California Eminent Domain Report

It’s a Friday afternoon and I decided to take a quick look at the advance sheets for any newly decided appellate cases involving eminent domain. My search revealed an unpublished decision that came out yesterday (September 7, 2017) called Sacramento Area Flood Control Agency v. Souza, 2017 Cal. App. Unpub. LEXIS 6117. I’ll provide the highlights below.

Facts:

This matter involved an acquisition by the Sacramento Area Flood Control Agency (SACFA) of approximately 2.2 acres of land for the Natomas Levee Improvement Program. The acquisition was needed to widen the levee along ...

According to an article in the Los Angeles Times, California lawmakers pitch a break from a key environmental law to help L.A. Olympic Bid, Clippers Arena, California lawmakers introduced Senate Bill 789 last week in an effort to exempt from CEQA any rail, bus, or transit project connected to the 2028 Olympics, along with expediting environmental challenges to construction of the Clippers arena in Inglewood.  If passed, SB 789 would streamline such projects as the environmental review process is typically a multi-year undertaking.  The Bill was introduced by Senator Bradford ...

Under inverse condemnation law in California, a public agency is generally strictly liable for physical damage to private property caused by a public improvement.  This means a public agency can be held liable even if the public improvement was properly designed, constructed and maintained.  Rarely is there a question of whether a project constitutes a "public improvement," but in Mercury Casualty Co. v. City of Pasadena (Aug. 24, 2017), the Court of Appeal recently addressed this issue and held that a tree constitutes a work of public improvement for purposes of inverse ...

The City of Oroville (City) has petitioned the California Supreme Court for review of an unpublished Court of Appeal decision, City of Oroville v. Superior Court (2017) 2017 WL 2554447 (Third District), finding the City liable in inverse condemnation for sewage backup into private property even though the owners failed to install and maintain backwater valves on their private property as required by state and local legal authority.  While no published decisions have been issued on this subject, four unpublished decisions in different jurisdictions throughout California over the ...

The Martins Beach access dispute in San Mateo County continues to make headlines.  As a quick refresher, billionaire venture capitalist Vinod Khosla purchased 90 acres of beachfront property south of Half Moon Bay, and subsequently proceeded to lock the gated entry to Martins Beach, effectively preventing public access to the popular beach.  We've been covering the dispute for quite some time, including the recent introduction of legislation to potentially fund the State Lands Commission's use of eminent domain to acquire an easement for access to the popular beach.

While the ...

We've previously reported on the recent passage of Senate Bill 1 (SB 1), The Road Repair and Accountability Act of 2017, which will raise approximately $52 billion in funding over the next 10 years specifically for transportation.  SB1 is now in full swing, and Caltrans is on a fast track to release new grant funding provided under the legislation.

On August 3, Caltrans released for public review and comment the final drafts of the SB 1 Sustainable Communities and Adaptation Planning Grant guides, which will provide more than $270 million in planning grants for local communities ...

Last week, the United States Supreme Court in Murr v. Wisconsin issued a key regulatory takings decision which creates a new multifactor balancing test to determine whether two adjacent properties with single ownership could be considered a larger parcel.  In a 5-3 decision, the Court found that the properties were a single parcel and because the owners were not deprived of all economically viable uses of their property they could not establish a compensable regulatory taking.

The Murr Family owned two lots adjacent to a river.  A cabin was built on one of the lots, while the other lot ...

When public agencies analyze a potential public project, they often need to gain access to private property for surveys, testing, and to otherwise investigate whether a particular property is suitable for a planned project.  Often, agencies gain access by talking with the property’s owner and reaching agreement on a right of entry.  But where the owner refuses to allow access, the agency must resort to the courts.  For decades, agencies have followed a set of rules that allow them to obtain a court-ordered right of entry with minimal notice and without most of the formality of a ...

Public agencies own significant amounts of property throughout California and the United States.  Sometimes, those properties are not being put to a public use, and the government acts as a landlord, leasing out property to private entities.  But when the government is ready to put the property to a public use, and it terminates the lease, is there a "taking" of private property triggering the need to pay just compensation?  A recent unpublished Court of Appeal decision, California Cartage Company v. City of Los Angeles, addressed this issue and held that the government's termination ...

In California eminent domain proceedings, a property owner is entitled to the "fair market value" of the property being acquired.  Typically, fair market value is determined by analyzing comparable sales or by utilizing an income capitalization approach.  But every once in a while, there is no relevant market data, in which case the law permits determining compensation "by any method of valuation that is just and equitable."  (Code Civ. Proc., sec. 1263.320.)  A recent court of appeal decision, Central Valley Gas Storage v. Southam, explains when this "just and equitable" valuation ...

As we've reported in the past, temporary takings are compensable in California.  But such claims are not easy to prove, particularly when you're dealing with the federal government imposing temporary regulations preventing use of property.  A recent case, Reoforce v. United States, demonstrates some of the hurdles an impacted property owner may face.

In Reoforce, the plaintiff discovered a mineral deposit called pumicite on federal land in Kern County, California.  Believing the deposit had potential value for paint and fiberglass applications, Reoforce submitted a mining ...

Most Californians agree that our State's transportation system is in dire need of additional funding for additional improvements and repair.  The problem has always been where to secure the necessary funding.  In short, it has become more difficult to rely on the federal government, local and regional transportation agencies have become less reliant on the State, the gas tax has not been raised in years, and vehicles have become more fuel efficient, resulting in more miles traveled by more cars without the incremental increase in funding.  This week is a major turning point to ...

When a business is taken as a result of a public improvement, the business is entitled to seek compensation for, among other things, loss of business goodwill. Typically, this loss is calculated by measuring the business’ before-condition value and comparing to its after-condition value.  This traditional methodology was the cornerstone for business goodwill appraisers to determine just compensation.  Yet late last year, the California Court of Appeal issued a ruling in People ex rel. Dep't of Transp. v. Presidio Performing Arts Found. (2016) 5 Cal. App.5th 190 which may have ...

When the California Supreme Court issued its ruling on Property Reserve v. Superior Court, handing a substantial victory to public agencies, we were given three key takeaways:  (1) the Right of Entry statutes (CCP §1245.010 et seq.) are constitutional, (2) the activities the Department of Water Resources sought to undertake are covered by the broad scope of these statues, and (3) if the language of a statute doesn’t match your planned opinion, you can always reform it to match the claimed legislative intent of the statute.

To that last point, the Court’s opinion included its ...

On February 9, 2017, California Assembly Member Phillip Chen (a Republican from the 55^th district) introduced Assembly Bill 408 (AB 408).  You can find a copy of the bill here.  AB 408 is styled as an act to amend Section 1250.410 of the Code of Civil Procedure relating to eminent domain.  There is very little history available on AB 408 and it appears that the next action is for it to be heard in committee on March 12, 2017.  If AB 408 is ultimately approved in its current form, it would radically change the standards by which courts decide whether or not to award litigation expenses in eminent ...

There has been a lot of news lately concerning President Trump’s desire to build a border wall. Many of the articles focus on the efficacy, costs and practical challenges of building the wall.  But the discussions are also starting to move into our world of eminent domain.  An Op Ed piece in the Washington Post  talks about Donald Trump’s Great Wall of Eminent Domain and mentions that 67 percent of the nearly 2,000 border miles constitute private and state-owned lands. The Daily Beast published an article called The Great Wall of Trump Would Be the Ultimate Eminent Domain Horror Show ...

Before an eminent domain action is filed, public infrastructure projects involve years of planning, environmental approvals, design, and property negotiations.  During this time, property owners and real estate agents/brokers are often faced with deciding what to disclose about the potential condemnation to prospective tenants when attempting to lease out space.  It is a difficult position to be in, as (i) disclosing too much makes it extraordinarily difficult to find a tenant willing to pay market rents with the looming "cloud" of condemnation, and (ii) disclosing too ...

In a previous post, "What is 'Just Compensation' For Gas Station Acquisitions," we explored various methods for valuing gas stations and car washes in an eminent domain action, including a recommendation by a gas station appraisal firm, Retail Petroleum Consultants, to approach such valuation assignments as "special use properties".  Retail Petroleum has issued another useful article, "Value Trends in Gas Stations and Car Washes," which examines recent trends driving the valuation of such properties in California.

Retail Petroleum explains that because gas stations ...

One of the hot issues in eminent domain these days involves the government's efforts to take over privately-run utility companies.  The argument typically is that the government -- which has no profit-making motive -- can run the utility at a lower cost, saving the ratepayers money.   Not surprisingly, the utility companies feel otherwise.

In California, one of the first cases to reach trial on this issue is about to wrap up.  The City of Claremont sought to condemn the Golden State Water Company's assets, and Golden State fought the City's right to take.

In a Court trial (i.e., a trial ...

With only a few days remaining until one of the most controversial presidential elections in history, there has been little focus on the candidates' plans as it pertains to the future of infrastructure development in America.  But both Hillary Clinton and Donald Trump have big spending plans -- they are just vastly different in their proposals on how funds will be raised and spent.  If you're interested in a detailed breakdown of Clinton's and Trump's infrastructure plans, there is an excellent article by Chuck Devore in Forbes titled "Where Clinton and Trump Stand on Transportation".

Last year, my partner Ben Rubin reported on the California Supreme Court's decision in California Building Industry Association v. City of San Jose, which analyzed an inclusionary housing ordinance and held that such ordinances do not qualify as "exactions" and, consequently, are reviewed under a deferential standard that looked at whether the ordinance was "reasonably related" to the city’s interest in promoting the health, safety, and welfare of the community.

Last month, we saw the first published decision following last year's Supreme Court pronouncement ...

In January, I spoke at a conference in Austin about efforts by municipalities to condemn privately-held utility companies.  At the time, I figured it would be a one-off presentation on a pretty niche issue, even for eminent domain attorneys.  But next month, I'll be speaking on a variation of that topic at CLE International's 2016 Eminent Domain Conference in Las Vegas, a presentation that will be the third time this year I've spoken on the topic.

In fact, we've been following this issue since at least 2014, when my partner Brad Kuhn wrote about a takeover effort involving PG&E.  Those ...

Last summer, I wrote about the Appraisal Institute’s controversial effort to promote legislation in California (known as AB 624) that would enable licensed real estate appraisers performing appraisals for non-federally-related transactions to use any nationally or internationally recognized standard of valuation. I commented at the time that it wasn’t difficult to envision a parade of horribles that might result should appraisers be permitted to identify obscure international standards for an appraisal assignment in order to drive value up or down for a litigant.

Not ...

Redevelopment has quite the lengthy history in California.  Yet it has generally been "All Quiet on the Western Front" since redevelopment agencies were abolished in 2011 as part of Governor Brown's plan to fix the state's budget deficit.  Yes, the legislature breathed new life back into redevelopment last year through Community Revitalization and Investment Authorities (CRIAs), but a widespread return seemed unlikely given the safeguards and restrictions put in place -- particularly as to what can constitute "blight" (a term which previously could be interpreted so broadly ...

Last month, the California Supreme Court’s decision in Property Reserve v. Superior Court provided long-awaited certainty for public agencies after a court of appeal determined the often-used right of entry statutes failed to provide adequate Constitutional protection for pre-acquisition investigations and testing.  In summary, the Supreme Court held the right of entry process constitutional, with one reform:  the property owner is entitled to a jury trial on the amount of compensation. 

The decision preserves a significant tool for public agencies to keep their projects on ...

Every year or so, a new appellate court decision comes out addressing the proper role of the judge versus the jury on some certain eminent domain issue. Most recently, a trial court, appellate court and the California Supreme Court all grappled with this question:  Does the judge determine whether a dedication requirement is constitutional, or does the jury?  Yesterday, the Supreme Court issued its decision in City of Perris v. Stamper, No. S213468 (Aug. 15, 2016) holding that it is the role of the judge to determine whether a dedication requirement is constitutional.  The ...

For years, we've been working with our public agency clients during the environmental and design-phase to minimize right-of-way impacts with new infrastructure projects.  Yet for many agencies, property acquisitions are an afterthought, as the costs of construction and environmental impacts headline agencies' concerns.  That thought process is slowly beginning to change, as agencies are starting to recognize that right-of-way acquisition can significantly delay projects, resulting in construction delay claims, change orders, loss of project funding, and in ...

It's an exciting time with the Olympics taking place in Rio De Janeiro.  But what takes place before the Olympics ever gets off the ground involves years of planning, lobbying, and infrastructure development.  That development often requires use of eminent domain.  And in countries without due process and constitutional rights to just compensation, the condemnation process is an ugly endeavor for those impacted.

In Rio, for example, KUSA reports in its article, Rio de Janeiro villages uprooted for Olympics, that leading up to the games, eminent domain was often used "without warning ...

We don’t often see multiple takings-related cases in one week, but last week we saw three.  The California Supreme Court’s decision in Property Reserve was obviously the most important, but the Fourth Appellate District Court of Appeal in San Diego also issued two decisions in the same week.  Although both of these opinions are unpublished and cannot be cited, they act as a reminder for property owners to be mindful of some basic principles of eminent domain law.

The first case, SANDAG v. Vanta, addresses some of the limits on the principle of just compensation and, in particular ...

For the last two-plus years, we have been waiting for guidance from the California Supreme Court on whether public agencies could utilize the statutory right of entry procedure to gain access to private property to conduct investigations and testing. Such activities are routinely part of the environmental approval process for public works projects, and if agencies are forced to go through a regular condemnation proceeding, projects could be delayed for many months or even years.  Today, the Supreme Court issued its decision in Property Reserve v. Superior Court, holding the right ...

As we await the California Supreme Court's decision in the Property Reserve case (see related posts here and here), many government agencies are faced with the question of what they will do if the justices deem the current right of entry procedures unconstitutional.  Perhaps technology can come to the rescue.

Many in the real estate industry are embracing technology and drones in particular.  The builderonline.com article "Here's How Drones Will Impact Real Estate Listings" discusses how drone photography will play a significant role in marketing, appraisals and inspections.  ...

Santa Clara County, the City of Palo Alto, and the local Housing Authority have come together to acquire the Buena Vista mobile home park from its current owner, the Jisser family, in an effort to save the mobile home park from closure. According to the Silicon Valley Business Journal, the mobile home park contains the homes of 400 or so mostly low-income residents.  The Jisser family has been trying to close the mobile home park since 2012 to prepare for future redevelopment of the site.  If the Jisser family refuses the government’s latest offer to purchase the mobile home park, the trio ...

When a third of California's registered voters turned up to vote this month, most of them got the chance to consider one of the 89 local bond and tax measures on their ballots.  School construction bonds made up over half of these measures, and nearly all of those passed, including $850 million for Long Beach Community College District and $950 million for Chabot Las-Positas Community College District.  Other Districts with big bond victories included:

• $245 million for Livermore Unified

• $265 million for Marin Community College

• $283 million for Dublin Unified

• $300 million for ...

Eminent domain fans!  Take heed: The City of Perris v. Stamper case (S213468) will finally be heard by the California Supreme Court tomorrow at 9:00 a.m. in San Francisco.  I recapped the issues that are going to be addressed in my prior post about the oral arguments.

Remember - the California Supreme Court now broadcasts its oral arguments live on the web!  Go to the CA Supreme Court's website (http://www.courts.ca.gov/supremecourt.htm) and there will be a blue box on the right that will launch the web viewer!  I hope you tune in!

At some time or another, most of us have experienced sitting in our cars at a railroad crossing waiting for what seems like the longest freight train in the world go by. And it always seems to happen when you’re late for an appointment or for once trying to make it home in time for dinner.  If you live or work in the San Gabriel Valley, sitting in traffic waiting for the freight-train to go by is likely a daily occurrence.

With vehicle and rail traffic projected to increase, in 1998, the San Gabriel Valley Council of Governments (SGVCG) decided to do something about the safety and traffic ...

As cities become more dense and urbanized, it is common for infrastructure to get outdated or insufficient to handle increased demand.  We see this with roads, highways, schools, and even utilities.  When new infrastructure is needed, many times eminent domain becomes necessary to acquire property in the way of the proposed new project.  But sometimes those properties are historical or, given their longstanding presence, have sentimental meaning to the community.

Such a situation is currently playing out in the City of Oakley.  According to an article in the Mercury News, Oakley ...

The Southern California Association of Governments (SCAG) is the nation's largest regional planning agency and is governed by an 86-member Regional Council, made up of elected officials from among the six counties and 191 cities who are members.  SCAG develops  a variety of policy and planning initiatives to create a sustainable Southern California region.  Every four years, SCAG must develop a Regional Transportation Plan, which sets out a vision for the next 25 years. SCAG adopted the most recent plan last month.  In the 2016 Regional Transportation Plan/Sustainable Communities ...

Today, the California Supreme Court heard oral arguments in the Property Reserve v. Superior Court case.  Today was also the day the Court began showing live webcasts of oral arguments online, so I was able to not only hear the arguments but see the Justices and attorneys in action.  If the Court provides a link to the oral arguments, I will include that in another post.

My initial reaction from the oral arguments - all of the Justices were very engaged in the arguments and the Court hammered both sides pretty soundly.  If I had to pick a winner, I think they went easier on the State.

The Court did ...

If you are an eminent domain junkie like us, then you will appreciate knowing that the City of Perris v. Stamper case (S213468) will be heard by the California Supreme Court on May 5, 2016, at 9:00 a.m. in San Francisco. As a quick refresher, this is yet another case where the Court is trying to delineate the role of the judge versus the jury in eminent domain cases. The case considers the constitutionality of a dedication requirement imposed by the City of Perris.  The Court will be addressing two questions:

1. Is the constitutionality of an otherwise reasonably probable dedication ...

One of the most valuable assets many homeowners enjoy is their property’s view. If the government undertakes an activity that eliminates or obstructs that view, is an owner entitled to relief?  In Boxer v. City of Beverly Hills (April 26, 2016, B258459), the California Court of Appeal held that in an eminent domain action (where there is a direct taking of property), view impacts are compensable, but in the absence of a taking of property, a property owner is not entitled to compensation for loss of view.

Background

In Boxer v. City of Beverly Hills, a group of property owners filed an ...

While much of the focus in California lately has been on eminent domain for transportation projects, there's some new condemnations moving forward in both Northern California and Southern California for social -- or community -- development projects.

• Down south, the San Diego Union Tribune reports that the Port of San Diego has exercised its condemnation powers to acquire four acres of prime property on Chula Vista's Bayfront in order to construct the Chula Vista Bayfront Master Plan project.  The Master Plan, approved by the Coastal Commission in 2012, is a joint project ...

There are a couple exciting International Right of Way Association (IRWA) events coming up next week:

• On April 26, I will be participating in IRWA Chapter 1's (Los Angeles) 2016 Annual Valuation Seminar.  I will be presenting with Brad Thompson of Mason & Mason on "Project Benefits and Construction-Related Impacts:  Tangible or Speculative?".

• On April 29, I will also be participating in IRWA Chapter 42's (San Jose) 4th Annual Spring Conference.  I will be presenting with my partner, Artin Shaverdian, and Steve Parent of Bender Rosenthal on "The Value of Transit Proximity:  Assessing ...

There are two interesting projects in San Diego County that are moving forward, both of which involve at least some use of eminent domain.

The San Marcos Creek Specific Plan is proceeding in, not surprisingly, San Marcos.   The project involves efforts to create a new downtown area for the City.  The project has been a long time in the making, with the City adopting its initial specific plan back in July 2007.  A 2015 PowerPoint presentation describes the City's plans for the area.  And just this week, the City filed at least four eminent domain actions as part of its efforts to implement the ...

The California Supreme Court announced today that the Property Reserve case will be heard on May 3, 2016, at 9:00 a.m. in San Francisco.  (I'm assuming this is not an April Fool's joke, since eminent domain attorneys have been awaiting this for a long time now.)

The Court will decide whether California's precondemnation right of entry statutes are constitutional.  As has been discussed at length for more than a year in our industry, the decision could effect sweeping changes in how condemning agencies access properties for necessary inspections and testing.  We posted a detailed ...

At its March meeting, the California Transportation Commission (CTC) approved funding to improve and maintain California’s multimodal transportation system.  According to the District 2 Press Release, allocations included:

• $12.5 million for 11 capital improvement projects both on and off the state highway system as part of the State Transportation Improvement Program (STIP),

• $17.8 million for two Transit and Intercity Rail Capital Program projects, and

• $15.5 million for 22 Active Transportation Program projects - the most recent active transportation investment from ...

Eminent domain practitioners are well versed in analyzing a property's highest and best use.  Under these principles, a property being condemned is not necessarily valued based on its current, existing use.  Where the appraiser can show that the property's actual value is based on a different use, that use can often be the foundation for the valuation (assuming that other use meets the four-part test of highest and best use, which is beyond the scope of this post; if you're really bored today, here's a link to Wikipedia's discussion of highest and best use).

In County of Santa Barbara v ...

In the last month, the U.S. Supreme Court has declined to hear appeals on two eminent domain-related cases.  The first case, California Building Industry Association v. City of San Jose, is one we discussed last year.  If you recall,  the California Supreme Court held that San Jose's inclusionary housing ordinance that required all new residential development projects of 20 or more units to sell at least 15 percent of the for-sale units at a price that is affordable to low or moderate income households did not impose an exaction on developers that constituted a taking.

The U.S ...

We have seen a trend where local agencies are choosing to replace stop-sign and signal controlled intersections with roundabouts.  The concept is not new; we see them throughout Europe and on the East Coast.  But until recently, there weren't many out West.  But that is changing and the City of Yucaipa is one of many embracing the new model.  According to this post in the Yucaipa/Calimesa News Mirror, last month the Yucaipa City Council adopted plans for roundabouts at 6 intersections:

• Yucaipa Boulevard & Bryant Street

• Avenue E & Bryant Street

• Avenue E & 2nd Street

• Avenue E & 3rd Street

• Avenue E ...

The wait is nearly over:  for those living on the Westside of Los Angeles, passenger rail transit will be available in just a few short months.  Officials announced this week that the final extension of the Expo Line will open on May 20, extending service from Culver City to just a few blocks from the Santa Monica pier.

This will be the first passenger rail transit service to the far Westside since Pacific Electric streetcars stopped running to Santa Monica in 1953.  The project completes the 15-mile Expo Line between downtown Los Angeles and Santa Monica.  Train trips between downtown Santa ...

When public agencies acquire property for public projects, many times only a portion of the property is required.  And, the government usually seeks various types property interests:  (i) permanent easements for street purposes, drainage, utilities, slope, aerial, or access rights, (ii) temporary construction easements, or (iii) fee interests, to name a few.  One common misconception among agencies is that acquiring an easement is completely different than acquiring the property in fee.  In some cases, it can be vastly different, but in others, depending on the scope of the ...