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

Another recent interesting court decision was somewhat lost in all the excitement last week over (1) the County of Los Angeles v. Glendora Redevelopment Project case striking down Glendora's redevelopment plan for inadequate blight findings and (2) the US Supreme Court decision in the Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection case rejecting a "judicial takings" claim. 

That recent decision was by the California Court of Appeal in City of San Jose v. Union Pacific Railroad, which came down a month ago, but received little attention as an unpublished decision on a narrow valuation issue.   But on June 11, the Court decided to publish its opinion, making it a whole lot more relevant to us eminent domain attorneys. 

In Union Pacific Railroad, the city sought to condemn an easement across a strip of land owned by the railroad company in order to widen an existing street.  The court held that the railroad was entitled to only nominal compensation for the portion of the property actually used for the rail line, explaining that a special rule applies in such circumstances pursuant to a 1925 California Supreme Court decision, City of Oakland v. Schenck (1925) 197 Cal. 456.

With some thoughtful analysis, it seems pretty clear that the Court got the decision right.  Under the facts as presented in the case, the easement did not diminish the value of the fee given its highest and best use as a rail line, meaning nominal value makes perfect sense -- and constitutes fair market value.  

But the Court apparently found the case to be more novel, concluding that it was bound to follow Schenck, but that the end result was a decision that did not afford the owner fair market value for the property taken.   In my opinion, the Court's analysis is wrong, even though its decision was right. 

For more details about the case, feel free to read my E-Alert, Court of Appeal Holds that a Condemnee is Not Always Entitled to Fair Market Value – But is That Really What the Court Means?
 

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From 1901 to 1961, the Pacific Electric Railway -- or the "Red Car" -- operated as one of Southern California's primary mass transit options, connecting Orange and Los Angeles Counties in a large series of rail corridors.  Now, officials are examining ways to reuse the West Santa Ana Branch Corridor, an abandoned 20-mile rail corridor running from Santa Ana to Paramount. 

According to a June 14 Orange County Register article, "Is reusing the old Pacific Electric Railway a possibility?, the hope is that someone can find a way to use the abandoned rail line to

connect the Los Angeles Metro Blue Line, Metro Green Line, and Union Station on the north end, and the Santa Ana Regional Transportation Center on the south end.

I have no idea whether such a project is economically feasible or whether it will get off the ground.  However, the ever-increasing costs of major right-of-way projects, coupled with the public's aversion to the government's use of eminent domain (often required for such projects), suggests that it makes a lot of sense to study whether an intact, existing right of way can be reused.  

Whether anything ever comes of this, I like the fact that officials are studying the issue.  We'll see what happens.

Note:  Photo from the National Archives, Pacific Region, in Laguna Niguel, California.

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San Bernardino currently has over a dozen overpass or underpass projects planned throughout the county.  Last month, officials had planned to move forward with condemnation proceedings for one such project, the $20 million Hunts Lane overpass located at the Colton-San Bernardino city line. 

But according to a Riverside Press-Enterprise article, "Hunts Lane overpass causes some concern," nearby property owners voiced concern over the railroad grade separation project's impacts to their businesses, such as blocking access and destroying visibility.  As a result, officials have delayed a decision to begin acquiring the necessary property by eminent domain, perhaps in an effort to better understand the project's impacts on nearby property owners and businesses.  

Putting off the condemnation proceedings may just be delaying the inevitable, as officials believe that separating cars on Hunts Lane from the Union Pacific Railroad tracks is crucial to relieving traffic congestion in the area south of Interstate 10.  Construction could begin later this year, and is expected to take around 18 months.

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