Yes Virginia, There Is Eminent Domain Law in California

If you want to see a solid, unanimous eminent domain opinion by the California Supreme Court, the kind that we often need but rarely get in this field of law,  see Metropolitan Water District v. Campus Crusade for Christ, filed July 23rd, 161 P.3d 1175, 41 Cal.4th 954, 62 Cal.Rptr.3d 623 (2007).  It’s a straightforward expositive opinion that lays out the proper purview of decision-making by juries as opposed to judges, and straightens out preexisting confusion in California eminent domain law concerning  burden of proof.

The trial judge overruled another trial judge and granted a series of MWD’s motions in limine whose combined effect was to forbid Campus Crusade to present any evidence of severance damages, ruling in the process that a condemnee has the burden of persuasion and that here, Campus Crusade failed to carry it.

On the latter point, lawyers for MWD had the chutzpah to argue that, notwithstanding an express California statute abolishing burden of proof in eminent domain cases, the condemnees still had the burden of proof on every factual issue, except for the “bottom line” award.  The court disagreed. It responded by differentiating between the burden of going forward with the evidence (which is on the condemnee) and the burden of persuasion on which neither side has the burden of proof. Besides, severance damages are the difference between fair market value of the subject property in the before condition and that of the remainder in the after condition. Thus, said the court, calculation of severance damages inherently involves valuation of the subject property — a classic jury issue.

The trial judge made his ruling of no severance damages even though the taking was for a water tunnel so designed that in case of an earthquake it would rupture a few feet under the surface of the subject property and inundate it at the rate of thousands of cubic feet of water per second.  And did I mention that this tunnel crosses the San Andreas fault right under the subject property? It does.  

The California Court of Appeal, reversed the second trial judge,  and now the state Supreme Court has affirmed that holding.

This opinion also holds that the issue of highest and best use (where such use is other than the currently pernitted one) is also for the jury, with the condemnee required to present enough evidence to cross the threshold of substantiality. The judge only acts as a gatekeeper charged with making sure that there is sufficient substantial evidence to raise the issue. From then on, probability of rezoning is a jury question.

The Cheese Stands Alone

This time it’s the Missouri Supreme Court in Centene Plaza Redevelopment Corp. v. Mint Properties, et al. (Mo. 2007) 225 S.W.3d 431, that struck down an attempt to use the eminent domain power for economic redevelopment. The court held on statutory grounds that a redeveloper authorized to condemn land for redevelopment, failed to present sufficient evidence to establish blight justifying the taking. Strictly read, the Missouri statute requires a showing of both economic and social liabilities in a blighted area. Here, the subject property was in Clayton, Missouri, evidently a prospering community. Reading the opinion we got a hunch that it took an effort to keep a straight face to argue that this was a “blighted” area in need of redevelopment.

In the end, the court found an absence of “social liability” which, as noted in Judge Stith’s concurrence, has not been defined in Missouri statutory and decisional law. The court rejected the condemnor’s bootstrapping argument that inasmuch as the redevelopment would produce an increase in jobs and would provide a “‘vibrant,’ pedestrian-friendly  atmosphere that would result from the redevelopment,”  a finding of blight was proper. Nothing doing, said the court, “The city’s ultimate goals for the area cannot serve as probative evidence of social liability in light of the lack of evidence concerning the state of public health, safety, and welfare in the record.”

So what we have here is another right-to-take case from a state supreme court, and another rejection of the Kelo anything-goes approach.  So far, Illinois, Michigan, Ohio, Oklahoma and South Carolina have rejected the Kelo approach of taking at face value whatever the condemnor-municipality offers as evidence, even when that “evidence” can only be said to bear a rational relation to the conceivable. In the Show-Me state it will take more than that.

The US Supreme Court’s majority now stands effectively isolated from the mainstream of American judicial thought on the right to take.

You Can’t Get there from Here

This is one of those quotes that defies commentary:

“[I]f federal and state [taking] claims ripen at the same time, then neither could ever get started.” Hallco Texas, Inc. v. McMullen County (Tex 2007) 221 S.W.3d 50,  59

This brings to mind that apocryphal (or was it?) 19th century Missouri statute that said: “When two trains proceeding in opposite directions on parallel tracks meet, they shall both stop and neither shall proceed until the other has passed.”

Ain’t law grand?

Franz Kafka Weds Alice in Wonderland

For many years law has been the subject of parodies, but now it has become a self-parody. If you don’t think so, read Judge Posner’s opinion in Rockstead v. City of Crystal City (7th Cir. 2007) 486 F.3d 963. If you aren’t familiar with the wretched intellectual mess that passes for ripeness rules in  takings law, pay close attention — we are about to start moving the pea in this shell game.

In Williamson County Planning Commission v. Hamilton Bank (1985)  473 U.S. 172, the Supreme Court held that unlike other Americans whose constitutional rights have been violated, property owners are not entitled to sue in federal court when their land is taken without compensation in violation of the Fifth Amendment. How can that be? Well, explained the court, the Constitution does not forbid takings of private property, only takings without compensation. So until the aggrieved property owners sue is state court and are denied compensation there, their constitutional right has not been violated by the taking of their property. Their federal claim becomes ripe only then. What’s wrong with that, you ask? Answer: everything. The problem is that the same is true of life and liberty as well as property. The Constitution does not forbid deprivations of life and liberty either, only their deprivations without due process of law. So if one were to take the Williamson County rationale seriously (and we sure don’t) that would mean that one could not sue in federal court for violations of one’s right to life and liberty either. One would first have to repair to state court and sue there first to obtain the lacking due process. So if you think about it, it becomes clear that the Williamson County rule could not have been formulated in good faith. It was rather a convenient device ginned up ad hoc to spare the federal courts the need to deal with regulatory takings problems on the merits.

So what happens when aggrieved property owners do exactly what Williamson County says they must do, and file their inverse condemnation action in state court and lose? Now that their federal claim is ripe, do they then get a fair shot at the federal court? Nope. It now turns out that federal courts treat the state court decision as res judicata and tell the aggrieved plaintiffs that the joke is on them — that having spent years and fortunes litigating in state court in order to ripen their federal claim as required by Williamson County, their federal claim won’t be heard at all — neither in state nor in federal court. That was the holding of the wretched San Remo Hotel case (545 U.S. 323). 

So far, so bad. But it gets worse. In the states that as a matter of law refuse to provide an inverse condemnation remedy, the federal courts carve out an exception to this rule and allow the aggrieved property owners to sue directly in federal court. That was the case in the Del Monte Dunes case which was filed directly in federal court because at the time California did not allow inverse condemnation actions for regulatory takings.

So those unfortunate property owners in the Rockstead case argued that their case fit within that exception. The Illinois Supreme Court had ruled in 1948 that intermittent floodng of private land (the situation at hand) did not give rise to a valid inverse condemnation claim. So the owners were unable to assert a valid state law claim and should have been home free under Monterey Dunes. Right? Wrong! Enter Judge Posner who unleashes his considerable intellectual resources in an effort to come up with an ingenious way of dumping the owners. How? Well, says Posner, that Illinois case is old (decided in 1948) so maybe the Illinois Supreme Court will change its mind now if asked to reconsider. Also, he says, he has discerned a “glimmering” of recognition of the owners’ point in Illinois state decisional law. So maybe the state courts will change their mind. With all due respect, what a crock! Have you ever filed a lawsuit in which you have to start in the lower courts by admitting that the law is against you? Chances are your opponent will call it a frivolous case and ask for sanctions.

More important, in Williamson County the  Supreme Court was clear that the compensatory state law remedy must be “reasonable, certain and adequate.” (473 U.S. at 194, emphasis added). So is having to go to a state supreme court (which is at best an uncertain effort because that court doesn’t have to take your case) and asking it to overrule its own precedent on no bettter grounds that it is over 50 years old, what Judge Posner deems to be a remedy that is “reasonable [and] certain”? Give me a break, Your Honor. Better still, give common sense a break.

Quick Take Too Quick on the Draw

California’s late Chief Justice Roger Traynor once observed that there are notions embedded in the law that have never been cleaned and pressed and might disintegrate if they were. The Maryland Court of Appeals (that State’s highest court) has just done some cleaning and pressing of quick-take law, and guess what? It disintegrated.

Quick take (or prejudgment possession) is the procedure used in eminent domain cases whereby the condemnor obtains a court order granting it pre-judgment right of possession (and in some jurisdictions, title as well) without such frivolities as due process of law. Except in Florida and as of this year in California,  this is done without notice or hearing, and the hapless property owners are not even aware that this has happened to them until after the fact, when they are abruptly ordered to move out of their homes or businesses and to surrender possession. This is, of course, at varriance with procedures used in non-condemnation cases. Thus, in Fuentes v. Shevin the U.S. Supreme Court held that in a replevin action a plaintiff could not get possession of his own property before judgment, without prior notice to the property’ possessor and a hearing. The same is true in property forfeiture cases. In the James Good Realty case the Supreme Court held that the property of a person guilty of drug dealing could not be forfeited without prior notice and hearing. But no predeprivation notice and hearing in eminent domain cases, before the rightful owners of the property being taken are evicted from their homes and businesses.

Now, the Maryland court has put a stop to such shenanigans. In Sapero v. Baltimore (Md. 2007) 920 A.2d 1061, and Baltimore v. Valsamakis (Md. 2007) 916 A.2d 324 it held that before evicting the rightful owners from their homes and businesses the city had to show that there was some exigency requiring such prompt action. The court did so on local statutory grounds, so while this was good news it was not a big deal. But it became a big deal when the court also took a long overdue look at the constitutional aspects of this procedure. It held that the owners’ due process rights were violated by this procedure because it denied them the opportunity to conduct discovery necessary for the preparation of their defense to the taking. The court also noted that the city had been taking its sweet time in implementing this taking of property and started its planning process back in 1982. Since it thus proceeded in baronial leisure, it was difficult to see what the sudden hurry was about once the condemnation action was filed. The court thought that behaving in this fashion suggested that the city was using the truncated quick-take procedure as a litigation tactic to gain an unfair advanage over the owner.

Poor New London Not so Poor

You may recall that the pillar on which the Supreme Court rested its decision in the Kelo case was its conclusion that the city’s redevelopment plan was justified because of the declining condition of New London which found itself in dire economic straits and had to do something about it. It now turns out that may have been something less than accurate. The Fitch rating service has rated New London’s general obligation municipal bonds AA-, a solid investment-grade rating, on the basis of the city’s economically stable condition and a satisfactory flow of tax revenues.

Is the Kelo litigation over?

We all thought that Suzette Kelo’s fight in the courts to keep New London, Connecticut, from proceeding with its economic redevelopment project seeking to take her home for “economic redevelopment” ended in 2005 when the U.S. Supreme Court, after voting 5 to 4 to allow the city to take Kelo’s home, denied rehearing. But now it turns out that the last word has not yet been said in that litigation. While the issue of the right to take Kelo’s home was wending its way through the court system, New London environmentalists thought that the Fort Trumbull redevelopment project was not in compliance with the state environmental laws. So they sued, seeking an injunction to stop the project from going ahead.

The Connecticut trial court dismissed that action, but now the Connecticut Supreme Court reversed that dismissal. To the extent the plaintiffs sued in the wrong venue, that was not fatal. The court still had jurisdiction, and the case would be transferred to Hartford where it should have been filed to begin with. Also, the court held that the case was not moot, even though the city of New London had actually taken the homes of Suzette Kelo and her neighbors.

So it’s back to the drawing board, and it remains to be seen whether the Fort Trumbull project is legal. So stay tuned and see how it turns out. The case is Fort Trumbull Conservancy, LLC v. City of New London (Conn. 2997) 925 A.2d 292