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

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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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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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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So it's the Wednesday before Thanksgiving, and I thought I should spend some time thinking about what I'm thankful for (apart from Cal's victory at Stanford last Saturday).  Here's a list of three things an eminent domain attorney can be thankful for:

1.   I Live in a Country With Eminent Domain.  I know, who spends time being thankful for eminent domain?  But think about it.  In many places, the government just takes property, paying nothing.  Even in this country, before it was this country, when the Pilgrims took land from existing Native American tribes just after inviting them over for a Thanksgiving feast.   I'm sure the Native Americans did not feel a turkey dinner qualified as just compensation.  OK, so this may not be quite how the story of the first Thanksgiving played out, but you get my point -- and I am thankful that I live in a country where the government is required to pay just compensation for private property.  (If you really want to get lost in the internet debate about Thanksgiving, you can spend hours.)

2.  I Live in a State With Business-Goodwill Recovery.  In California, we now take for granted that business owners displaced by eminent domain may seek compensation for lost business goodwill.  But the courts have routinely held that this is not a constitutional requirement, and until California adopted Code of Civil Procedure section 1263.510 in 1975, business owners devastated by eminent domain were largely out of luck.  Even today, most states do not provide a mechanism for businesses to recover lost goodwill. 

3.  I Live in a County That Has Used Eminent Domain in Creative, and Helpful, Ways.  I live in South Orange County, and I work in Irvine.  I take the San Joaquin Hills Toll Road to work.  Yes, it costs me money, and I'd prefer that it were free, but without the creativity of the toll road system, the road simply would not exist.  And, since it used to take me as much as an hour (or more) to get to work -- and it now takes 18 minutes -- I am thankful Orange County has been at the forefront of such creative financing vehicles, and that it has used eminent domain where necessary to make these ambitious projects a reality. 

And, finally, I guess I'm back where I started:  I'm thankful for eminent domain.  After all, without eminent domain, I (and all the other eminent domain attorneys out there) would have a really tough time making a living. 

     Happy Thanksgiving!

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