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

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 Commission (HLAC) the power to approve (or deny) plans to alter the building.  And (at least according to Ms. Cleary), at least one member of the HLAC has expressed sympathy with the Valley Alliance's goal of stopping the owner's plans. 

What does this have to do with eminent domain?  Maybe nothing.  But the possible designation and assertion of control by the HLAC raises the specter of a regulatory takings claim pursuant to the Supreme Court's seminal decision in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).  That decision established a key, three-part test for analyzing regulatory takings claims: the economic impact of the regulation on the claimant; the extent to which the regulation has interfered with investment-backed expectations; and the character of the governmental action.  

If the owner can prove that the designation and, more particularly, the level of control the designation might place in the hands of the HLAC, meets the three-part Penn Central test, a court may hold that the act constitutes a compensable taking of the owner's property.  Indeed, deciding whether restraints imposed by designation as a historical landmark was the whole point of the Penn Central case (though the court ultimately found that the designation at issue there did not meet the very test established by the case). 

That the owner might assert a claim under Penn Central if the HLAC accepts the property's nomination has not been lost on government officials.  According to Ms. Cleary:

County Counsel has said that decisions on historic landmarking of property without the owners’ consent will be considered in light of the Penn Central eminent domain case.

What happens next?  At the owner's request, the HLAC continued the April 12 hearing on the nomination to its May 10 meeting.  In the meantime, the owner appears to be moving forward with its plans, which are described in more detail in a February 10 article in the Lompoc Record, Debate rages over Mattei’s Tavern future, and a January 19 article in the Santa Ynez Valley News, Landmark protection sought for Mattei’s Tavern,  

Finally, if you're looking for more about the building's history, take a look at a 1974 pamphlet, Mattei's Tavern.

Photo Note:  Image depicts Mattei's as it appeared in about 1888, when it was known as the Central Hotel and was a key stagecoach stop.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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, the Ninth Circuit's recent decision in United States v. Milner, and the California State Lands Commission's December 7 Report on Sea Level Rise Preparedness.

The focus of his piece is foreshadowing what these cases and potential future climate changes may mean for California property owners.  (For a look at the State Lands Commission's Report's findings about potential impacts to our ports, look at the December 10 Los Angeles Times article, Rise in sea levels threatens California ports.)

The bottom line -- at least according to Howard: 

[C]oastal property owners need to recognize the ramifications of sea level rise before it is upon them, in order to have the time to apply for and, if necessary, to litigate the right to build the required protective structures. Otherwise, such homeowners will find both their lands and rights lost to erosion.

The facts of the Milner case suggest owners would do well to heed this warning.  There, coastal landowners built coastal protection structures on their own lands, but were thereafter found liable for trespass when changes to the mean high tide line left the structures outside the owners' property boundaries.  (Yes, the court really did find the owners had "trespassed" on what was their own land before the change in the tide line.)

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

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 today by David G. Savage, “Supreme Court to Hear Florida Beach Property Rights Dispute,” it looks like the Supreme Court will weigh in on a takings issue in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection.

The twist that might save the accuracy of the panelist’s prediction is that the case is not a typical regulatory takings case, one where a government regulation, typically a zoning limitation, has gone too far, resulting in a substantial or complete loss in value to the property.

According to the article:

The Florida case began in 2004 when five property owners objected to a state-funded beach restoration project east of Pensacola. More than six miles of white sandy beaches had been eroded by several hurricanes, and the project called for adding up to 75 feet of new sand to the shoreline.

But this public benefit came with a downside for beachfront property owners. The newly built-out beach would be public land.

While many landowners accepted this deal, a few objected and then sued when the project went ahead. They claimed the government had taken their private property, or at least their right to a private beachfront.

"Everyone knows that waterfront property is more valuable than water-view property, and that a private beach is worth a lot more than a public one," said Kent Safriet, a Tallahassee, Fla., lawyer representing the property owners. "This is not a land grab by my clients. It is a land grab by the state to create a public beach."

On its face, a case involving the increase or decrease in the size of a beach would seem to have little relevance to other takings situations. Certainly no agency is likely to build a beach in front of my thoroughly land-locked home. But if the Supreme Court viewed the case so narrowly, it is unlikely that the Court would have agreed to hear it. Presumably, the Justices must instead expect that they can bring some clarity to takings law or can correct something they view as an error in the existing law.

The article mentions an “odd twist” in that the owners’ attorneys are asking the Court to rule that the state’s judges -- rather than a particular agency -- actually did the taking, i.e., it was a "judicial taking." I have to agree that this seems an “odd” holding: Who would actually pay the judgment? The judges themselves? But it is an issue in the case -- for reasons that would likely take several, boring pages to explain; so I won't try here.

Oral arguments in the case are scheduled to be heard by the Court today. It will be fascinating to read what the Court’s final opinion does or doesn’t do to takings law.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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 States, the government has forced a property owner

to watch the value of his . . . property decline until the federal government finally condemned it — and paid him much lower compensation than he would otherwise have received.

The question posed is whether the federal government's actions must be the primary cause of the pre-condemnation depression of the property's market value, or whether there must only be a nexus between the government's actions and the depressed market value.  The Eleventh Circuit sided with the government, but the property owner petitioned the Supreme Court to review the case.  The Cato Institute filed an amicus brief in support of the property owner.  The Supreme Court will decide early next year whether to hear the case.  Stay tuned.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In 2003, the County of Riverside and the cities within western Riverside County formed the Western Riverside County Regional Conservation Authority (commonly known as the "RCA").  They delegated to the RCA the task of acquiring approximately 153,000 acres of privately owned property deemed necessary for habitat conservation under the Western Riverside County Multiple Species Habitat Conservation Plan (the "MSHCP").

Many property owners whose land falls within the MSHCP conservation area find themselves with few options:  generally, they can either (1) sell their property to the RCA at a dramatically below market-value price (usually on the RCA's payment terms); or (2) allow the RCA's looming conservation cloud to hang over the property for years, essentially rendering it worthless.

Nossaman attorneys Rick Friess and Brad Kuhn have assisted several property owners over the past few years in challenging the RCA's acquisition/conservation tactics.  A few past examples:

• Last year, we represented Winchester 700, the owner of 454 acres of property north of Murrieta between the I-215 and SR-79, in an arbitration with the RCA.  The County had refused to process Winchester 700's proposed 1,034-unit residential development, and while the RCA demanded 100% conservation, it never made an offer.  The RCA ultimately agreed to pay over $70 million for the property, along with other acreage owned by Winchester 700.
• Earlier this year, we represented San Jacinto River Ranchos and the Meadows at Lone Cone, two owners working together to develop just over 200-acres of residential property.  Development entitlements for their land were stalled when the RCA deemed the property necessary for conservation.  The owners and the RCA ultimately reached a deal allowing the developers to keep about 70 acres for development purposes, with the RCA paying for the remaining property.

This week, after months of effort on behalf of Saul and Maria Delgado Velazquez, the owners of 80 acres of property in Wildomar that the RCA deemed it wanted for 100% conservation, we were able to assist in closing a sale transaction with the RCA.  The process was not easy, as the Delgados were forced to file a lawsuit against the RCA, alleging that the RCA's actions constituted a de facto taking and resulting liability for inverse condemnation, precondemnation damages, and violations of the state and federal relocation assistance and real property acquisition policies act. 

The RCA offered the Delgados a price well below fair market value, and refused to pay the purchase price until 2013.  After the Delgados filed their lawsuit, the RCA's Board approved a deal whereby the RCA is acquiring the property in phases at a value acceptable to the Delgados.  The acquisition of the first phase just closed.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Just over a year ago, on October 1, 2008, the California Court of Appeal issued a fairly rare ruling:  it found a public agency had committed a regulatory taking and remanded the matter back to the trial court to determine the amount of damages to be paid to the property owners.  Specifically, the Court held in Monks v. City of Ranchos Palos Verdes that the City of Ranchos Palos Verdes' rules preventing development in an area susceptible to landslides (the infamous Portuguese Bend landslide area) constituted a regulatory taking that was not justified by the city's power to regulate nuisances and protect the public interest.  (For more details, Brad Kuhn and I wrote an article for the California Real Estate Journal, "California Court of Appeal Opens The Door to Regulatory Takings Claims," that details the holding in the case, and its potential implications.)

 Photo Credit:  Los Angeles Times/Rancho Palos Verdes

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Typically, regulatory takings litigation generates a lot of noise and gnashing of teeth but, at the end of the day, rarely are government agencies bitten with an order that they pay compensation. However, a new opinion from the federal 9th Circuit Court of Appeals, Guggenheim v. City of Goleta (Sept. 28, 2009, Case No. 06-56306), demonstrates that regulatory takings litigation can have teeth. In Guggenheim, the 9th Circuit holds that the city of Goleta's rent control ordinance on mobile home parks went too far and that the city will have to pay the park's owners just compensation. This case, particularly coupled with two other recent regulatory takings cases, Monks v. City of Rancho Palos Verdes and Casitas Municipal Water District v. United States, suggests that agencies may now need to pay close attention to their regulations if they hope to avoid a regulatory takings bite.

Whether these cases reflect a new trend remains to be seen, but it sure looks like the tide may be turning. And, if the “trend” continues, agencies in California should pay particular attention, since successful inverse condemnation plaintiffs stand to recover their attorneys’ fees, in addition to whatever damages they can prove. For more information about Guggenheim and regulatory takings generally, take a look at an October 15, 2009, article in the Los Angeles Daily Journal, "Adding Some Bite to the Bark."  
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link