California Eminent Domain Report

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.

Leaving aside whether AB 2162 will pass, are the proposed changes a good idea?  Obviously, it depends in large part on whether you are a public utility company or a property owner being impacted by a utility project.  On the one hand, I am not sure going back to the old system, with ex parte possession orders, makes sense.  I think owners should get proper notice and a chance to be heard on the issue.  On the other hand, I think the new, longer timing can create real problems for public projects, especially those with funding commitments tied to obtaining possession.

If I got to decide the issue, I would allow possession on a short, noticed motion procedure where the property is unoccupied.  I would still give the owner a chance to appear and argue the issue, and I would still require the court to weigh the hardships before ruling.  This would apply not just to public utilities, but to any condemning agency.

For occupied property, I think the current rule works.  The issue is complicated, especially when someone is being displaced, and taking ample time to ensure all the issues can be briefed, allowing the court to make an informed hardship determination, makes sense.  And, of course, the extended timing itself gives occupants time to make arrangements to relocate or otherwise plan for the agency's project.

That said, I do think those in charge of the purse strings should recognize these new rules, and should not tie funding commitments to obtaining possession.  Agencies should not be forced to rush to a decision to commence an eminent domain action or risk losing key funding.  In the end, linking funding to possession is bad for agencies, bad for property owners, and bad for the public.