California Eminent Domain Report : a blog following condemnation, inverse condemnation, and regulatory takings written by attorneys with Nossaman LLP.

Next week, Chapter 67 of the IRWA (Orange County) is holding its annual Past Presidents' lunch.   The lunch will feature speaker Randall S. Stamen, an International Society of Arboriculture Certified Arborist -- and an attorney.  In case the really long title is slowing you down, I think that means he is a tree expert and, in particular for the IRWA's purposes, that he has expertise in dealing with relocation and valuation of trees impacted by eminent domain actions.  

Though it seems at first glance like a fairly odd topic, tree issues do arise with some regularity in condemnation cases -- and when cases involve mature trees, the dollars involved can be significant.  Moreover, many appraisers lack the expertise to value trees, meaning an ancillary expert, like Mr. Stamen, can be a key component of a trial team where tree issues exist.  (I even had a case recently where the agency decided not to proceed with a condemnation action due, in part, to concerns about valuing several massive trees that would have been removed by the project.)

Details are as follows:

February 9, 2010
11:30 am to 1:00 pm
Santa Ana/OC Airport Holiday Inn
2726 South Grand Ave.
Santa Ana CA 92705

The cost is $15 if you RSVP in advance, and $20 at the door -- but all Chapter 67 Past Presidents (including, I suspect, my partner Rick Friess) get in for free.  Please RSVP to Hospitality Chair Joe Munsey at Jmunsey@semprautilities.com.
 

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We have previously reported on Tulare County's efforts to acquire right of way for its Road 108 widening and its Road 80 widening.  Now, the County is considering condemning four additional parcels for the Road 108 project. 

In a February 1 article in the Visalia Times Delta, Eminent domain on county board's agenda, Valerie Gibbons reports that the County will decide tomorrow whether to file four more eminent domain actions, which would bring the recent total to 25.  Ms. Gibbons reports that the County's apparent rush to proceed has "had residents up in arms in past meetings."

But the County may have good reason for proceeding quickly, and it likely isn't because the traffic is so bad that the County cannot wait another 90 days to negotiate and, hopefully, appease angry residents.  The problem lies in the combination of the post-Kelo changes to California's prejudgment possession rules and the requirement that federal stimulus dollars be applied to "shovel ready" projects.  This combination squeezes the County's time line, requiring that it file the eminent domain lawsuits quickly or risk losing critical stimulus-dollars funding.  As Ms. Gibbons explains:

Planners say they must move forward quickly, otherwise the funding will be jeopardized. Rules for stimulus-funded projects require the proposal be "shovel ready" before the money is approved and it must be used within a certain length of time.

Back when agencies could acquire possession on short notice (occasionally, as little as three days), the "shovel ready" requirement would be challenging enough, but with possession now taking six to eight months -- or more -- the push to proceed quickly is exacerbated.  

In other words, one of the unintended side effects of the new possession rules (designed to protect property and business owners) is that agencies sometimes must proceed faster than they probably should, thereby harming property owners by forcing owners into litigation even in situations in which a reasonable negotiation period is likely to yield a settlement.  

This problem can be solved, but the solution is not returning to the old, "immediate possession" days.  Rather, funding sources should recognize the changes in the law, and should tie the date upon which the funding is secured to something other than possession and being "shovel ready." 

For now, however, agencies are stuck either pushing ahead regardless of community opposition or risking the very funding that makes the project possible.  My guess is that in Tulare County, residents will show up tomorrow to express outrage over the fact that the County has not completed good faith negotiations and should not condemn now -- and that the County will vote to proceed anyway to protect its funding. 

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I mentioned in an article last week that many redevelopment agencies are facing budget issues; the city of Imperial Beach is facing a similar, but slightly different, problem:  after investing over $8 million in bond money for redevelopment of the Miracle Shopping Center, the economic climate has made it impossible for the city to find an interested developer. 

Nevertheless, the city decided to raise more funds, and purchase the shopping center anyway, hoping the city's ownership would make the site more attractive to developers.  With city ownership now in place, the eminent domain process begins.

According to a San Diego Union Tribune article, "2 shopping center tenants won’t budge," two tenants of the Miracle Shopping Center have refused the city's $63,357 offer, which is meant to cover relocation costs, along with the value of fixtures and equipment in the stores.  The owners, meanwhile, have demanded $1.4 million.  The city council this week voted to approve the adoption of a resolution of necessity, the first step in filing the condemnation lawsuit. 

Four shops have already relocated, one plans to close down, and the city believes it can work out deals with the other eight tenants. 

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Yesterday, Professor Gideon Kanner, a well-known eminent domain scholar, wrote a critique of my post about Avatar on his "Gideon's Trumpet" blog.  It is an interesting response, in that it spans two full pages of printed text, and his fundamental point seems to be that he agrees with my premise that Avatar is not a film about eminent domain.  

How, then, does he spend two pages responding to my January 26 post, "Is Avatar Really a Political Commentary on Eminent Domain Abuse?"  Well, he begins by "trumpeting" the fact that he writes from an "unabashedly property-owner oriented" perspective, and proceeds to explain that I apparently write from a "condemnor-oriented" perspective -- which he is kind enough to concede is my right. 

Unfortunately, his "unabashedly property-owner oriented" perspective -- coupled with his years in academia, rather than as a full-time eminent domain attorney -- may be clouding his vision a bit. 

First, let me say that I do not view eminent domain from a "condemnor's" perspective.  Yes, a large part of my practice over the years has been representing condemning agencies.  And I am admittedly proud of the work I have done to help build desperately needed roads, schools, and other infrastructure projects.  However, the majority of my eminent domain practice has been on the property owner's (and business owner's) side, and this continues to be a key focus of my practice. 

Second, while Professor Kanner takes issue with each of my four premises, he does so in a way that can only be described as, well, academic.  To summarize the issues:

1. Professor Kanner disputes my claim that eminent domain is conducted by the government, not by private companies (as happens in Avatar).   He even cites a 55-year old case that apparently says anyone can condemn property.  Is he right?  As a technical matter, yes.  In the real world, however, eminent domain is almost always conducted by a governmental entity, and Professor's Kanner's need to resort to a 55-year old case to prove otherwise demonstrates that.  And, tellingly, Professor Kanner apparently missed the part of my post in which I stated that private companies sometimes do have the right to condemn.  (This is odd, as I thought my reference to Disney's eminent domain power in Florida was a colorful, interesting example -- yet he somehow missed it.) 
2. Next, Professor Kanner takes issue with my supposed claim that mineral extraction is not a public use.   Again, he cites some cases showing this is wrong -- this time, stretching all the way back to a 1606 case from jolly old England.  Oddly, however, when I read my post, it doesn't appear to say that mineral extraction cannot qualify as a public use; it says that the mineral extraction in the movie was not portrayed as a public use.  Rather, the company in Avatar was unequivocal in its position that it was seeking the "unobtanium" purely for private profit.  I'll concede that Professor Kanner may have missed this point simply because he has admittedly not seen the film, but I'm still having trouble equating a 1606 case with what took place in the movie.
3. Professor Kanner then moves on to question my premise that eminent domain cases in California are initiated with the adoption of a resolution of necessity.   This time, he's pretty sure he has me, explaining that the government always has the option simply to seize property, forcing the property owner to sue in inverse condemnation.  I'm pretty sure he's right about this one, since he uses a fancy Latin phrase, "In haec verba," to prove his point (someday, I'll have to look that one up).  Again, however, Professor Kanner reveals his academic perspective.  This simply isn't the way things happen in the ordinary course.  Government agencies do not routinely seize property without offering compensation.   If they did, they would always be charged with paying attorneys' fees to the other side and, more importantly, the public outrage over such behavior would make the response to Kelo seem like a celebration of the right to condemn.   
4. Finally, Professor Kanner takes issue with my claim that in eminent domain, the condemnor must pay just compensation, explaining that the concept is "slippery as an eel," which presumably means that he does not think property owners receive enough money.  This time, he must be right, since he even has a recent 2009 case to back him up.  Of course, ensuring that property owners are fairly compensated is what most eminent domain cases are all about, and it is what I have spent much of my career trying to accomplish.  And, even when the condemning agency "wins," it still doesn't seem quite the same as sending in massive gunships to blow up the property with the owners still in it.  

In the end, I suspect Professor Kanner is poking fun at me a bit, much like this response pokes fun at him.  Ultimately, our true positions likely are not too far apart, though I imagine his one-sided perspective does cause him to come down at a more extreme place than my more moderate perspective allows.  Still, we can agree that (1) Avatar is not an eminent domain film, and (2) that when eminent domain does occur, our legal system should take care to ensure that property owners are fairly compensated -- and that they do not bear an unfair share of the cost of an infrastructure project designed to benefit the public as a whole. 

And, just to ensure there are no hard feelings, I have sent Professor Kanner passes to see Avatar for himself (in 3-D, on the IMAX, no less), and I hope he enjoys the film for what it is -- not what it is not.  

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On February 3, Chapter 57 of the International Right of Way Association will hold its next lunch meeting.  The speaker will be Barry McDaniel, the CEO at Overland, Pacific and Cutler.  Barry is a well-recognized -- and very successful -- relocation consultant.  He will be speaking about "Move Planning." 

The meeting details are as follows:

Riverside Convention Center
3443 Orange Street
Riverside, California
951-787– 7950

The meeting starts at 11:30 and should be over by around 1:00.  The cost is $16.00 if you RSVP in advance, and $20.00 at the door.  You can RSVP to Chapter 57 Communications Chair Jan Spindler at JSpindler@riversideca.gov.  For more information about Chapter 57, check out their latest newsletter (the 2009 Eminent Domain Year in Review article is especially interesting). 

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A few weeks ago, my wife and I went to see Avatar.  With two young kids, we rarely see movies in the theaters, and we picked this one based on its advertised special effects, not any belief that it was the "best" movie among our choices.  

As I watched, I never really thought of it as an expression of outrage over eminent domain abuse.  Looking around the Internet, however, the movie seems to have been picked up by eminent domain reformists as a big budget example of eminent domain gone bad.  But is it, really?  Let's look at some facts:

1. The "acquisition" was being handled by a private company, not any government agency.  Yes, sometimes eminent domain is pursued on behalf of private companies (typically, in the redevelopment context), but rarely does a private company itself have such power -- though there are a few notable exceptions (for a big one, explore the chain of events that sent Walt Disney to Florida for his "new" theme park decades ago);
2. There was no pretense of "public use."  The fundamental premise was that the "unobtanium" being sought was worth $20 million per kilogram, meaning the company would pursue it at virtually any cost -- including decimation of the Na'vi village. 
3. There was no established right to take.   Fundamentally, the movie did not involve a government's adoption of a resolution of necessity establishing a right to take the property.  Instead, it represented blatant imperialism:  we will take what we want because we can.
4. There was no payment of just compensation.  Maybe I missed something (it was a really long movie), but I don't remember the company appraising the property and paying for it at fair market value. 

In the end, the movie may resonate with eminent domain critics, and it certainly contains the themes found in modern-day "eminent domain abuse" cases.  But it does not reflect how eminent domain really occurs. 

This hasn't stopped it from being used with increasing frequency in the campaign against eminent domain.  In early January, New York eminent domain attorney Michael Rikon, speaking at a New York Senate Committee hearing on eminent domain abuse, directly compared Avatar to current New York eminent domain practices:  "this is how eminent domain works in New York."   

An article by David Boaz in today's Los Angeles Times, "The right has 'Avatar' wrong," takes the position that conservatives -- who have typically derided Avatar's "liberal" themes -- miss the movie's main point:  "what they have missed is that the essential conflict in the story is a battle over property rights."  Mr. Boaz sums it up as follows;

"Avatar" is like a space opera of the Kelo case, which went to the Supreme Court in 2005. Peaceful people defend their property against outsiders who want it and who have vastly more power. 

I'm still not convinced the movie speaks to me as an eminent domain lawyer.  But I will say this:  if eminent domain opponents can convince the public that real world eminent domain mirrors James Cameron's fantasy world, the reform movement may continue its post-Kelo momentum for longer than I have otherwise predicted.   And, in places like New York -- where, unlike California, eminent domain reform efforts continue to move forward -- this may well be the case. 

As for the movie itself:  the effects were indeed spectacular, though the plot was predictably predictable. 

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For years, Cathedral City has been acquiring property by eminent domain as part of its 23-acre Eastside Downtown Area redevelopment plan, which seeks to redevelop downtown Cathedral City into a 39-unit commercial center.  Our firm has also been involved in the project for years, having assisted several property owners impacted by the redevelopment agency's plans. 

According to a January 26 Desert Sun article, "Cathedral City council votes to pay $535,000 in eminent domain land deal," Cathedral City recently approved a $535,000 settlement with one of the final remaining landowners whose property is being condemned (the property consists of two parcels housing an apartment complex).  Two eminent domain actions remain pending.

While Cathedral City has been busily acquiring property for several years, anyone looking forward to the new redevelopment project should not get too excited.  Many redevelopment agencies are facing budget issues, and Cathedral City is no different.  According to the article:

The city is a long way from seeing the 23-acre project planned for the area come to fruition because of an $11.45 million loss of redevelopment funds to the state to help balance the state budget . . . .

Despite the fact that no actual redevelopment is imminent, the City apparently intends to evict tenants from the recently acquired apartment building.  This is unusual, as condemning agencies routinely allow tenants to remain on acquired property until construction is ready to proceed. 

If the City does evict the tenants now, it will have to pay them relocation assistance, but that will likely be of little comfort to some, including "the owner's 93-year-old mother, who's lived at the same apartment for 35 years."   One can only wonder how the public interest would be served by evicting a 93-year old woman so that her apartment of 35 years can sit vacant while the City waits for funds to move forward with its project . . . someday. 

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The public outcry over eminent domain continues.  Claims of "eminent domain abuse" fill today's popular media; a January 21 article by Steve Cook, Eminent Domain is Alive and Well, claims 2 in 3 Americans oppose eminent domain. 

What so often gets lost in the shuffle is that most of the outrage focuses on a narrow aspect of eminent domain:  redevelopment efforts that involve condemning private property and transferring it to another private owner.   This is what sparked debate in the Kelo case, and it is making major headlines in New York, where the "Atlantic Yards" drama involves plans to build a new stadium for the New Jersey Nets basketball team in Brooklyn (there's an entire blog devoted to the Atlantic Yards saga). 

But let's not forget that a large portion of the eminent domain that occurs involves traditional infrastructure projects:  roads; rail lines; utilities; etc.  And while voluntary acquisitions for such projects may be preferable, where that is not possible, eminent domain makes the difference between having new (or improved) infrastructure and not having it.   Would 2 in 3 Americans really oppose eminent domain in those situations?

In Mr. Cook's article, he claims that "there are indications that as stimulus funds make their way to the state and local levels, more property than ever may be at risk."  To me, this frames the issue incorrectly.   California, in particular, is in dire need of infrastructure improvements. 

If stimulus dollars help bring some of those improvements to reality -- and it appears that is happening -- we should view that as good news.  Some property will be condemned in the process.  However, as long as the condemning agencies treat owners fairly and pay just compensation, I simply can't see using stimulus dollars in this manner as "eminent domain abuse." 

In the end, I continue to believe that the real focus of eminent domain commentators should be on ensuring fair compensation for both property owners and business owners facing eminent domain -- not on attacking eminent domain itself.   And, especially in cash-strapped California, if federal stimulus dollars can get some much-needed projects postponed by our state budget crisis back on track, we should be happy, not outraged. 

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In November, we reported that the Barstow City Council would be deciding whether to reinstate the redevelopment agency's power of eminent domain.  According to a January 20 Desert Dispatch article, "Eminent domain issue sparks fear among residents," the City Council has decided to table the issue until May. 

According to the article, the redevelopment agency sees its eminent domain power as a necessary tool to remove blight in the area northwest of Interstate 15 near the outlet malls.  But like most redevelopment efforts, the issue is drawing much public debate.

At the City Council meeting this month, at least 16 residents spoke against the Council's reinstituting the redevelopment agency's ability to utilize eminent domain.  While the City Council pointed out the redevelopment agency could not use eminent domain to acquire owner-occupied homes (a result of the passage of Proposition 99), residents were also concerned about the use of eminent domain on churches. 

In order to address the residents' concerns, the City Council plans to hold a public forum on eminent domain issues within 30 days. 

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