got very little notice, the higher court opinions on Young’s Market Co. v. San Diego Unified School District were pretty much ignored.  If you recall, the Supreme Court granted review of Young’s Market and tied it to the fate of Property Reserve stating that Further action in this matter is deferred pending consideration and disposition of related issues in Property Reserve v. Superior Court…

On October 16, 2016, the Supreme Court remanded the matter to the appellate court and instructed the court to vacate its decision and to reconsider in light of Property Reserve.  And on January 17, 2017, in an unpublished decision, the court held that, as it had decided previously, the actions of the school district were authorized by the right of entry statutes and that the activities on the parcel were temporary and did not constitute a permanent, physical occupation of the property.  The appellate court stuck with its prior ruling – that the activities were acceptable – and pretty much left it at that.

Conclusion

We have yet to see how public agencies and property owners will utilize the Property Reserve opinion to their own advantage, whereas owners may try to drag out the petition proceedings and game the system for increased compensation and leverage – delays in testing can lead to delays in environmental documents, which can lead to delays in project approvals, which can lead to delays in construction timing (resulting in delay damages to the contractor), which can lead to increased project costs and compensation to owners, etc., agencies may try to increase the character, intensity or duration of activities they seek to carry out on private property – as long as owners get their day in court in a condemnation proceeding, we should be allowed to do whatever testing we want.  Only time will tell how this will play out but needless to say, the owners winning on the discovery issue pales in comparison to the slam dunk handed to public agencies in Property Reserve.