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

The debate over the extensions of some of the Bush-era tax cuts have been making national news for some time.  It's splattered all over the newspaper and has its own running commentary on the political talk shows. 

But today, there's a different twist for those of us who deal with eminent domain.  Congress is debating the extension of the payroll taxes yet again, but this time, a major eminent domain issue is wrapped up in the fray.

Specifically, Republicans in Congress had said they planned to couple the extension of the tax cuts with a requirement to fast-track approval of a controversial pipeline project that President Obama previously planned to delay until at least 2013. 

The Keystone XL pipeline is intended to link oil fields in Canada with refineries in Oklahoma more than 1,500 miles away.  It has been the subject of considerable controversy, largely from environmentalists, but also from property-rights advocates objecting to the massive eminent domain that the project would entail.  

A November 7 article by Jonathan Mariano, Keystone XL Pipeline Relies on Eminent Domain for Success, explains:

The fight against the Keystone XL pipeline has been mostly an environmental fight, but quite frankly, not everyone is an environmentalist and may not resonate with this message. However, eminent domain may just provide enough common ground for the environmentalist and non-environmentalist alike.

So what happened?  This afternoon, Republicans in the House passed the payroll tax cut package, 234-193.  Included in the package is a requirement to accelerate approval of the Keystone XL project.  But the Republicans' "victory" may be illusory, as explained by Lisa Mascaro in a December 13 Los Angeles Times article, House approves payroll tax cut extension, with strings attached:

But the Republican win is expected to be short lived, as the bill has limited chances in the Senate, where Democrats oppose the GOP priorities . . . added to the bill to win Republican votes, including one to accelerate the controversial Keystone XL pipeline.

(As an amusing aside for those of us who have heard the name Susette Kelo more times than we can possibly imagine, one of the most vocal opponents of the Keystone project and its use of eminent domain is named, ironically enough, Sue Kelso.  An October 17 article in the New York Times, Eminent Domain Fight Has a Canadian Twist, talks about Ms. Kelso's part of the story.)

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When we think of some of the most well-recognized and controversial decisions from our judicial system, cases like Roe v. Wade (abortion) and Dred Scott v. Sandford (slavery) come to mind.  Within our group of right of way professionals, we obviously think Kelo v. City of New London is a huge deal, as it allows for the use of eminent domain for purely economic purposes.  But does it rank up there with the others?  It does, according to US Supreme Court Justice Scalia.

According to an ABA Journal article, Justice Scalia was recently speaking to a group of students at Chicago-Kent School of Law, and he predicted Kelo will be overturned:  "I do not think that the Kelo opinion is long for this world," Scalia said.  He went on to compare Kelo to the other cases mentioned above, noting it ranks among the top cases in which the court made a "mistake of political judgment."  (Justice Scalia is not alone -- see another recent apology for the decision by Justice Palmer.)

While Justice Scalia notes that the US Supreme Court has made mistakes of law, 

it has made very few mistakes of political judgment, of estimating how far ... it could stretch beyond the text of the Constitution without provoking overwhelming public criticism and resistance.  Dred Scott was one mistake of that sort.  Roe v. Wade was another. ...  And Kelo, I think, was a third.

On a less serious note, you can also read the Chicago-Sun Times article on the subject, where Justice Scalia also answers questions such as whether he prefers deep dish or thin crust pizza.  (He was in Chicago; how do you think he responded?)

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Six years ago, the US Supreme Court issued its landmark decision in Kelo v. City of New London, affirming the government's ability to exercise eminent domain for purely economic purposes.  The public backlash and media firestorm surrounding the decision turned our quirky group of eminent domain attorneys into rock stars for a short moment in time.  Ms. Kelo's battle was put to print in Jeff Benedict's Little Pink House:  A True Story of Defiance and Courage, and it now appears the infamous case is making its way to your television. 

According to a Hartford Courant article, Little Pink House is being made into a Lifetime TV movie starring Brooke Shields as Ms. Kelo.  While Ms. Kelo's former residence is now a "90-acre swath of nothingness," Benedict recognizes the bigger picture, noting that "there has been a movement triggered across the country to turn back these eminent domain laws because of [the Kelo] decision."

So, perhaps again for a glimpse of time, the day-to-day workings of us eminent domain attorneys can make their way into the spotlight.  Between the Little Pink House, the Battle for Brooklyn, Greetings from Asbury Park, and Split Ends, eminent domain fights appear to be movies in the making.

To learn more, I'd also recommend checking out the reports from our blogging colleagues, Robert Thomas at inversecondemnation.com, and Anthony Della Pelle at newjerseycondemnationlaw.com. 

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As originally reported by Robert Thomas at inversecondemnation.com, a petition for certiorari was filed asking the U.S. Supreme Court to address "[w]hat category of takings are subject to heightened judicial scrutiny, and when is the risk of undetected favoritism so acute that an exercise of eminent domain can be presumed invalid?"  While Justice Kennedy brought this issue to the national stage when he raised the possibility of such conduct in a recent concurrence, as of today, and likely tomorrow, the question remains unanswered. 

In Kelo v. City of New London, 545 U.S. 469 (2005), while the U.S. Supreme Court rejected the notion that the promotion of economic development must be treated as per se invalid, or even presumptively invalid, the Court reiterated that a public agency will not "be allowed to take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit."  Justice Kennedy elaborated on this concept in his concurrence, stating that "[t]here may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption (rebuttable or otherwise) of invalidity is warranted under the Public Use Clause." 

Justice Kennedy, however, did not provide any specific guidance as to when such a presumption is appropriate, concluding that since the taking by City of New London "occurred in the context of a comprehensive development plan meant to address a serious city wide depression, and the projected economic benefits of the project cannot be characterized as de minimis," it was not the proper "occasion for conjecture as to what sort of cases might justify a more demanding standard."

The current petition seeks to have the Court fill that gap, using the Hawaii Supreme Court's decision in County of Hawaii v. C&J Coupe Family Ltd. P'ship, 242 P.3d 1136 (Haw. 2010), as the springboard.  Generally, the case goes like this:

• In exchange for a change of zoning necessary to construct a 1500-plus unit gated development, the developer agreed to construct a bypass highway.
• Shortly thereafter, the County of Hawaii and the developer executed a development agreement providing that the County would use its power of eminent domain to acquire any property along the proposed route for the bypass highway if the developer was otherwise unable to purchase the property.
• Except for the property owned by C&J Coupe Family Limited Partnership (Coupe), the developer was able to obtain all of the property along the route.
• Pursuant to the terms of the development agreement, the County of Hawaii adopted a resolution of necessity and filed an eminent domain action to condemn the Coupe property.  The development agreement was expressly referenced in the resolution of necessity.
• During the pendency of the first condemnation action, the County of Hawaii adopted a second resolution of necessity and filed a second eminent domain action to condemn essentially the same Coupe property.  This time, the resolution of necessity did not make any reference to the development agreement.  
• The court held that the first condemnation was invalid, because the County had unlawfully delegated its sovereign power of condemnation to the developer by way of the development agreement.  The court, however, eventually upheld the second condemnation action, concluding that Coupe had failed to demonstrate by clear and palpable evidence that the public use asserted was a pretext.  In reaching this holding, the court declined to adopt a presumption of invalidity or saddle the County with the burden of proving the validity of its stated public use.  

While the case presents compelling facts, particularly in light of Justice Kennedy's concurrence, the chance of U.S. Supreme Court review remains slim. 

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The case involving a small boxing gym in National City, California, has garnered national media attention.  The owner filed suit challenging National City's redevelopment plan for, among other things, failing to follow California's post-Kelo rules on making blight determinations. 

We reported on the case last month in A More Personal View of the Redevelopment Fight from National City.  The trial ended a few weeks ago, and the parties have been anxiously waiting for a decision ever since.  Late yesterday, the court issued its decision, ruling in favor of plaintiffs.  According to a press release issued this morning by the Institute for Justice (the firm that represented the owner in the litigation) entitled Major California Property Rights Victory for Landowners in Eminent Domain Abuse Fight; National City Violated Federal Constitution and State Laws:

The Court struck down National City’s entire 692-property eminent domain zone in the first decision to apply the legal reforms that California enacted to counter the disastrous U.S. Supreme Court Kelo decision in 2005. This ruling, which found that National City lacked a legal basis for its blight declaration, reinforces vital protections for property owners across the state, and underscores why redevelopment agencies should be abolished.

The city's reaction to the decision is, not surprisingly, a bit different.  Although acknowledging that the court ruled against the city overall, Mayor Ron Morrison is quoted in the San Diego Union Tribune as identifying a key failure in the plaintiffs' victory:

The main thing they were trying to do was make it so cities can not use eminent domain for economic development. They failed on that. The judge threw that part out.

Obviously, this is a big decision, and property-rights advocates will trumpet its significance.  But for now, unless you live in National City, the decision's impact may not reach you.  Trial court decisions do not create legal precedents that can be relied upon in other, unrelated actions.  While it may well be that this decision will find its way to the Court of Appeal, unless and until the Court of Appeal issues a published decision on the issue, the decision does not actually change California law. 

That said, I'm sure other redevelopment agencies around the state will take note of what happened in National City; rest assured none of them want to be the target of the next lawsuit/national media campaign by the Institute for Justice. 

Note also that this is not the first court decision to strike down blight findings since California's post-Kelo reforms were enacted.  We reported last year on a case in which the court struck down the Glendora Redevelopment Agency's blight findings.  That decision, which was a published Court of Appeal decision, does create legal precedent. 

More information later if we get our hands on the court's actual ruling. 

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A January 27 article in California Watch, "Eminent domain battles rage on despite Prop. 99," reflects the ongoing confusion that surrounds the efforts to reform eminent domain in the aftermath of the Supreme Court's 2005 Kelo decision. 

The article's premise is that Proposition 99, approved by California's voters in 2008, did not stop what the author describes as "eminent domain abuse."  But the case example that underlies the article reflects a fundamental misunderstanding about what Proposition 99 does (or does not do), and what people typically mean when they talk of "eminent domain abuse." 

Proposition 99 was one of many responses to the Kelo decision, which involved a redevelopment effort by the City of New London, Connecticut, in which the city sought to condemn some single-family homes in order to redevelop them into a commercial use that would generate more tax revenue. 

What really outraged people was that the city did not even pretend that it was acting to eliminate blight (a traditional justification for condemning property for redevelopment purposes).  Instead, the city simply felt like it could generate more taxes by tearing down the houses for a more profitable use - a plan the Supreme Court said qualified as a public purpose sufficient to justify the condemnation.

Proposition 99 targeted this specific type of "abuse," limiting eminent domain authority involving (1) redevelopment, and (2) residential properties.  I've written in the past about Proposition 99's narrow scope, but the fact is that it was intended to address a Kelo-type situation - not to stop all eminent domain. 

The "abuse" example in the California Watch article misses both of the Kelo/Proposition 99 prongs:  it is not an eminent domain use involving redevelopment; and it is not a condemnation of residential property.  Instead, the City of Laguna Woods condemned a commercial property to use for its own government offices (a space the city had already been leasing for that use for years). 

Sure, the parties had a substantial dispute over the property's value, and in that case, the jury's conclusion of value was much higher than the city thought it would be.  But I have trouble seeing valuation disputes like this as "eminent domain abuse," and nobody should be surprised that Proposition 99 fails to protect against such things.   

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Ever since the Supreme Court issued its infamous 2005 Kelo decision, people have been anxiously awaiting the Court's next opportunity to weigh in on the extent of the government's eminent domain authority and, in particular, the limits (if any) created by the "public use" requirement. 

One of the cases that has been watched closely involves efforts to expand Columbia University in New York.  In Tuck-It-Away, Inc. v. New York State Urban Development Corporation, dba Empire State Development Corporation, the New York State Urban Development Corporation sought to condemn property from Tuck-It-Away in order to transfer the property to Columbia.

As the case was framed by the property owner, the agency went beyond what even the broad Kelo decision allows.  In particular, in upholding eminent domain for purely economic motives, the Kelo court nonetheless explained that

[the government may not] take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit.

In particular, the Kelo Court warned that a "one-to-one transfer of property, executed outside the confines of an integrated development plan," would "raise a suspicion that a private purpose was afoot."  This is exactly what the property owner claimed was happening in Tuck-It-Away. 

New York's Appellate Division agreed, holding the taking unconstitutional.  However, the New York Court of Appeals reversed, holding that the taking did qualify as a public use.   Specifically, the Court held that the project would eliminate blight and would promote education, academic research and the expansion of knowledge, which the New York Court described as "pivotal government interests."

This set the framework for the Petition for Certiarori to the United States Supreme Court, which met last Friday to discuss the case.  Today, the Supreme Court issued an order denying the Petition.  This means that the Supreme Court will not hear the case on the merits and the decision of the New York Supreme Court upholding the taking will stand. 

Even though the Supreme Court refused to hear the case, property rights advocates will decry this as another Supreme Court attack on private property rights.   In the meantime, Columbia will presumably be able to move forward with its expansion plans. 

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Proposed changes to California's redevelopment law have been quietly making their way through the California legislature.  With little publicity, AB 2531, authored by Assemblyman Felipe Fuentes, made its way through the process this summer.  After a series of amendments, AB 2531 was passed by California's Senate on August 12 by a vote of 22-13.  On August 27, it passed California's Assembly, 50-26.

On September 10, the bill was presented to Governor Arnold Schwarzenegger for signature.  Under the California legislative process, the Governor has until September 30 to sign or veto the bill.  If he signs (or takes no action at all), AB 2531 becomes law.  If he vetoes, the bill goes back to the legislature for a possible vote to override the veto.  (Overriding the veto would require a 2/3 vote, meaning AB 2531 would fall just short in both houses unless the votes change.)   

I'll get into more details about AB 2531 if it passes, but the basic premise is that it would:

1. Expand the ability of the Los Angeles Community Redevelopment Association to acquire property through eminent domain by removing the restriction that the CRA can only exercise its eminent domain authority within designated redevelopment areas.  In other words, if AB 2531 becomes law, the CRA could condemn property anywhere within the City of Los Angeles. 
2. Expand the CRA's bases for asserting eminent domain to include eminent domain motivated by pure economic motives (essentially, the very conduct that created all the controversy when the Kelo opinion came down in 2005). 

If you think this sounds like a significant change in the law, you're not alone.  Several commentators have reacted negatively to AB 2531, including:

• In a September 28 post on citywatchla.com, "Dangerous New Bill About to Become LA Law," Ziggy Kruse summarizes AB 2531 as follows:  "AB 2531 expressly unleashes CRA/LA to roam city wide and take any piece of property and give it to one of its developer cronies." 
• Timothy Sandefur, writing for the PLF Liberty Blog, titled his September 28 post, "Gov. Schwarzenegger ponders expanding the abuse of eminent domain in California."

On the other hand, the California Redevelopment Association (not surprisingly) urges support for the bill:  "AB 2531 will give redevelopment agencies clear authority to use their resources for economic development–activities that will create and support jobs, assist industrial and manufacturing businesses, and investments to grow California’s green economy."

One of the interesting things about AB 2531 is that as initially proposed, it would have applied throughout California.  But during the course of the legislative process, the bill was amended and narrowed.  As passed, AB 2531 expressly applies only to the CRA in Los Angeles. 

More tomorrow once we know what happens. 

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Five years ago today, the Supreme Court announced its decision in Kelo v. City of New London, triggering perhaps the most broad sweeping eminent domain reform effort in U.S. history, along with tremendous critical commentary -- including, as just one example, an August 2005 piece on Forbes.com titled Eminent Disaster.

Quite frankly, I'm a bit bored by the decision after five years (I can't begin to count the number of times I've explained the decision and what it means to clients, at seminars and conferences, and on this blog).  However, others are marking the occasion with commentary, analysis, and even a You Tube video.  Here's a sample of what's floating on the web today:

• Institute for Justice white paper, Five Years After Kelo:
  The Sweeping Backlash Against One of the Supreme Court’s Most-Despised Decisions;
• Institute for Justice video, Kelo:  Five Years Later;
• Owners' Counsel of America's Eminent Domain Law Blog, Today marks 5 year anniversary of Supreme Court's ruling in Kelo v. New London;
• Libertarian Party, Libertarians note anniversary of bad Kelo decision;
• Hotair.com, Kelo’s fifth anniversary: a triumph of property-rights activism; and
• Reason.com, Marking the Fifth Anniversary of Kelo v. City of New London.

If you've read all of this, and still want to read more about Kelo, you really should take a deep breath -- and immediately shut off your computer.  Go outside.  See a movie.  Watch the Wold Cup.  Something. . . .   Seriously. 

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One of the big issues in eminent domain over the past five years has been the role of blight in justifying eminent domain for redevelopment purposes.  The seminal decision (that started all the ruckus) -- Kelo v. City of New London -- involved the use of eminent domain for redevelopment purposes where the city did not even pretend it was acting to eliminate blight.

Kelo had little direct impact on California's eminent domain law, because even before the Supreme Court issued its opinion in 2005, California's law allowed eminent domain for redevelopment purposes only upon a proper showing of blight.  In other words, California law did not allow eminent domain for pure economic development. 

Following Kelo, however, public scrutiny on eminent domain and, in particular, eminent domain for redevelopment purposes, created a nationwide backlash.  Most states enacted some form of eminent domain reform.  In California, the reforms included SB 1206, which contained some tweaks to the law involving blight findings.  More importantly, however, it seemed clear that courts would be way more likely to examine critically an agency's blight findings in the wake of the Kelo backlash. 

Yesterday, the Sixth District California Court of Appeal issued its decision in County of Los Angeles v. Glendora Redevelopment Project.  There, the county sued Glendora, claiming that Glendora had not made proper blight findings in enacting its redevelopment plan.  The opinion describes the trial court's ruling as follows:

“Glendora’s findings of blight are not supported by substantial evidence” in the administrative record. Furthermore, the court concluded, given the absence of blight, “Glendora is without eminent domain authority in this instance.”

The Court of Appeal examined the four requisites for a proper blight finding:

1. The area must be “predominantly urbanized";
2. The area must be “characterized by” one or more conditions of physical blight;
3. The area must be “characterized by” one or more conditions of economic blight; and
4. These “blighting conditions must predominate in such a way as to affect the utilization of the area, causing a physical and economic burden on the community.”

In a painstaking analysis, the Court held that Glendora had not met the "physical blight" test.  The court analyzed each of four statutory bases for a physical blight determination:  (1) unsafe or unhealthy buildings; (2) code violations; (3) dilapidation and deterioration; and/or (4) defective design or construction.  Finding no substantial evidence in the record of any of these conditions, the court invalidated the redevelopment plan. 

The significance of this opinion lies not just in the holding itself, but in the court's willingness to scrutinize the blight findings, rather than merely deferring to the agency's determination.  This is precisely the type of analysis that seemed likely in Kelo's wake.  Whether this is the start of a trend remains to be seen. 

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Last week was a fairly slow week for California eminent domain news, but I came across an article about a case that seems interesting enough to warrant a brief discussion, even if it has no direct application in California. 

Fronteer Gold, apparently a Canadian-owned company with a division formed under Delaware law, is seeking to condemn property in Nevada to help implement its plans for the Long Canyon gold mine. 

You might wonder how a private company, under Canadian ownership, can condemn property from private owners in Nevada.  Apparently, Nevada law contains a provision that grants eminent domain authority to private companies for purposes of protecting mining operations, and Nevada eminent domain law describes mining as "the paramount interest of this State" (see Nev. Rev. Stat. Ann. § 37.010(f)(1)).  

According to a June 3 article in the Elko Daily Free Press, "Fronteer seeks eminent domain: Company wants ranch land for gold mine," that is want Fronteer is trying to accomplish:

Fronteer requested use of eminent domain to obtain surface rights for land it has mineral rights for, to obtain access easements, to obtain additional lands and for use of roads.

On the other hand, in 2008, Nevada voters passed the People's Initiative To Stop The Taking of Our Land (PISTOL)  in response to Kelo, seeking to prohibit private companies from condemning property from other private owners.  But it didn't stop there, as proponents and opponents of PISTOL have apparently agreed on a potential compromise measure, which will now appear on the November 2010 ballot, and which, if passed, will replace PISTOL.  

Quickly scanning both the text of the new eminent domain proposal and the current eminent domain law under PISTOL, I do not see any exception that would allow a private company to condemn property for mining purposes, despite mining being Nevada's "paramount interest." 

What does all of this mean?  I'm guessing the parties will either find a way to reach an agreement on the property's value, or there will be a significant right-to-take battle on the horizon, regardless of whether the 2010 amendment passes.  

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In its April 2010 volume, the Yale Law Journal published a Note by Zachary Hudson titled Eminent Domain Due Process.  My first reaction was a bit odd.  Having spent many years as a practicing eminent domain lawyer, I rarely get the opportunity to spend time with pure, academic writing.  Just reading the Note instantly took me back many years to long hours spent in a small dark room at Boalt Hall (before all the improvements), trying to make sure all the hyper-technical "Blue Book" rules were being followed as I slaved away as Associate Editor of the California Law Review.  (It still scares me to think that I actually knew all of those rules off the top of my head back then.)

Having shaken off those frightful memories, I noticed that Mr. Hudson's Note is a wonderful resource on the history of the interaction between eminent domain and due process, with some obvious effort to canvass the laws around the country.   I suspect I will find use for it as a resource in my practice for years to come. 

I'd tell you more about it, but I'm still trying to recover from those "Blue Booking" memories.  Besides, eminent domain lawyer Robert Thomas prepared a nice write-up on the piece in his blog (that's how I found it in the first place).   And, if you're interested enough to still be reading by now, just go ahead and read the Note for yourself. 

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After a flurry of post-Kelo activity, cries for eminent domain reform seem to have quieted in California in the past couple of years.  Now, public utility companies are seeking to step into the calm in an effort to roll back some of the reforms that did occur. 

One of the recent changes to California eminent domain law involves the procedures for obtaining prejudgment possession.  Before Kelo, agencies could almost guarantee possession quickly.  In fact, they could obtain orders for possession ex parte, meaning they didn't even have to provide owners with notice that they were seeking possession.  Under those rules, by the time an owner learned that an eminent domain case had been filed, the order for possession was often already signed. 

In 2006, the California Legislature passed SB 1210, which changed the prejudgment possession process.  In particular, it

• Extended dramatically the time it takes to get possession (it now takes more than 120 days for occupied property);
• Ensured property owners would receive ample notice before a court considered a motion for possession; and
• Created a new balancing test that required courts to balance hardships in determining whether or not to grant an agency prejudgment possession. 

Public utility companies are now looking for a partial exemption from these new rules.  Assembly Bill 2162, introduced February 18, 2010, by Assemblyman Niello, would allow public utilities to obtain prejudgment possession orders ex parte when “immediate possession will not displace or unreasonably affect any person in lawful possession of the property’s surface estate.” 

AB 2162 had been set for a hearing before the Utilities & Commerce Committee on March 22, but on March 17, the Bill was amended, and yesterday it was referred back to the Committee.  It is not yet clear how much momentum the Bill has, and no hearing date has been set.  We'll let you know what happens.

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Marc Scribner of the Competitive Enterprise Institute published this week an article about the economics of eminent domain for economic development (i.e., for redevelopment purposes) entitled "This Land Ain’t your Land; this Land Is my Land."  I found the piece interesting, despite the fact that it seemed the author started from the conclusion "eminent domain is bad" and worked backwards crafting an analysis to get there. 

Ultimately, however, Mr. Scribner does provide some interesting insight.  He does not simply come out and say eminent domain for economic development is unconstitutional or that it qualifies as eminent domain abuse (though it seems clear that is how he really feels about it).  Instead, his article purports to analyze whether using eminent domain for economic development makes economic sense in the long run.  And this is where the piece creates some interest. 

Mr. Scribner claims that the mere fact that eminent domain for economic development is possible has a chilling effect on entrepreneurship, especially in lower income areas where an entrepreneurial spirit may be most needed.  The reasoning behind this is somewhat complicated, but relies in large part on the idea that the government is simply incapable in most cases of accurately assessing the various economic forces at play:

An increase in the discretionary use of eminent domain for economic development would lead to a decrease in entrepreneurship. As local officials lack the knowledge and expertise to effectively promote private development, their political missteps can keep their localities in poverty by undermining entrepreneurship, and forgo the wealth it would have created.

In the end, Mr. Scribner and I part ways on his conclusion that eminent domain should never be used for redevelopment purposes.  I think that in some cases, the open market simply cannot adequately address truly blighted situations, and having the government step in -- even when eminent domain is required -- can trigger revitalization and economic growth. 

That said, the forces Mr. Scribner identifies no doubt exist, and suggest the government should go down such a path only after careful thought and analysis.  Had local officials in New London, Connecticut, viewed the issue as Mr. Scribner views it, the string of events leading to the infamous Kelo decision might have played out differently.  

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In December, we reported on Sierra Madre's decision to allow voters to decide whether the City should possess the power to condemn property for redevelopment purposes.  On April 13, 2010, voters will decide the issue by ratifying or rejecting City Ordinance 1304, but for now, the measure has triggered some colorful debate. 

On February 27, Susan Henderson offered a Mountain View News article "Eminent Domain Measure -- Yes or No?"  She purports to analyze the measure in the broader context of recent eminent-domain-reform efforts, including California's Proposition 99, passed in 2008 in the wake of the U.S. Supreme Court's much-maligned 2005 Kelo decision.  She ultimately concludes that the measure is irrelevant, and amounts to mere political "grandstanding" by Sierra Madre's Mayor MaryAnn MacGillivray.

On March 1, "Eric Maundry," aka City Council candidate John Crawford, responded in a Sierra Madre Tattler piece entitled "Has The Mountain Views News Come Down On The Side Of Eminent Domain?"  In addition to several somewhat silly attacks on Ms. Henderson and her analysis, Mr. "Maundry" contends that the measure has real teeth, prohibiting the City from all eminent domain for redevelopment purposes -- i.e., eminent domain where the goal is to turn the condemned property over to another private owner for redevelopment. 

The dispute appears to be part of a larger political controversy in Sierra Madre, where an ongoing debate over growth issues has apparently become the cornerstone of the upcoming election.  I'm smart enough to stay out of that larger debate, but I do want to comment on the eminent domain issue.

As to eminent domain and the impact of Ordinance 1304, I have to side with Mr. "Maundry."  The ordinance goes well beyond the limited restrictions Proposition 99 offers state-wide, and should, if approved, create a real barrier against eminent domain for redevelopment purposes.  Especially with respect to businesses, no current federal or state prohibition exists on condemning property for redevelopment purposes, as long as the condemning agency makes proper blight findings.  Ordinance 1304 would change that, at least in Sierra Madre.   

Is prohibiting all eminent domain for redevelopment purposes a good thing?  I'll leave that to Sierra Madre residents to decide on April 13. 

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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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Sierra Madre will allow its citizens to decide whether the city can use the power of eminent domain for private purposes.  According to a Pasadena Star-News article, "Sierra Madre resident[s] will vote on eminent domain," the city council agreed to put a proposed measure on the April 2010 ballot which would prevent the city from (1) condemning property and turning it over to a private developer, and (2) funding or cooperating with any other city agency using eminent domain (such as the Redevelopment Agency).

According to the article, City councilman John Buchanan is quoted as saying:

Taking one person's private property to hand it to another is morally questionable, to say the least.

Wondering why the city does not simply pass an ordinance prohibiting the use of eminent domain for private purposes if the board members are against such use?  The answer, apparently, is that the board considered doing so in reaction to Kelo, but ultimately determined such an ordinance could be overturned by future city councils.  If the measure is passed by the voters, it would be much harder to overturn.

Sierra Madre is not the first city to consider prohibiting the use of eminent domain for private purposes.  In fact, its proposed measure is modelled after the City of Yorba Linda's 2008 Measure BB, which was passed with nearly 80 percent approval.  And in 2007, Arcadia voters banned the use of eminent domain in the city's downtown redevelopment area.

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Everyone knows the sad tale of America's automotive industry:  companies operating only through government subsidies and dealerships shutting their doors across the country.  So when the City of Vista came up with a plan to "create a second downtown car dealership and boost sales tax revenue," one would think the public would embrace it. 

But like many bold plans, this one has a wrinkle.  While most of the property needed to facilitate the plan is available for purchase, including the existing North County Ford site, one additional parcel is needed.  

According to North County Times reporter Cigi Ross, in her December 5 article, "VISTA: City plans to buy North County Ford property,"  the plan requires the acquisition of the Riviera Motel, whose owner does not want to sell.  In fact,

[the owner] accused the city of trying to steal his land and give it to the rich.

Last month, we told you the City was seeking to purchase the motel property.  Having apparently failed in those efforts, the City Council plans to vote today on whether to proceed with the purchase of the other properties needed at a cost of around $15 million -- and on "whether to try to seize the motel through eminent domain."  

For anyone who thinks this is just the kind of thing the post-Kelo eminent domain reform was designed to protect against, it is worth noting that California's primary reform act -- 2008's Proposition 99 -- deals only with protecting certain single-family residences.  Assuming the City of Vista demonstrates that the public interest and necessity require the project -- and that the motel property is necessary for that project -- it is unlkely any significant barriers will exist to the City's exercise of eminent domain to acquire the property should the City choose to proceed.

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It seems most commentators on eminent domain generally, and on the use of eminent domain for redevelopment purposes in particular, adopt an extreme stance.  The loudest voices, especially in the "post-Kelo" world, tend to be property-rights advocates who denounce virtually any use of eminent domain, especially for redevelopment purposes. 

A good example of this appears in a recent San Diego News Network article by Brian Peterson, president of the Grantville Action Group:  "What we Learned at a Redevelopment Conference:  Don't do E-mail."  The article summarizes two "redevelopment conferences" hosted by the Municipal Officials for Redevelopment Reform, an organization described as a "state-wide, anti-redevelopment abuse organization[]."   The article contains some very good advice regarding making a record of potential abuses and, specifically, advises owners facing condemnation to present their arguments to the condemning agency in writing. 

The article correctly notes that detailed written comments will typically have greater impact than oral comments, made under the constraints of a public hearing -- which may allow a speaker only about three minutes to state his or her case. 

Though the article does not expressly state it, I would strongly advise any landowner facing eminent domain who wants to challenge the project to make sure he or she has an experienced eminent domain attorney participate in preparing the written submission.  It is far too easy to make a procedural error even at this early stage that could impact the likely success of a subsequent right-to-take challenge. 

The article also warns that emails are suspect, citing anecdotal evidence that emails may routinely go unread:

For a while now, there has been the suspicion, and some evidence, that City Council offices are not opening all constituent e-mails.

It is the article's "big picture," however, that causes me concern.  The article claims "there have been 346 abuses of eminent domain in California" since the Kelo decision, and it implies that a primary reason for this is because "California is one of the few states to not reform eminent domain in any meaningful way following Kelo." 

I don't know what the 346 examples of "abuse" are, though I am confident that many of them would qualify as abuse under any reasonable definition.  I am equally confident, however, that many examples of eminent domain -- including eminent domain for redevelopment purposes -- yield massive benefits for the public, and should be applauded, not condemned.  

In the end, we would all be better off if those with extreme viewpoints on this issue (on both sides of the debate) would step back and analyze each individual situation on its own merits: 

• Redevelopment agencies would be well served to examine more closely whether eminent domain is really necessary, and whether the public benefit to be gained really is substantial enough to warrant throwing someone out of their home or business; AND
• Property rights advocates should pause to examine the benefits a redevelopment project will generate and decide whether those benefits could be obtained without the use of eminent domain (often, they cannot) before claiming another "abuse" has occurred. 

Ultimately, if redevelopment agencies choose their projects wisely, and use eminent domain only when truly necessary, the real debate should focus on ensuring owners receive proper compensation for their properties and businesses, not on trying to stop the projects.  And, to the extent California requires more eminent domain reform, the place to look may well be in the rules regarding how compensation is derived, not in the circumstances in which the government can condemn. 

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Why would this (or any other) blog need another post about Kelo v. City of New London.  It probably doesn't, which is why this will be short. 

But, for anyone who still wants more of the story behind Kelo, the soon-to-be-closed Pfizer facility, or the heated arguments they engender, the New YorK Times ran an extended piece, A Turning Point for Eminent Domain? on November 12 that contains a number of different, high-level views on the subject.  (It also contains plenty of less than high-level views, as the story had generated 55 comments within just a few hours of its posting.) 

And, for anyone who still wants more, New York Times reporter Patrick McGeehan wrote another November 12 article, "Pfizer to Leave City That Won Supreme Court Land-Use Case," which focuses, oddly enough, on the Pfizer part of the tale. 

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The impetus for one of the most infamous eminent domain cases in U.S. history was the City of New London, Connecticut's efforts to utilize a massive Pfizer plant as the basis to revitalize the surrounding area.   (The common myth that Pfizer was itself the intended beneficiary of the Kelo property is not correct.) 

The decision, Kelo v. City of New London, triggered a nationwide backlash against eminent domain when the Supreme Court ruled that economic growth, by itself, qualifies as a public purpose sufficient to satisy the right to take property by eminent domain.

The tale of what followed around the county has been well documented.  Many states passed eminent domain reform in the wake of the Kelo decision.  Less well known is the story of what happend to the "little pink house" at the center of the controversy.  Recently, we reported that the area has not been revitilized as the City of New London imagined. 

Now, another turn of events suggests the revitiliztion may be nothing more than a pipe dream.  Today, Pfizer announced that it is shutting down its 1,400-employee New London facility, creating real doubt that new development is anywhere on the horizon.  In short, leaving aside the debate about the wisdom of the Supreme Court ruling, the Kelo story and its aftermath certainly doesn't seem headed for a happy ending any time soon. 

Photo credit: Historic Buildings of Connecticut

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 In an October 31 article for the North County Times, "VISTA: City wants to redevelop motel property," reporter Cigi Ross writes about the City of Vista's plans to acquire a motel property as part of a plan to redevelop the area:

The owner of a downtown Vista motel is accusing the city of trying to kick him out of his business and his home.

City officials announced Monday they're trying to purchase the Vista Riviera Motel as part of a redevelopment project along Vista Village Drive and Vista Way that could include a new car dealership. 

While the City's efforts currently involve a voluntary acquisition, the owner has already said that he does not want to sell, raising the possibility that the City could acquire the property through eminent domain.   Though this situation raises the specter of the often criticized Kelo decision, the situation is different, in that Vista's stated motivation in acquiring the property is to eliminate blight, a motivation missing in the Kelo case. 

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In June 2005, the United States Supreme Court issued its now infamous decision in Kelo v. City of New London.  That decision made eminent domain and condemnation household terms (imagine my shock at hearing my previously unknown, niche area of practice discussed in normal, day-to-day conversations).  The decision sparked tremendous controversy, as the Court ruled that the City of New London, Connecticut could condemn properties for redevelopment purposes for purely economic reasons. 

In other words, the City did not even pretend that it was acting to eliminate blight (the typical justification for condemnation for redevelopment purposes).  Instead, the City proclaimed that the new development would generate more tax revenues than the existing development (largely, single-family homes), and that the increased tax revenue was, in and of itself, a "public use" justifying the takings.  The Supreme Court agreed. 

What followed around the country was a wave of eminent domain reform, designed to protect against the "evil" that Kelo allowed.  Most reformers never bothered to realize that what happened in Kelo was already illegal in most states, including California.  Specifically, even before Kelo, California law prohibited the condemnation of property for redevelopment purposes unless the property was blighted. 

Now, four years later, many states have enacted at least some form of Eminent Domain reform; California has passed several moderate reforms that have narrowed somewhat condemnation for redevelopment, and that have added some procedural protections for property owners.  In 2008, California voters approved Proposition 99, the more moderate of two proposed eminent domain initiatives. 

And as for Susette Kelo and her famous pink house?  She moved across the Thames River to Groton, and her house was moved about two miles for preservation. 

And the economic boom the massive redevelopment project would create?  It hasn't happened.  Though some of the redevelopment area has been re-built, much of it lies as an abandoned wasteland, with no immediate plans to build anything. 

Associated Press writer Katie Nelson describes the area in her October 4 article "EMINENT DOMAIN: Poetic justice, or sour economy?":

Weeds, glass, bricks, pieces of pipe and shingle splinters have replaced the knot of aging homes at the site of the nation's most notorious eminent domain project.

There are a few signs of life: Feral cats glare at visitors from a miniature jungle of Queen Anne's lace, thistle and goldenrod. Gulls swoop between the lot's towering trees and the adjacent sewage treatment plant.

Who knows whether New London will ever reap the financial rewards promised.  In the meantime, Eminent Domain reform seems to have died down (especially in California) and the Eminent Domain lawyers of the world are once again fading into relative obscurity.

Photo credit: Historic Buildings of Connecticut

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