California Eminent Domain Report

Earlier this month, we gave a presentation during the International Right of Way Association’s 68th Annual Education Conference in Cleveland, Ohio. In keeping with the “rock and roll” theme, our session, “Ch-Ch-Changes in the Law: Eminent Domain and Infrastructure Update,” provided an overview of recent case law and legislation impacting the eminent domain and the right of way industries across the U.S. Additionally, we provided an update on the Infrastructure Bill, where funding and projects are kicking off, and discussed potential barriers to fully taking ...

For the first time, a California state appellate court has decided whether businesses may bring takings claims against the government due to COVID-19 shutdown orders. In 640 Tenth, LP v. Newsom, the California Court of Appeal affirmed the San Diego Superior Court’s dismissal of an attempted class action brought by owners of restaurants, gyms and other businesses that had been closed pursuant to COVID regulations. The Court of Appeal held: “A mandated-but-temporary business closure to deal with a public health emergency” is not a taking requiring just compensation. The ...

Brad Kuhn and Jillian Friess Leivas authored the article “Eminent Domain 2021 Year in Review” for The Appraisal Journal. The article takes an in-depth look at multiple developments on the eminent domain front that occurred in 2021, including the special occasion when the U.S. Supreme Court heard two taking cases. It also examines the impact of the passage of the Infrastructure Investment and Jobs Act, which aims to provide federal funding for infrastructure projects for many years to come.

The Appraisal Journal is a publication of The Appraisal Institute, a global ...

The language in conveyance and real estate documents impacts the type of property interests that are created and conveyed and defines the scope of those interests.  The importance of documentary language was crucial in a recent unpublished California Court of Appeal case, Canyon Vineyard Estates I, LLC v. DeJoria, 2022 Cal.App.Unpub. LEXIS 3414, which discussed issues of fee conveyance, conservation easements, and subordination issues.

Background

A property owner owned over 400 acres of undeveloped land along the Santa Monica Mountains and the Pacific coastline.  The owner ...

When the government forces a property owner to sell private property, it is usually done through an eminent domain action (a direct taking), and the government is required to pay just compensation. But what if the forced sale is because the property is a public nuisance (for example, if the property is dilapidated and has code violations) -- does that constitute a taking requiring the use of eminent domain? According to a recent Court of Appeal decision, the answer is no: the forced sale of private property based on public nuisance grounds is within the government’s police powers.

In City of Fontana v. United States Bank (2022 Cal.App. Unpub. LEXIS 2127), a residence was in disrepair and the City sent the owners and their lender a notice and order to repair and abate . . . 

On April 5, 2022, Brad Kuhn and Jillian Friess Leivas will present “Recent and Proposed Legislation Impacting the Eminent Domain & ROW Industry” during the Eminent Domain & Right of Way Club's virtual Lounge Event.

Brad and Jillian will discuss how recent legislation is impacting the Eminent Domain and Right of Way (ROW) industry and will review the trends observed in recent and proposed legislation.

Lounge Events are hosted exclusively on the Clubhouse app and are held the first and third weeks of every month.

The Eminent Domain & Right of Way Club is geared toward right of way ...

A new decision out of the Northern District of California applying the “final action” standards of Pakdel v. City and County of San Francisco has come out – with the District Court concluding that even under Pakdel’s “relatively modest” standard, a landowner seeking to develop their property must still actually receive a final decision on the merits of their proposal before filing a takings claim in federal court.  The new case is DiVittorio v. County of Santa Clara, and the opinion by the Hon. Beth Labson Freeman helps further clarify the steps a landowner must satisfy before availing themselves of the federal court system ...

Rosamond Community Services District (“RCSD”) recently approved the adoption of a resolution of necessity and filed a case to acquire water rights from agricultural land by eminent domain. After the adoption of the Resolution of Necessity, Antelope Valley Water Master granted the RCSD with a 999 acre-foot permanent water pumping allotment, in addition to a one-time pumping allotment of 5,000 acre-feet. These allotments significantly changed RCSD’s water acquisition needs and eliminated the need for eminent domain to be used.

While it is not uncommon for a public ...

The International Right of Way Association (IRWA) recently released its annual report, which contains summaries of eminent domain decisions and legislation within the United States, and is an important resource and reference point for professionals in the right-of-way industry. IRWA’s Real Estate Law Committee – which is chaired by Brad Kuhn, Chair of our Eminent Domain & Valuation Group – releases the report biannually. Brad and Nossaman Eminent Domain & Valuation Group associate Jillian Friess Leivas authored the report along with Robert Thomas, the Joseph T ...

Throughout all of the ups and downs in 2021, there have been multiple developments on the eminent domain front, including the special occasion where the U.S. Supreme Court heard a takings case. Outside of case law, 2021 saw the Infrastructure Investment and Jobs Act passed, which aims to provide federal funding for infrastructure projects for many years to come. All in all, 2021 was a fairly busy year for right-of-way and eminent domain practitioners.

Click here for summaries of the prominent cases and developments in eminent domain from 2021...

Generally, if utilities with the right of eminent domain cause damage to private property during the operation of their facilities, they may face inverse condemnation liability. However, where the facility in question is not operating for the “public use” and instead was installed pursuant to a private contract, inverse condemnation may be inapplicable. … 

As water becomes scarcer in California, public agencies are looking for new sources and opportunities to provide water to their communities. When the government identifies those water sources but confronts unwilling sellers, eminent domain sometimes becomes necessary. This is currently taking place in the Antelope Valley, where the Rosamond Community Services District recently approved the adoption of a resolution of necessity to acquire water rights from agricultural land by eminent domain.

The District is facing shortages in its future water supplies and it is limited in ...

Some easements will contain express language that delineates the respective rights of the grantor and grantee to make use of the easement.  Other times, even absent express language, a grantor can be prevented from using an easement if such use would unreasonably interfere with the rights of the easement holder.  For further discussion of an example when express easement language is not needed to limit the use of the easement by the grantor, check out our prior post entitled “Utilities Have the Right to Remove Trees Within an Easement.” …. 

Developers often have to satisfy various conditions of approval in order to achieve the necessary approvals to move forward with a project.  Sometimes these conditions include requirements to acquire land for public improvements, such as a new sewer line or road, and those improvements are often located on property not owned by the developer.  When the developer is unable to acquire those rights through voluntary negotiations, the city imposing the conditions of approval is generally required to use eminent domain to acquire the rights for the developer …

In Knick v. Township of Scott, 139 S.Ct. 2162 (2019), the Supreme Court reversed over three decades of precedent when it eliminated the requirement that a plaintiff exhaust state court remedies before pursuing a takings challenge in federal court.  After the Supreme Court’s decision, federal courts experienced a significant uptick in the number of federal takings lawsuits.  In Gearing v. City of Half Moon Bay, the City was able to convince the federal court to take a back seat and allow a later-filed state court eminent domain action to proceed while the federal takings lawsuit was put ...

The California Coastal Act is a regulatory regime with many layers and complexities. Generally, however, the Act requires development within a designated coastal zone to obtain a coastal development permit. This permit may be issued by the local jurisdiction, the California Coastal Commission, or in rare cases, by both the local jurisdiction and the Coastal Commission. Even if the local jurisdiction has the authority to issue the permit in the first instance, the California Coastal Act may allow an aggrieved party to appeal the local jurisdiction’s decision to the California ...

The U.S. Supreme Court ruled last week that the Centers for Disease Control and Prevention (CDC) exceeded its authority when it imposed a national eviction moratorium. More precisely, in Alabama Association of Realtors v. Department of Health and Human Services, the Court agreed with a district court determination that the CDC acted unlawfully in banning evictions of residential tenants who declare financial need in counties with high COVID-19 rates. In its decision, the Supreme Court concluded, “If a federally imposed eviction moratorium is to continue, Congress must ...

Property dedication requirements and eminent domain usually don’t mix well: they make for an odd and confusing set of valuation rules. For example, if an agency seeks to condemn property to build a road through an undeveloped area, but that road would be required in order to develop the properties, how should it be valued? Under one set of eminent domain rules (the Porterville doctrine), the property subject to dedication has little value since it would have to be given up as part of any future development. Under another set of eminent domain rules (the “project influence rule” ...

The Supreme Court of the United States rarely hears anything related to eminent domain or takings cases; the Kelo decision in 2005 was the latest “big” case for our industry, although the 2019 Knick decision also made headlines. But in the last week, SCOTUS has shown a keen interest in property rights, rendering several impactful decisions – with a focus on California in particular.

We just reported on the Cedar Point Nursery decision, where the Court found that a regulation allowing unions to access private property constituted a taking. Now, the Court has issued several more ...

On June 23rd, the United States Supreme Court held that a California regulation allowing labor organizations to intermittently access agricultural employers’ property was an unconstitutional taking. The Court reversed the decision from the Ninth Circuit Court of Appeals, an outcome we predicted in our post last year about this issue. The decision is a major victory for property owners, and raises questions going forward about a public agency’s ability to regulate private property rights—particularly as it pertains to allowing temporary access … 

In the City of Fresno, the Tower Theatre is a bohemian landmark, opened in 1929 as a 20th Century Fox Movie House. This year, it became public that Adventure Church was buying the theatre, which has caused tensions to rise in the community, with thousands signing a petition to save the historic theatre, weeks of demonstrations trying to prevent its use as a church, and even a pending lawsuit. The City attempted to defuse the situation by offering Adventure Church an alternative location, which also backfired. So what’s next? The City may be considering using eminent domain to prevent ...

When is a lease termination triggered by eminent domain versus by contract?  The case of Media v. City of San Diego, 2021 U.S. Dist. LEXIS 103728 addressed this question and concluded that the lease termination was only a product of the lease naturally terminating, not the governmental acquisition of the underlying property.  This opinion raises questions regarding the future of loss of goodwill and furniture, fixtures, and equipment (FF&E) for short-term tenants.

Background

A billboard owner had been leasing property to display the billboard for many years when it was converted to a ...

Throughout the United States, old railroad corridors are being abandoned and converted into other uses, such as hiking, biking or other trail purposes. This converted use makes sense, as it is difficult to otherwise compile a long stretch of right-of-way that would be needed to create such trails. But are adjacent property owners entitled to some sort of just compensation when this conversion takes place?  The answer is maybe. 

Before a railroad operator can abandon its right-of-way, it must first secure approvals by the Surface Transportation Board. When that abandonment process ...

In 1994, the U.S. Supreme Court issued its decision in Dolan v. City of Tigard, 512 U.S. 374, holding that in order for a dedication or exaction to pass constitutional muster, in addition to establishing an “essential nexus” between a legitimate state interest and the permit condition, the condition must be roughly proportional to the impact of the proposed development.  More than two decades later, the County of El Dorado adopted Measure E.  Under Measure E, instead of allowing a developer to pay their fair share toward traffic improvements through a traffic impact fee program, a ...

For those of you who missed our recent webinar, "Living on the Edge: Managing Sea Level Rise in California", you can find a recording of the event posted on our website.  My colleagues Ben Rubin and John Erskine provided a great overview of ways to protect existing infrastructure and private property through coastal resiliency, what the models and data are suggesting on the future of sea level rise and the status of pending sea level rise legislation in California. I covered risks and possible solutions for public agencies and property owners, with a focus on how Coastal Commission and ...

With the recent flurry of coastal law bills before the California State Legislature and the myriad headlines advising that we must retreat from the shore, sea level rise (SLR) and related climate change topics remain front and center in California. Join our Water Industry Group on May 27, 2021 from 11:00 a.m. to 12:00 p.m. PT for "Living on the Edge: Managing Sea Level Rise in California" as we sort through the pending legislation and discuss the basis for this ever-increasing concern with the encroaching ocean.

Comprised of attorneys from Nossaman’s Water, Environment & Land Use and ...

Please join us on May 6, 2021 from 11:00 a.m. to 12:30 p.m. PT as Nossaman’s Coastal Development and Environment & Land Use Groups present “Charting a Course for Offshore Wind Energy in California” to discuss current proposals and pending regulations concerning offshore wind development along the California coast.

We will be participating on a top tier panel of coastal specialists which will also include: Kate Huckelbridge, Deputy Director of Energy, Ocean Resources & Federal Consistency, CA Coastal Commission; Jennifer Lucchesi, Executive Officer, State Lands ...

The first 100 days of a new administration can define what lies ahead for the next four years. Join our panel of Nossaman Environment & Land Use attorneys from across the U.S. on April 15, 2021 from 11:00 a.m. – 12:30 p.m. PT as we review and evaluate the Biden administration’s first 100 days of policy moves involving environmental and natural resources management.

We will discuss efforts to fill leadership roles at CEQ, EPA, Interior, DOT and other federal agencies. Updates and analysis will be provided regarding key areas of policy, legislation and regulation, including:

• Climate ...

When a property owner suffers damage as a result of the actions of a public agency or public improvement, the owner typically pursues typical tort causes of action against the agency, along with a claim for inverse condemnation. While liability for the tort claims is decided by a jury, liability for inverse condemnation is determined by a judge. So what happens when both claims are pursued simultaneously -- should the judge rely on the jury’s determination of causation, or should the judge make his or her own findings? 

Recently in Amedee Geothermal Venture I v. Lassen Municipal ...

In California eminent domain cases, appraisers typically have relatively wide latitude in determining fair market value for the property to be acquired. However, there are certain rules they must follow, and when an appraiser violates those rules, the appraiser’s opinion may be completely stricken, leaving a property owner or a public agency with no valuation evidence. This is precisely what happened in a new unpublished California Court of Appeal decision, Solano Transportation Authority v. Anderson (2021 Cal.App. Unpub. LEXIS 2129), where the property owners’ ...

On April 21, 2021, I will be participating in the sixth annual International Right of Way Association (IRWA) Chapter 57 and Southern California Chapter of the Appraisal Institute's (SCCAI) Virtual Joint Meeting. I will be a co-presenter discussing "Project Benefits - Do They Ever Apply, and If So, How Are Benefits Supported?" during which we will cover project benefits and their significance in the eminent domain arena. This program will also include:

• The statutory and case law landscape that gives rise to the issue of project benefits, when and how they may apply and methods and ...

Sea level rise is a critical issue facing public agencies and property owners throughout the United States. In California alone, this phenomenon could impact thousands of residences and businesses, dozens of wastewater treatment plants and power plants and hundreds of miles of highways, roads and railways. Last year, the California Legislature introduced a number of bills that proposed to address, or anticipate, or mitigate the impacts of sea level rise in California. Almost all of those bills, however, failed to make their way to the Governor’s desk. This year, the California ...

A federal aid package that is aimed at improving aging infrastructure and stimulating new transportation projects is in the works. The Los Angeles Times recently reported on the federal initiative and what it could mean for California infrastructure and agencies. 

The article highlights a handful of the many California agencies and projects that would be vying for a portion of the funds, should the package get approved. For those of us in Southern California, there are a multitude of potential projects that would be aided by federal funds – upgraded passenger rails in anticipation ...

In order for a property owner to successfully pursue a regulatory takings claim for inverse condemnation, the owner is typically required to pursue multiple different development options, and face multiple permit denials, before a claim will be ripe. However, a recent California Court of Appeal opinion, Felkay v. City of Santa Barbara, 2021 Cal.App. LEXIS 225, held that “multiple applications are not required where the permit denial makes clear that no development of the property would be allowed under any circumstance.”

Background

In this case, a property owner applied to ...

Providing listeners a convenient and concise medium to access timely reports on important land use topics, Nossaman’s recent podcast offerings make a great addition to your professional playlist.

First, check out Nossaman’s own Digging Into Land Use Law podcast, which covers the development of all things in, on or above the ground. Recently, I recorded the episode “Valuation and Damages: Assessing COVID-19’s Economic Impact.” Changes in how businesses operate, restrictions on property use and reduced revenues brought on by mandated closures due to COVID-19 have had ...

Sometimes there is a case that seems to perfectly address the legal issue you are trying to make and the facts line up, but the case is unpublished. According to the California Rules of Court, rule 8.1115, unpublished cases generally cannot be relied upon. But, if you are quick enough, there is a possible way to request such cases become published.

This was a question we recently received during our 2020 Year-in-Review Eminent Domain webinar. If you weren’t able to join us during the webinar, you can still watch the recording here. Also, keep an eye out for other Nossaman webinars, as ...

While nobody could have anticipated the challenges of 2020, the right-of-way industry worked through difficult issues to move critical infrastructure projects forward. On February 11, 2021, our Eminent Domain & Valuation Group presented “Eminent Domain in 2020: A Year in Review,” during which we discussed decisions in key cases and trends from California and around the country that will continue to impact the right-of-way industry going forward. If you were not able to attend the live session, we invite you to watch the on-demand presentation at your convenience. 

We have been following for some time now the COVID-19 takings lawsuits that have been popping up since California’s first closure orders. As we previously reported, these cases did not seem to be making much traction in the courts. However, one ongoing case in the United States District Court for the Southern District of California may be trending in the opposite direction.

In the case of Bols v. Newsom (2021 U.S. Dist. LEXIS 15237), Plaintiffs’ businesses (commercial landlord, hair and nail salons) were deemed non-essential per the public health orders and experienced the ...

The Refugio Oil Spill in 2015 resulted in not only impacts to a highly diverse stretch of California’s coast, but also years of associated litigation. In a recent California Court of Appeal opinion, State Lands Commission v. Plains Pipeline, L.P., No. B295632 (Nov. 19, 2020), the court held that the judicial doctrine establishing that public utilities do not owe the public a duty to provide their services continuously and without interruption did not apply to Plains Pipeline, L.P. and its affiliates (collectively, “Plains Pipeline”) on the ground that despite being a public ...

Typically, when a public agency acquires property by eminent domain, it names all potentially interested parties in the condemnation action. This includes the property owner, any easement holders, lien holders and usually businesses as well. If the agency does not name all interested parties, anyone with an interest may still appear in the action. Or if the party does not appear, it could potentially file a subsequent inverse condemnation action for the taking of its property interest (which could expose the agency to attorneys’ fees -- hence the importance of naming all ...

Sometimes a public agency ends up abandoning an eminent domain proceeding, even after the property owner or business has moved from the property. Under Code of Civil Procedure, section 1268.620, if a defendant “moves from property” and the agency subsequently dismisses the suit, the owner/business may be able to recover payment of all damages proximately caused by the proceeding and its dismissal.  One would think determining whether an owner/occupant has “moved” from the property would not be an issue for dispute.  But a recent unpublished California Court of Appeal ...

While there is a healthy debate over just how much the sea level will rise over the next 50 years, there is at least a general consensus that the sea level will rise.  What this means for those on the coast depends on the jurisdiction.  Some jurisdictions will attempt to armor the coast, protecting the structures that exist for as long as they can.  Others will pursue a policy of managed retreat, allowing the ocean to creep inward unabated.  In California, the Coastal Commission has expressed a preference for managed retreat.  However, because of the negative connotations associated with that ...

When the government requires a property owner to give up private property, the takings clause normally comes into play and the government is required to exercise its power of eminent domain. But is that always the case? According to a recent court of appeal opinion, People v. Gonzalez (Nov. 24, 2020, D077208), there are a number of circumstances in which the government can require a property owner to sell without triggering a taking of private property.

In Gonzalez, a property owner was charged with using his property without a permit or variance and maintaining an unauthorized ...

On December 3, Brad Kuhn and Maya Hamouie will co-present “Business Valuation and Damages: Assessing COVID-19’s Economic Impact” at the virtual lunch hosted by Chapter 1 of the International Right of Way Association (IRWA) for its members.

Brad and Maya will review the impacts of COVID-19 on the economy, discuss business valuation methodologies and how to take COVID-19 into consideration, then review how these scenarios are playing out in litigation. Following the presentation, they will have an interactive Q&A session with members of the audience.

Chapter 1 of IRWA seeks ...

The U.S. Supreme Court recently agreed to decide whether a California regulation allowing union organizers to access employers’ property is an unconstitutional taking under the Fifth Amendment.

In the lower court’s decision, Cedar Point Nursery v. Sheroma, a two-judge majority of the Ninth Circuit Court of Appeals rejected a claim by a group of employers that the regulation created uncompensated easements on their property. The California Agricultural Labor Relations Board regulation permits union organizers to use an employer’s property for up to three hours per day ...

When a public agency seeks to acquire property by eminent domain, the agency’s appraiser sometimes forgets to account for unique value attributes of the property. For example, the valuation may fail to take into account income the property generates from a billboard or a cell tower. According to an article on KCRA News, 'I think they are a bunch of thieves': Auburn couple decries Caltrans' eminent domain move, this situation is currently playing out in Northern California. …

As the world continues to grapple with the devastating impacts from COVID-19, local government agencies are finding ways to help local businesses survive while still complying with the complex maze of regulatory requirements. As just one example, many cities and counties are permitting restaurants and other businesses to offer outdoor dining and other services, including granting permits to operate on the public sidewalk or in streets. However, in some cases, while those outdoor operations may benefit some businesses, other businesses are complaining about the resulting ...

Each year, the Counselors of Real Estate organization polls its members and thereafter releases a summary of the “Top 10 Issues Affecting Real Estate.” You can find the article here. 

As expected, COVID-19 dominated the headlines and ranked number 1 on the list of issues. Aside from the personal, emotional, and economic toll, COVID-19 raises serious questions about the future demand for real estate, and whether it will be reduced by the “virtual office” and preference for home entertainment? There is a huge question mark regarding how long social distancing will persist, and ...

If you know someone with property that borders, is adjacent to, or abuts a natural lake, pond, bay, sea, or ocean, they may have littoral property rights. What that means is they may have the right to build a pier out to the line of navigability, a right to navigation, a right to accretion, and a right of access. I say “may” because these rights can be qualified rights, or simply nonexistent. Furthermore, determining whether such rights exist and, if you are lucky enough to have them, their extent can be a complicated endeavor. Then again, sometimes the analysis can be quite simple, such ...

When a public agency is acquiring private property for a public project, typically the key issue in dispute is how much the agency should pay -- what is “just compensation”? Determining the property’s value and any damages from the acquisition or public project is usually based on appraisals prepared for the public agency and property owner. A recent article written by Lauren Alexander, on behalf of the Owners' Counsel of America (a network of experienced eminent domain attorneys dedicated to defending the rights of private property owners across the US), highlights the top 10 ...