California eminent domain law generally provides that a government agency's impairment of a property's access is not compensable unless the impairment qualifies as "substantial". Dozens of cases have addressed access impairment claims raised by property and business owners both in the traditional eminent domain context and through inverse condemnation actions, and while there are some general guidelines that can be established, many times the determination of whether an impairment qualifies as "substantial" will depend on the particular facts of the case.
Take for example a recent district court decision in Wardany v. City of San Jacinto (May 27, 2011). The property and business owner operated a general convenience store -- "One Stop Market" -- on Ramona Boulevard in the City of San Jacinto. In order to improve safety, the City decided to place a mile-long center median down Ramona Boulevard, which eliminated the ability of vehicles to make left-turns in and out of the One Stop Market property. Vehicles traveling north could still make right turns in and out, but vehicles traveling south were now required to go up to the next break in the median and turn around or take side streets. The owner claimed that the center median diverted business and One Stop Market suffered a 55% decline in sales; an inverse condemnation action followed.
Before reading the Court's analysis and holding, my insticts told me this type of access impairment would not be compensable, and the owner would be out of luck. As they say, you should always trust your instincts. (Although I'm quite confident I would not have told you if my instincts were wrong.)
The Court struck down the owner's regulatory takings claim, concluding that the owner still had an economically viable use of the property. The Court also rejected the owner's access impairment claim, finding that the "evidence fails to establish that ingress or egress from Plaintiff's property has been completely obstructed," and therefore, there was no "cognizable taking claim under either the Fifth Amendment or the California Constitution."
Some property and business owners may not necessarily agree with the Wardany Court's line of reasoning. But courts have traditionally required a high -- or "substantial" -- level of impairment before finding liability with the reasoning that public infrastructure projects and important street improvements would not get accomplished if government agencies were required to pay property and business owners every time a project resulted in a decline in a property's value or a business' sales. It's been said that this is the risk we take living in a modern society.
UPDATE: see our e-alert for a more detailed report on the Wardany case.
Brad Kuhn serves as Chair of Nossaman's Eminent Domain & Valuation Group, likely the largest group of skilled eminent domain attorneys in California and the United States. Brad is a real estate and business litigation attorney, with ...
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