Eminent Domain Report

We’ve reported in the past that public agencies are more frequently demanding certain off-site public improvements to accommodate proposed private developments as a condition of entitlement approval.  These can range from street widenings to accommodate additional traffic, pump stations for additional water capacity, or flood improvements to address drainage or run-off concerns.  Additionally, a new condition facing California developers is dedicating or acquiring open space to mitigate wildfire risk.    

Recently, the owner of a mixed-use development project in San Diego ...

When a property owner brings a regulatory taking / inverse condemnation claim based on a city or county’s zoning decisions, the owner often provides context and history, including public statements made by staff, board members or city council members.  Are those public statements protected speech and therefore subject to California’s Anti-SLAPP statute?  A recent California Court of Appeal decision, City of Redondo Beach v. 9300 Wilshire, provides some context on what is and what is not permissible.  … 

Aleene Madikians and I recently authored the article “Mitigating Damages—Condemning Replacement or Substitute Property” for the May/June 2024 issue of the International Right of Way Association (IRWA) newsletter, Right of Way. In the article we discuss, among other topics, severance damages from 'partial takings'. … 

Dodge, duck, dip, dive and… dodge. An interesting case from the United States Supreme Court yesterday. Interesting because of what it says, and interesting because of what it very explicitly declined to say.

The question presented in DeVillier v. Texas, 601 U.S. ___ (2024) was whether the Takings Clause of the Fifth Amendment was “self-executing”. That is, whether a landowner could sue a State for money directly under the Takings Clause, even if there is no statute specifically creating a cause of action (and where the closest statute very expressly does not provide a remedy ...

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. … 

Local governments—generally counties—impose property taxes on real estate pursuant to state law. Sometimes called ad valorem taxes, these property taxes are set based on the assessed value of the property. When a landowner does not pay their property tax, the law allows the county to foreclose on the property and sell it to another person.

The purpose of this sale is to make the county whole for the tax debt. In most states, if the property sells for more than the debt and there are excess proceeds, then the landowner receives the surplus after valid lienholders with priority are ...

With all the recent storms in California, private property is bound to suffer impacts from storm water runoff, landslides, erosion and subsidence. Understanding whether the government bears responsibility for such damage is a complex and fact-specific analysis. However, a recent court of appeal decision, Shenson v. County of Contra Costa (2023 Cal. App. LEXIS 244), provides an excellent history on liability in these circumstances, and explains when natural watercourses, drainage improvements, and a public agency’s approval of development can trigger inverse ...

Despite undertaking due diligence, a buyer of real estate may miss pre-existing property damage or a public improvement that was installed without permission or right.  Does the new buyer have a cause of action for a taking -- or inverse condemnation -- for such pre-existing conditions?  The answer is most likely no, as purchasing property does not include the transfer of a takings claim, which remains with the owner of the property absent a clear intent to assign the claim.  A recent case in Los Angeles Superior Court, Ncp Imperial v. State of California (2022 Cal. Super. LEXIS 60513), highlights ... 

Local government agencies sometimes enact short-term building moratoriums for certain areas to further assess changes in land use patterns or slow growth.  Those moratoriums imposed across a large area usually do not constitute a taking.  But what if a moratorium is imposed solely and specifically as to a singled-out property?  Does that moratorium give rise to a taking?  According to a recent court of appeal opinion, the answer is no, at least when that moratorium is imposed as a penalty against the property owner for violating local building codes.

Background

In Lemons v. City of Los ...

An update to our original 2011 post

As we have previously discussed, downzoning (changing the zoning designation for property from a more intensive use to a more restrictive use) can possibly rise to the level of a regulatory taking, depending on each individual situation. A recent case, FFV Coyote LLC v. City of San Jose, 2022 U.S. Dist. LEXIS 195036, analyzed this issue at the motion to dismiss stage and concluded that the plaintiffs had sufficiently plead a Fifth Amendment regulatory takings claim to survive a motion to dismiss.

Background

Plaintiffs own property in San Jose ...

In the most recent biannual report from the Real Estate Law Committee of the International Right of Way Association, we collaborated with Robert Thomas and Ajay Gajaria to examine numerous cases at local, state and federal levels from January to the end of May 2022 that are of interest for professionals in the right-of-way industry.

In the report we also take a brief look at pending, failed and adopted legislation, while also providing updates on federal funds that have been or have yet to be allocated through the recent Infrastructure Bill. The report also provides a breakdown of ...

A new decision out of the Northern District of California applying the “final action” standards of Pakdel v. City and County of San Francisco has come out – with the District Court concluding that even under Pakdel’s “relatively modest” standard, a landowner seeking to develop their property must still actually receive a final decision on the merits of their proposal before filing a takings claim in federal court.  The new case is DiVittorio v. County of Santa Clara, and the opinion by the Hon. Beth Labson Freeman helps further clarify the steps a landowner must satisfy before availing themselves of the federal court system ...

In Knick v. Township of Scott, 139 S.Ct. 2162 (2019), the Supreme Court reversed over three decades of precedent when it eliminated the requirement that a plaintiff exhaust state court remedies before pursuing a takings challenge in federal court.  After the Supreme Court’s decision, federal courts experienced a significant uptick in the number of federal takings lawsuits.  In Gearing v. City of Half Moon Bay, the City was able to convince the federal court to take a back seat and allow a later-filed state court eminent domain action to proceed while the federal takings lawsuit was put ...

With the recent flurry of coastal law bills before the California State Legislature and the myriad headlines advising that we must retreat from the shore, sea level rise (SLR) and related climate change topics remain front and center in California. Join our Water Industry Group on May 27, 2021 from 11:00 a.m. to 12:00 p.m. PT for "Living on the Edge: Managing Sea Level Rise in California" as we sort through the pending legislation and discuss the basis for this ever-increasing concern with the encroaching ocean.

Comprised of attorneys from Nossaman’s Water, Environment & Land Use and ...

In order for a property owner to successfully pursue a regulatory takings claim for inverse condemnation, the owner is typically required to pursue multiple different development options, and face multiple permit denials, before a claim will be ripe. However, a recent California Court of Appeal opinion, Felkay v. City of Santa Barbara, 2021 Cal.App. LEXIS 225, held that “multiple applications are not required where the permit denial makes clear that no development of the property would be allowed under any circumstance.”

Background

In this case, a property owner applied to ...

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. 

We have been following for some time now the COVID-19 takings lawsuits that have been popping up since California’s first closure orders. As we previously reported, these cases did not seem to be making much traction in the courts. However, one ongoing case in the United States District Court for the Southern District of California may be trending in the opposite direction.

In the case of Bols v. Newsom (2021 U.S. Dist. LEXIS 15237), Plaintiffs’ businesses (commercial landlord, hair and nail salons) were deemed non-essential per the public health orders and experienced the ...

Yes, but the sea might beat them to it. In 2015, the California Coastal Commission adopted the Sea Level Rise Policy Guidance. This Guidance document discusses a number of potential measures for responding to sea level rise, including "managed retreat." As explained in the Guidance document, "[r]etreat strategies are those strategies that relocate or remove existing development out of hazard areas and limit the construction of new development in vulnerable areas." Examples of retreat strategies include the acquisition and buy-out of "threatened" properties. While many ...

Last year, the United States Supreme Court made headlines (at least in our eminent domain world) by issuing a ruling in Knick v. Township of Scott that property owners can bypass the state courts and directly file a Fifth Amendment takings claim in federal court (you can find our write-up on Knick here).  This was a stark shift from prior law, which held that a property owner had to first finalize their pursuit of compensation through any applicable state procedures.  We are still feeling the effects from the Supreme Court's holding, but one question that has been raised is how does the ...

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 ...

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 ...

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 ...

Downzoning property is always a thorny issue:  on the one hand, zoning changes are typical, "police power"-type governmental activities; on the other hand, they can significantly impact property values, and in some cases can result in governmental takings liability.  When a property owner experiences a change in zoning, there are typically two theories that can be pursued:  one is so-called "spot zoning," and the other is a regulatory taking.  

Under the first theory, "spot zoning," a property owner can have a zoning designation invalidated if it can prove the government targeted the ...

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 ...

It appears the raisin handlers' luck in the recent U.S. Supreme Court decision Horne v. US Department of Agriculture has spawned a new federal takings challenge by another group of fruit growers.  This time it's a group of tomato growers asserting a takings challenge against the federal government, with a bit of a twist.  (And yes, I had to check, but both raisins and tomatoes are technically fruits -- see the things you learn?)

According to an article in the Packer, Tomato growers say eminent domain applies to 2008 crop, tomato growers are suing the federal government for $40 million in ...

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. 

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 ...

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 ...

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 ...

Earlier this week, I spent a day in Los Angeles at a seminar involving regulatory takings issues. It featured a great panel of speakers on a variety of takings, eminent domain, and land use issues. (In fairness, you should view my characterization of the panel's quality with some skepticism; I was Co-Chair of the seminar and therefore played a large role in assembling the panel.)

There were a number of quality take-aways from the day, but a few stood out for me. 

• Mark Alpert of Hart, King & Coldren spoke on a number of regulatory takings issues, focusing in particular on the ...

A new Court of Federal Claims opinion was handed down this month coming right out of our own Southern California backyard.  The case, Stueve Bros. Farms, LLC v. the United States, deals with whether a "physical taking of title" has occurred when a government agency's activities create a risk of flooding.  The answer, according to the Court, is no.

Stueve Bros. Farms owns property in San Bernardino County within the Prado Dam Flood Control Basin.  In the 1940's, the federal government condemned flowage easements over the property to an elevation of 556 feet above sea ...

The California Court of Appeal recently issued an unpublished decision, Ridge Properties v. County of Riverside Flood Control and Water Conservation District, which addresses whether a government agency's failure to pay an agreed amount of compensation gives rise to a claim for inverse condemnation.  The answer is "no."

In Ridge Properties, a property owner planned to develop an industrial park in Riverside County.  The conditions of approval for the project required the owner to dedicate some of its property and construct a drainage or flood control facility to protect ...

Yesterday, we wrote about the Avenida San Juan Partnership v. City of San Clemente decision.  For more information on the decision, see the following:

• Man Bites Dog! California Property Owner Wins Regulatory Taking Case in the California Court of Appeal, a blog post by Gideon Kanner on Gideon's Trumpet;
• Either Reverse Your Unconstitutional Spot Zoning, Or Pay. Your Choice, by Robert Thomas on his inversecondemnation.com blog; and
• Eminent Domain: Winning Owner In Inverse Condemnation Battle Cannot Recoup Fees By Attorney Owner Or Reap A Fee Multiplier Request, a piece in ...

Last April, we reported on a bizarre case arising out of the City of San Clemente's attempt to down zone a piece of property.  The trial court had concluded that the down zoning constituted a taking and ordered the City to rescind a decision supported by that down zoning.  The City had denied an application to develop the property because the application did not conform to the current general plan and zoning ordinance (the City seems to have sidestepped the fact that the development applications included applications to amend the general plan and zoning). 

In addition to a writ of mandate ...

The use of eminent domain in a declining real estate market presents a number of unique issues.  I often receive calls from property owners who are frustrated with the government's timing of condemnation proceedings, and want to know how they can get market-peak-values for their property. 

This issue was the hot topic of a previous IRWA seminar I chaired, Property Acquisition, Appraisal, and Relocation in an Upside Down Market.  And a recent blog post by the Weiss Serota Helfman law firm, Eminent Domain Valuation in a Falling Market Poses Questions for ...

We've covered in the past regulatory takings claims and the benchmark three-prong Penn Central test for analyzing potential liability.  We've also noted the issues involved in consistently applying those factors, and the resulting unpredictibility in evaluating the merits of potential regulatory takings claims.  

William Wade, Ph.D., a resource economist with the firm Energy and Water Economics, often writes about these issues, offering clearly articulated potential solutions to dealing with these Penn Central issues.  And Mr. Wade has done it again, as his recent ...

It is common practice for government agencies to condition approval of large developments on providing off-site public improvements.  Road widenings, park dedications, etc., are all too familiar for California developers.  When those improvements require others' property, many times the government agency utilizes eminent domain on the developer's behalf (with the developer footing the bill).  But what if the agency refuses?

According to an Inside Self-Storage article, "Derrel’s Mini Storage Owner Battles City, Homeowner in CA Self-Storage Eminent Domain Case," a ...

Anyone who's ever been involved in real estate development knows that as part of the permit approval process, developers are routinely required to make concessions to the government in order to move forward with proposed development plans.  And, if you're building near the coast, you usually need to jump through even more hoops (sometimes backwards and through fire) to please the Coastal Commission.  But when do the demanded concessions go too far?

We've covered in the past the "rough proportionality" and "nexus" requirements that development conditions must ...

Access impairment disputes must be the hot topic.  I just wrote about the Wardany access impairment case, and now another similar dispute is brewing in the City of Temecula.  This one may be a bit more interesting.

According to a North County Times article by Aaron Claverie, TEMECULA: City looks ready to fight eminent domain suit, Old Town property owners Charles and Sylvia Hargis have filed an inverse condemnation action against the City of Temecula due to the City's purportedly closing off access to the Hargis' coffee shop during construction of the City's $70 million ...

When analyzing potential liability for a regulatory takings claim, most land use and eminent domain attorneys immediately look to the three-prong test set forth by the U.S. Supreme Court in Penn Central Transportation Co. v. New York City (1978) 438 U.S. 104.  Those three factors include:

• the economic impact of the regulation;
• the extent to which the regulation has interfered with distinct investment-backed expectations; and
• the character of the government's regulation.

Unfortunately, it's much easier said than done.  Practitioners and courts alike have struggled ...

We've been following the Guggenheim case for more than a year now, and in the last week or so, there have been a number of developments.  As a quick recap, this decision by the Ninth Circuit Court of Appeals held that the City of Goleta's rent control ordinance - which had the effect of transferring the vast majority of a mobile home park's value from the park owner to the tenants - did not constitute a taking.  The decision followed an earlier decision by a different panel of the same court, in which the court held that the ordinance did qualify as a taking. 

Not surprisingly, the owner then sought ...

A new bill -- AB 238 -- is working its way through the State Assembly which would require a reduction in compensation payable to a successful plaintiff in an inverse condemnation action in direct proportion to the owner’s percentage of fault in causing damages to the owner’s property.  While the doctrine of comparative fault is one of the cornerstones of tort law, it is rarely applicable to inverse condemnation actions. 

Ever since the seminal decision in Albers v. County of Los Angeles (1965) 62 Cal.2d 250, there has been a more or less bright line distinction between the strict ...

We've reported on a number of rent control regulatory takings claims making their way through the court system, most notably the Guggenheim v. City of Goleta case.  Apparently, some cities and counties are fed up with the onslaught of challenges to their rent control ordinances, and they're looking for a way to recoup the attorneys' fees they expend in preserving the ordinances. 

According to an article in the Santa Cruz Sentinel, "Monning researching bill to address rent control lawsuits," Assemblyman Bill Monning looks to address this concern by considering a bill ...

In case you missed it, in the news last month was a big story about the San Diego County Sheriff's Department torching a residence in Escondido as the only safe way to destroy a giant cache of explosives found in the house.  The house was burned to ashes in an effort to destroy the extremely volatile chemical compounds which could detonate at any second.  The house has since been dubbed, simply, the "Bomb House."

So what does this have to do with eminent domain?  Interestingly, the individual responsible for the explosives was a renter (who is now in jail), and the property owner -- who had no idea ...

We've reported in the past about some of the regulatory takings issues created as a result of the Western Riverside County Regional Conservation Authority's ("RCA") efforts to conserve property pursuant to the Multiple Species Habitat Conservation Plan ("MSHCP").  It now appears that those conservation efforts have created quite the turmoil with citizens in the City of Murrieta.

According to a recent North County Times article, "MURRIETA: Landowners frustrated with conservation board, city leaders who refuse to meet," about 100 members have organized a group called the ...

An interesting battle is raging in the Santa Ynez Valley.  Mattei's Tavern, a "landmark" in Los Olivos for more than 100 years, is slated for a redevelopment plan by its owner.  A local activist group, known as the Valley Alliance, wants to stop the owner's plans.  And one arrow in their quiver has been to nominate the tavern for listing as a historical landmark. 

According to an April 29 article by Kathy Cleary in the Santa Ynez Valley Journal Valley Alliance Historic Landmark Nomination:  Eminent Domain Takeover?, the purpose of the nomination is to give the Historic Landmark Advisory ...

Earlier this month, I reported on a Florida case now pending before the U.S. Supreme Court, Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection.  Earlier this week, I reported on some other property-rights issues currently in the news. 

Yesterday, one of my partners, Howard Coleman, took things a step further, attempting to tie recent property-rights issues into a big picture view of what it all may mean for California property owners.   

His piece, Sea Level Rise and Coastal Boundary Lines – Consequences of Climate Change, examines the Florida case ...

A year or so ago, I attended a three-day symposium on regulatory takings that was held at Stanford University. At the end of the symposium, the final panel of speakers was asked to predict what the United States Supreme Court might be doing in the area of takings over the next couple of years. The answer of at least one panelist was essentially nothing. In his view (at least as I understood it), the Supreme Court had been grappling with various takings issues for years without coming up with particularly workable formulas and was done trying.

Well, based on an article in the Los Angeles Times ...

The Cato Institute's blog has an interesting post concerning the government's ability to induce local government agencies to enact tougher zoning standards that decrease the value of property which the government may want to acquire in the future. 

The post, titled "A Special Kind of Eminent Domain Abuse," deals specifically with the federal government's actions with respect to property it has contemplated acquiring for 30 years in order to expand the Everglades National Park.  The post  by Ilya Shapiro reports that in the case of 480.00 acres of Land v. United ...