Eminent Domain Report

Procedures governing eminent domain actions differ in some respects from other areas of law. Notably, all issues, except the sole issue of compensation, are adjudicated by the court. This requires the court to decide issues of law before the jury can determine compensation, complicating timing issues even where civil code sections on the matter seem straightforward.

Pursuant to California Code of Civil Procedure § 583.310, “An action shall be brought to trial within five years after the action is commenced against the defendant.” Absent a written stipulation, oral agreement ...

The Arizona Court of Appeals recently held that members of a homeowners’ association are not entitled to severance damages to their residential parcels when common areas are condemned.

Property owners in Arizona eminent domain actions are entitled to just compensation. Just compensation includes (1) “the value of the property sought to be condemned” and (2) “[i]f the property sought to be condemned constitutes only a part of a larger parcel, the damages that will accrue to the portion not sought to be condemned by reason of its severance from the portion sought to be ...

We’ve been closely watching the Sheetz v. County of El Dorado case, which has worked its way up through the California trial and appellate courts all the way to the U.S. Supreme Court. For a quick refresher, the case concerns whether legislatively enacted development impact fees (such as fees for building permits, etc.) are subject to the rough proportionality and nexus requirements (i.e., can a generally enacted permit fee be the subject of an unconstitutional taking). … 

When public projects are being constructed, surrounding property owners typically experience construction impacts, such as noise, dust, fumes, vibration and road detours.  Typically, absent a physical taking of property, those construction impacts are not compensable under an inverse condemnation claim unless the property owner experiences a direct, substantial, and peculiar impact.  While this has generally been the law in California for quite some time, a recent published California Court of Appeal decision, Today’s IV, Inc. v. Los Angeles County Metropolitan ...

Housing in California is a hot topic, particularly when the short-term rentals are thrown into the mix. Those opposed to short-term rentals often argue that it removes permanent housing stock from the market and that such rentals negatively impact communities and reduce surrounding property values due to the temporary character of the residents, constant turn-over, noise and overuse. On the other hand, short-term rentals may be an opportunity to maximize income from one’s property, and many investors purchase properties based on their income-generating potential. …

A recent Federal Circuit case, Haggart v. United States, No. 21-1660 (June 22, 2022) determined that under the Uniform Relocation Act, like other fee-shifting statutes, attorneys’ fees are not recoverable if the lawyer is one of the litigants.

Background

This case originally started as a rails-to-trails class action case out of Washington State.  A husband and wife were part of the class that alleged their property was taken.  This proceeding was brought in order to recover compensation for the taking of property by a federal agency.  The Uniform Relocation Act comes into play ...

Brad Kuhn and Jillian Friess Leivas authored the article “Eminent Domain 2021 Year in Review” for The Appraisal Journal. The article takes an in-depth look at multiple developments on the eminent domain front that occurred in 2021, including the special occasion when the U.S. Supreme Court heard two taking cases. It also examines the impact of the passage of the Infrastructure Investment and Jobs Act, which aims to provide federal funding for infrastructure projects for many years to come.

The Appraisal Journal is a publication of The Appraisal Institute, a global ...

The language in conveyance and real estate documents impacts the type of property interests that are created and conveyed and defines the scope of those interests.  The importance of documentary language was crucial in a recent unpublished California Court of Appeal case, Canyon Vineyard Estates I, LLC v. DeJoria, 2022 Cal.App.Unpub. LEXIS 3414, which discussed issues of fee conveyance, conservation easements, and subordination issues.

Background

A property owner owned over 400 acres of undeveloped land along the Santa Monica Mountains and the Pacific coastline.  The owner ...

When the government forces a property owner to sell private property, it is usually done through an eminent domain action (a direct taking), and the government is required to pay just compensation. But what if the forced sale is because the property is a public nuisance (for example, if the property is dilapidated and has code violations) -- does that constitute a taking requiring the use of eminent domain? According to a recent Court of Appeal decision, the answer is no: the forced sale of private property based on public nuisance grounds is within the government’s police powers.

In City of Fontana v. United States Bank (2022 Cal.App. Unpub. LEXIS 2127), a residence was in disrepair and the City sent the owners and their lender a notice and order to repair and abate . . . 

Generally, if utilities with the right of eminent domain cause damage to private property during the operation of their facilities, they may face inverse condemnation liability. However, where the facility in question is not operating for the “public use” and instead was installed pursuant to a private contract, inverse condemnation may be inapplicable. … 

When a property owner suffers damage as a result of the actions of a public agency or public improvement, the owner typically pursues typical tort causes of action against the agency, along with a claim for inverse condemnation. While liability for the tort claims is decided by a jury, liability for inverse condemnation is determined by a judge. So what happens when both claims are pursued simultaneously -- should the judge rely on the jury’s determination of causation, or should the judge make his or her own findings? 

Recently in Amedee Geothermal Venture I v. Lassen Municipal ...

In California eminent domain cases, appraisers typically have relatively wide latitude in determining fair market value for the property to be acquired. However, there are certain rules they must follow, and when an appraiser violates those rules, the appraiser’s opinion may be completely stricken, leaving a property owner or a public agency with no valuation evidence. This is precisely what happened in a new unpublished California Court of Appeal decision, Solano Transportation Authority v. Anderson (2021 Cal.App. Unpub. LEXIS 2129), where the property owners’ ...

Sometimes there is a case that seems to perfectly address the legal issue you are trying to make and the facts line up, but the case is unpublished. According to the California Rules of Court, rule 8.1115, unpublished cases generally cannot be relied upon. But, if you are quick enough, there is a possible way to request such cases become published.

This was a question we recently received during our 2020 Year-in-Review Eminent Domain webinar. If you weren’t able to join us during the webinar, you can still watch the recording here. Also, keep an eye out for other Nossaman webinars, as ...

While nobody could have anticipated the challenges of 2020, the right-of-way industry worked through difficult issues to move critical infrastructure projects forward. On February 11, 2021, our Eminent Domain & Valuation Group presented “Eminent Domain in 2020: A Year in Review,” during which we discussed decisions in key cases and trends from California and around the country that will continue to impact the right-of-way industry going forward. If you were not able to attend the live session, we invite you to watch the on-demand presentation at your convenience. 

On November 27, 2019, U.S. Bankruptcy Judge Dennis Montali issued a Memorandum Decision on Inverse Condemnation (“Memorandum Decision”) in PG&E Corporation and Pacific Gas & Electric’s (together, “PG&E”) Chapter 11 Bankruptcy proceeding in the U.S. Bankruptcy Court for the Northern District of California (Case No. 19-30088).  PG&E challenged the application of the doctrine of inverse condemnation in connection with the 2015, 2017, and 2018 California wildfires.  In the Memorandum Decision, Judge Montali ruled against PG&E and instead concluded that the doctrine ...

In a recent published decision, the California Court of Appeal had the opportunity to address this issue when the property owners of a beachside residence in the City of Los Angeles challenged a setback condition that the California Coastal Commission imposed on their proposed home remodel.  (See Greene v. Cal. Coastal Com. (Oct. 9, 2019) Case No. B293301.)

Background

Under the Coastal Act, property owners are required to obtain a Coastal Development Permit for “development” within the coastal zone.  “Development” is defined very broadly in the Coastal Act, and includes ...

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 ...

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 ...

It’s a Friday afternoon and I decided to take a quick look at the advance sheets for any newly decided appellate cases involving eminent domain. My search revealed an unpublished decision that came out yesterday (September 7, 2017) called Sacramento Area Flood Control Agency v. Souza, 2017 Cal. App. Unpub. LEXIS 6117. I’ll provide the highlights below.

Facts:

This matter involved an acquisition by the Sacramento Area Flood Control Agency (SACFA) of approximately 2.2 acres of land for the Natomas Levee Improvement Program. The acquisition was needed to widen the levee along ...

Under inverse condemnation law in California, a public agency is generally strictly liable for physical damage to private property caused by a public improvement.  This means a public agency can be held liable even if the public improvement was properly designed, constructed and maintained.  Rarely is there a question of whether a project constitutes a "public improvement," but in Mercury Casualty Co. v. City of Pasadena (Aug. 24, 2017), the Court of Appeal recently addressed this issue and held that a tree constitutes a work of public improvement for purposes of inverse ...

When a business is taken as a result of a public improvement, the business is entitled to seek compensation for, among other things, loss of business goodwill. Typically, this loss is calculated by measuring the business’ before-condition value and comparing to its after-condition value.  This traditional methodology was the cornerstone for business goodwill appraisers to determine just compensation.  Yet late last year, the California Court of Appeal issued a ruling in People ex rel. Dep't of Transp. v. Presidio Performing Arts Found. (2016) 5 Cal. App.5th 190 which may have ...

Every year or so, a new appellate court decision comes out addressing the proper role of the judge versus the jury on some certain eminent domain issue. Most recently, a trial court, appellate court and the California Supreme Court all grappled with this question:  Does the judge determine whether a dedication requirement is constitutional, or does the jury?  Yesterday, the Supreme Court issued its decision in City of Perris v. Stamper, No. S213468 (Aug. 15, 2016) holding that it is the role of the judge to determine whether a dedication requirement is constitutional.  The ...

In an unpublished opinion filed this week, the California Court of Appeal confirmed two fundamental evidentiary rules related to eminent domain matters:

1. A witness intending to testify to an opinion of value must exchange a statement of valuation data; and
2. A witness will be precluded from testifying to a comparable sale if it is determined by the court that the comparable is not comparable and would confuse the jury.

Before we delve into the case, here’s a basic reminder of California law as it pertains to these two issues:

With respect to the court’s first finding, California Code of ...

The U.S. Supreme Court's decision last year in Koontz v. St. John's River Water Management District received quite a bit of national coverage in the development world.  If you'll recall, Koontz held that the nexus and proportionality standards that apply to the government's attempt to exact land in exchange for a land use permit similarly apply to monetary exactions.  While the decision may have caused a change in the entitlement process in other states, this was generally already the rule in California under the Mitigation Fee Act.  So deciphering just how Koontz would impact ...

During a windstorm, a tree owned by the City of Pasadena fell on Mr. O’Halloran’s residence, causing damage to his home. Mercury Casualty Company paid Mr. O’Halloran for the damage pursuant to his homeowner’s insurance policy, and then sued the City for inverse condemnation and nuisance based on the damages caused by the City’s tree.

Inverse Condemnation

To state a cause of action for inverse condemnation, the plaintiff must allege that defendant substantially participated in the planning, approval, construction or operation of a public project or improvement which ...

Valuing mineral rights in eminent domain proceedings is inherently speculative and can lead to wide swings in property valuations.  So how do appraisers best deal with the uncertainty involved in mineral exploitation?  The California Court of Appeal recently provided some guidance in San Diego Gas & Electric Company v. Arnold J. Schmidt et al. (2014) 2014 Cal. App. Unpub. LEXIS 5090.  

In Schmidt, the Court allowed the introduction of the property owner’s appraiser’s valuing 115 acres of vacant in San Diego based on the projected future income the property would generate for mining ...

If you ask ten attorneys what keeps them up at night, at least six of them will recount nightmares about missing a filing deadline.  I know what you're thinking.  How hard can it be?  You just look in the Code, find the applicable limitations period, and then you're off.  However, as with all things law related, it very rarely is that simple.  In a recent decision issued by the Second Appellate District, the court explained why filing deadlines are not the only thing practitioners should have nightmares about.  In Excelaron, LLC v. County of San Luis Obispo

"Motions in limine" are motions made shortly before trial, and they're typically filed in an attempt to limit the introduction of evidence to the jury.  They are a powerful tool in eminent domain proceedings, and can be used to limit an appraiser's comparable sales, valuation methodology, or even the expert's entire testimony.  In a recent unpublished California Court of Appeal decision, Verizon of California v. Carrick (2014 Cal. App. Unpub. LEXIS 5030), the Court even approved of the use of an in limine motion to determine whether a party had a compensable interest in the property ...

Californians who have owned their properties for years understand the benefits of Proposition 13: their property taxes are based upon the property's purchase price (with only small allowable annual increases), as opposed to the property's current value.  But upon a transfer, the property gets reassessed at its current value.  Consequently, people in California often wind up with higher property taxes when they sell one property and buy another, even if the new property costs exactly what they received for the sale of the old property.

When an owner is forced to "sell" as a result of the ...

Just a few months ago, the California Court of Appeal handed down a significant decision in Property Reserve v. Superior Court which nearly eviscerated public agencies' ability to make use of the statutory "right of entry" procedure to gain access to private property to conduct any significant investigations and testing.  The Court held that any notable physical intrusion onto private property constituted a taking, meaning the public agency needed to proceed with an eminent domain proceeding.  The decision caused an uproar among public agencies across the state.  Well, pump the ...

In June of last year, the U.S. Supreme Court issued a unanimous opinion in Horne v. Department of Agriculture holding that California raisin handlers could assert a takings claim as an affirmative defense to an enforcement action filed by the United States.  I am happy to point out that in our analysis of the Supreme Court's decision, we explained that "[n]o court has yet found that the Hornes were subject to an unconstitutional taking; rather, the Supreme Court merely held that the jurisdictional argument relied on by the Ninth Circuit to avoid a decision on the merits was ...

Last week, the Court of Appeal issued a decision that may be one of the ones we look back on as among the most significant of 2014 (at least in the world of eminent domain).  For years (and certainly for the entire 20 years I've been doing this), public agencies have utilized a statutory "right of entry" procedure to gain access to private property to conduct investigations and testing before deciding whether to move forward with a condemnation action.  (See Code of Civil Procedure section 1245.010 et seq.)  Often, this happens during the CEQA process, as agencies try to assess the ...

On March 7th, a U.S. District Court sided with the Federal Aviation Administration (FAA) on whether the Uniform Relocation Act (URA) provides private property owners with a private right of action: it does not.  The Pacific Shores Property Owners Association sued the FAA over improvements the Border Coast Regional Airport Authority is required to make to a regional airport, Del Norte County Regional Airport, also known as Jack McNamera Field.  To meet the FAA's runway safety standards, the Authority had to close roads and acquire nearby lots to make up for the wetlands lost as a result ...

In the latest in a string of recent U.S. Supreme Court cases that impact right of way issues, on Monday the Court issued its opinion in Marvin M. Brandt Revocable Trust v. United States (Case No. 12-1173, March 10, 2014).  The issue in Brandt involved whether the U.S. Government retained a reversionary interest in the easements it granted to railroads pursuant to the General Railroad Right-of-Way Act of 1875. 

The decision would impact, in particular, the "rails-to-trails" program, designed to convert old, abandoned railroad rights of way to bike trails.  Under the program, the ...

As we reported last month, the United States of America and the Federal Aviation Administration had filed a motion to dismiss a lawsuit brought by the City of Santa Monica in federal court seeking to confirm its alleged right to control the fate of the Santa Monica Airport.  Yesterday, the federal court threw out the City's lawsuit, holding that:

• The Quiet Title Claim was time-barred;
• The takings claim had to be brought before the United States Court of Federal Claims pursuant to the Tucker Act; and
• The Tenth Amendment and Fifth Amendment Due Process Claims were not ripe.  

The federal court ...

I saw a couple of California redevelopment-related stories over the past week that seemed worthy of at least a brief comment.

First, a court decision involving a rather bold argument by a public agency.

The City of Loma Linda, like so many California cities, used to have a redevelopment agency.  That redevelopment agency acquired property and embarked on various efforts to, well, redevelop things.  When Governor Brown eliminated California's redevelopment agencies, many projects were left in mid-stream.

In the case of Loma Linda, the redevelopment agency purchased some ...

Earlier this month, the California Court of Appeal answered a question that had been outstanding for almost two decades: What standard of review applies to beneficial spot zoning? In Foothill Communities Coalition v. County of Orange, that question was finally answered when the Court held that beneficial spot zoning will be valid only when the record demonstrates that the zoning is "in the public interest."

In 1996, Associate California Supreme Court Justice Stanley Mosk stated in a concurring decision that although courts are traditionally deferential with respect to zoning ...

Landowners routinely have to give up something in return for a government agency’s granting a discretionary permit. However, there are limits, as the government agency cannot typically demand conditions that are not proportional or related to the impacts that would be created by the proposed project. These limits are referred to as the nexus and rough proportionality standards set forth in the well-known United States Supreme Court cases of Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S. 374.

In Powell v. County of ...

On October 31, 2013, the City of Santa Monica filed a complaint in federal court against the United States of America and the Federal Aviation Administration ("FAA") with the hope of confirming its alleged right to control the fate of the Santa Monica Airport.  Both sides agree that:  (i) the City leased the airport property to the United States in 1941 to support the war effort, (ii) the United States made substantial improvements to the property, (iii) the United States terminated the lease in 1948, (iv) the 1948 instrument terminating the lease contained a reversionary clause, and ...

In the second flooding decision issued by the U.S. Court of Appeals for the Federal Circuit in the past two weeks, the court held that there was no physical taking because the property was never actually flooded and no de facto taking because no federal entity or regulation prohibited the plaintiffs from using their property.  (See Stueve Bros. Farms, LLC v. United States (No. 2013-5021, Dec. 11, 2013).)

In 1941, the U.S. Army Corps of Engineers completed the construction of the Prado Dam on the Santa Ana River near Corona, California.  Because the Army Corps anticipated that operation of ...

As you may recall, last December we reported on the U.S. Supreme Court's decision in Arkansas Game and Fish Commission v. United States, in which the Supreme Court held that government-induced flooding of limited duration may be compensable.  (See Supreme Court Holds Temporary Flooding Can Be A Taking.)  The Supreme Court explained that the relevant factors in determining whether a temporary flooding rises to the level of a compensable taking include:  (i) the degree to which the invasion is intended or is a foreseeable result of authorized government action, (ii) the ...

In August, I reported on the decision in City of Perris v. Stamper, in which the Court of Appeal weighed in on the ever-shifting line dividing the judge and jury's roles in eminent domain cases. At the time, I poked a bit of fun at a former colleague,Rick Friess, who won the appeal but was still complaining that the Court didn't see everything exactly his way.

Well, it appears that my good friend hasn't quite given up yet. Last week, the California Supreme Court decided to hear the case, meaning Rick will have one more crack at his dedication argument. The Supreme Court is limiting its review to ...

Yesterday, the California Supreme Court decided one of two pending cases dealing with inclusionary housing, holding that when a public agency requires a developer to convey units at below market rates and make substantial cash payments, the developer may challenge these conditions under the California Mitigation Fee Act.  (Sterling Park v. City of Palo Alto (Oct. 17, 2013) 2013 Cal. Lexis 8112.)  The California Supreme Court’s decision clarifies the scope of the Mitigation Fee Act, confirming that inclusionary in-lieu fees are subject to the essential nexus and rough ...

Eminent domain actions are unique in that "the court, rather than the jury, typically decides questions concerning the preconditions to recovery of a particular type of compensation, even if the determination turns on contested issues of fact."  (See Emeryville Redevelopment Agency v. Harcros Pigments, Inc. (2002) 101 Cal.App.4th 1083, 1116.)  This is consistent with the general rule in eminent domain that the jury’s role is only to determine the amount of damages, leaving other questions to be resolved by the Court.  While these factual disputes are typically decided by the judge ...

The Supreme Court is apparently not done with its recent interest in takings decisions.  Following the decisions in Arkansas Game and Fish Commission v. United States,  Horne v. Department of Agriculture, and Koontz v. St. Johns River Water Mgmt District, the Supreme Court announced today that it will hear another takings case, Marvin M. Brandt Irrevocable Trust v. United States.  The Supreme Court's blog describes the issue in Brandt as follows:

Whether the United States retained an implied reversionary interest in rights-of-way created by the General Railroad Right-of-Way Act of ...

Property owners are routinely hiring attorneys well in advance of a public agency's filing of an eminent domain action.  Many times, the representation begins before it is even certain whether the agency will actually move forward with acquiring the property.  And sometimes, claims for inverse condemnation may ripen during the public agency's construction of the project on other nearby properties.  When this overlap exists between inverse condemnation and potential future eminent domain actions, owners should be careful to assess how the attorney will be compensated.  A recent ...

As reported by our colleague Robert Thomas on inversecondemnation.com, the California Supreme Court granted the California Building Industry Association's (CBIA) petition for review in California Building Industry Association v. City of San Jose.  The case will be the first test in California post-Koontz on whether the nexus/proportionality requirements apply to general regulations such as affordable housing exactions.

The CBIA filed the petition after the Court of Appeal for the Sixth Appellate District reversed and remanded the Superior Court's decision ...

Eminent domain cases typically revolve around a "date of value" – the date on which property is valued in determining the amount of just compensation the condemning agency must pay.  That date is set by statute; typically, it is the date on which the agency deposits the amount of "probable compensation" to be awarded.  But sometimes, the agency's activities, such as project planning and acquisition efforts, negatively affect the value of the property.  In such circumstances, property owners may attempt to hold the agency responsible for such declines in value by claiming (1 ...

I'll give you a hint, this is a bit of a trick question.  Give up?  Okay.  Whenever you name a State agency, of course. 

In Lavine v. State of California (pdf), a property owner filed a lawsuit after the Regional Water Quality Control Board adopted, and the California State Water Resources Control Board approved, a ban on on-site septic systems in Malibu.  (Case No. B238030, Aug. 20, 2013, Unpublished.)  The plaintiff owned a single-family residence in Malibu that utilized an on-site septic system; no public sewer system was available to residences in the area.  Although the ...

Eminent domain attorneys struggle with a concept foreign to most civil litigators:  figuring out the roles of the judge and jury.  Even most non-attorneys know the basic rule of trial:  the jury is the "fact-finder."  But in eminent domain cases, things are a bit different. 

The jury still acts as fact-finder, but only in one arena:  the quest to determine the amount of just compensation to which the owner is entitled.  This narrow scope means that the judge ends up ruling on all issues of law, plus mixed issues of fact and law, plus pure issues of fact to the extent those issues don't go to the issue of ...