Eminent Domain Report

In California, when a government entity adopts a resolution of necessity to acquire property by eminent domain, that resolution typically “conclusively” establishes the requisite findings of public use and necessity. However, when the government is seeking to condemn a public utility to take over its operations, that conclusive presumption disappears. There has been an ongoing dispute about what standard of review applies in such take-over cases, and the California Court of Appeal recently provided guidance. … 

In an eminent domain proceeding, tenants of property subject to condemnation have constitutional rights to just compensation. However, those rights can be assigned to the landlord through a lease agreement. A recent unpublished Court of Appeal decision confirmed that commercial tenants can assign all claims to just compensation through the terms of a lease agreement ...

We've completed our analysis of the Galardi case and have some additional thoughts about the decision and its potential larger impact.

The real debate we've been having internally is whether Galardi can be read as signaling a change in the law concerning broadly worded waivers in condemnation clauses.  Many commercial leases contain broad waivers, skewed towards landowners.  Provisions such as "in the event of condemnation, tenant waives all rights to compensation" are not uncommon.  

Until now, even the broadest wavier imaginable has not affected the tenant's right ...