We were amazed to learn from the Pacific Legal Foundation Liberty Blog that there is an organization out there named — are you ready? — People for the Ethical Treatment of Property Owners.
Being a Californian and thus an inhabitant of a place where property ownership, notably in the form of undeveloped land, is disfavored even if not yet a crime, we sure recognize the need for such an outfit and think that its emergence as a litigant is a good thing. But the fact that there is a need for such an outfit — and there sure is — is depressing.
When San Francisco decided to acquire the owners’ land, negotiations ensued and at the end it offered $3,800,000. The owners asked for $10,875,000. Unable to agree, the parties went to trial, where the city formally offered $5,000,000, subject to a contingency: the settlement would have to be approved by three other government entities.
After trial, the jury came back with a net award of $7,319,000 ($7,400,000 value award minus $81,000 cleanup costs). The owners requested attorneys fees and other litigation expenses under a California statute that awards litigation expenses to owners when their demand is reasonable but the condemnor’s offer isn’t. But the trial judge refused to award any litigation expenses because he thought the city’s offer was reasonable.
The owners appealed, and the California Court of Appeal reversed, holding that such a contingent “offer” was no offer at all because its acceptance by the owner would not produce agreement on compensation, but only an invitation to further negotiations with the three government agencies who at that point had not committed themselves to any figure. Thus, the city’s “offer” was not reasonable.
Held: Reversed and remanded. San Francisco v. PCFA Acquisitionco, Docket No. A 139836, filed May 26, 2015. You can see the opinion at http://www.courts.ca.gov/opinions/documents/A139836.PDF
We were on the road for a few days and as a result missed an interesting news item. While the California high-speed “bullet train” line between San Diego and San Francisco is being planned, and a segment of it has actually begun to be constructed out in the boondocks in the Central Valley — well, actually, a batch of condemnation resolutions have been passed to acquire the right of way — it turns out that what seems to us to be a rather significant aspect of the planned high-speed train is in a state of chaos.
According to a Los Angeles Times front-page story, nobody has a handle on the operational costs of the proposed train, and nobody knows what to charge its passengers. See Ralph Vartabedian and Dan Weikel, Tracking the Bullet Train Numbers, LA Times, May 10, 2015, at p. A1. Nobody, it seems, has penciled out the fares necessary to be charged in order for that train to make it financially. A while back, when California voters were snookered into approving the “bullet train,” they were told that the fare would be “about $50 a person.” But since then projected fares have been projected as “$83, $105 and most recently, $86.” Add to that the fact that no one seems to know how many people travel between San Francisco and Los Angeles by car, and that current fuel costs for such a trip run about $65, and you can see that deciding what to charge would-be passengers can get pretty difficult. Oh sure, if you take all car owning expenses the cost of such a trip would be $222, but as the Times notes — accurately, we believe — people don’t figure that way; they look at the cash outlay for gas when they contemplate a car trip. Besides, once they own a car, they pay the cost of depreciation and insurance even if the car mostly stays in its owner’s garage. So while considering such costs may be good cost accounting, it isn’t how people decide what the trip will cost them.
Bottom line, like we said, nobody knows what the cost of a train trip between LA and San Francisco will or should be. We like the line of a USC transportation professor who is quoted by the LA Times as observing that “Any time you are trying to project more than five years out, you are just spitballing.” And it will take a lot longer than five years for that train to become operational. So stay tuned and see how it all turns out.