In 2011, Pasadena was hit by a powerful storm carrying hurricane force winds that injured more than 5,000 City-owned trees, 2,000 of which were uprooted.  During the course of the storm, an approximately 110 foot tall Canary Island pine tree located on City property fell on a private residence, causing severe property damage.

The homeowners’ insurer paid more than $700,000 in insurance benefits.  As subrogee under the homeowners’ insurance policy, the insurer sued the City for inverse condemnation, under the California Constitution, on the theory that the City owned the tree and maintained and cared for it as part of the City’s tree protection regulations.  The trial court agreed and found the City liable in inverse condemnation on the grounds that the tree that fell was a public improvement maintained for a public purpose, the damage to the residence was proximately caused by the improvements, and the City is strictly liable for the property damage.  The court awarded the insurer approximately $800,000 in damages and $330,000 in costs.

On August 24, 2017, in Mercury Casualty Company v. City of Pasadena, __ Cal.App.5th __ (Case No. B266959 & B268452), the Court of Appeal for the Second Appellate District reversed the trial court judgment and cost order.

Continue Reading The Takings Tree?

Martins Beach, near Half Moon Bay in the County of San Mateo, is the subject of protracted litigation on various fronts stemming from tech billionaire Vinod Khosla’s 2009, decision to change the public’s access to and use of Martins Beach by permanently closing and locking a gate to the public across Martins Beach Road, adding signs to the gate, changing the messages on a billboard on nearby Highway 1, and hiring security guards to deter the public from crossing or using the property to access the beach.  From the 1930s or earlier, Khosla’s predecessor encouraged the public to use the road to access Martin’s Beach.  They also erected the billboard, which invited the public to use the beach, and provided a general store, public toilets, and a parking area.  For some of that time they charged a $.25 entry fee.

We wrote about one strand of the litigation last year—Friends of Martin’s Beach v. Martin’s Beach 1 LLC, 246 Cal.App.4th 1312 (2016)—in which the California Court of Appeal for the First Appellate District addressed an unincorporated association’s lawsuit seeking access to the coast at Martins Beach based on claimed rights of access under various theories.  In Friends of Martins Beach, the Court of Appeal held that a plaintiff group had alleged facts sufficient to state a common law dedication claim and thus remanded that claim to the trial court.  Because the Friends of Martin’s Beach case is still pending there, the existence of public access rights to Martins Beach is presently undetermined.

Continue Reading California Court of Appeal Again Rules in Favor of Public Against Billionaire Owner of Martins Beach

On June 23, 2017, the Supreme Court of the United States finally decided Murr v. Wisconsin, __ U.S. __ (2017) (Case No. 15-214), a case that addressed land use regulations that “merged” adjacent parcels (the first of which was developed with a cabin, and the second of which was undeveloped) into one, for environmental reasons, despite the fact they were separately acquired, owned, taxed. The regulations ultimately prevented the development or sale of the second, undeveloped parcel.

The case sought an answer to the fundamental question, in a regulatory taking case, whether the “parcel as a whole” concept described in Penn Central Transportation Company v. City of New York establishes a rule that two legally distinct, but commonly owned contiguous parcels, must be combined for takings analysis purposes? The State of Wisconsin argued for a rule that would tie the definition of the parcel to state law, considering the two parcels in this case merged under the challenged regulations. The landowners argued for a rule that the lot lines define the relevant parcel.

Continue Reading SCOTUS Announces New Multi-Factor Test to Determine the Relevant Parcel in Regulatory Takings Cases

Last September we wrote about 616 Croft Ave., LLC v. City of West Hollywood, an opinion from the Court of Appeal for the Second Appellate District upholding a nearly $555,000 in-lieu fee on an 11-unit residential infill project because the fee was “related to the cost of constructing affordable housing units within the City.”  Among other things, we noted that the case “underscores the ongoing need for the United States Supreme Court to finally address whether the heightened scrutiny of the Nollan, Dolan, and Koontz Fifth Amendment takings cases applies to legislatively imposed permit conditions.”

On December 21, 2016, the California Supreme Court denied a petition to review 616 Croft Ave., LLC.  A petition for writ of certiorari was filed on March 15, 2017 (Case No. 16-1137), giving SCOTUS its opportunity to consider the case.

Continue Reading New Cert Petition Asks SCOTUS if Legislatively Mandated Permit Conditions are Subject to Heightened Scrutiny

As we have previously reported, the California Supreme Court in Property Reserve, Inc. v. Superior Court (2016) 1 Cal.5th 151, ruled that the California statutes allowing precondemnation entry by the government to test and inspect property (Code Civ. Proc., §§1245.010 et seq.) are constitutionally valid, subject to reformation to permit a landowner to obtain a jury determination of damage caused by the entry.  Having dealt with the issue of constitutionality of the precondemnation entry statutes, the Supreme Court remanded the matter to the Court of Appeal to resolve several remaining procedural issues.

The Court of Appeal’s opinion on remand, filed December 16, 2016, addresses those procedural issues and provides guidance as to how the Supreme Court’s holding will work in practice.  The opinion on remand clarifies (i) that a landowner may seek discovery in connection with a petition for precondemnation entry, and the concurring opinion by Justice Blease (who dissented from the original Court of Appeal opinion) clarifies (ii) that in the event the government proceeds with acquisition of the property, the claim for precondemnation damage may be asserted by means of a cross-complaint in the main condemnation action.

Continue Reading <i>Property Reserve</i> and Precondemnation Entries – The Epilogue

In 2005, the United States Supreme Court decided in Kelo v. City of New London, 545 U.S. 469 (2005), that the Constitution allows the government to take private property through eminent domain for the purpose of “economic development,” which it held to constitute a “public use” under the Fifth Amendment. The 5-4 decision sparked a nationwide backlash in which more than 40 states and the federal government adopted eminent domain reform legislation designed to prevent these types of takings.

The case remains exceedingly controversial and has been compared to some of the Supreme Court’s worst decisions, including Dred Scott v. Sandford (denying citizenship to black people and expanding slavery), Plessy v. Ferguson (upholding state racial segregation laws for public facilities under the doctrine of “separate but equal”), and Bowers v. Hardwick (upholding a conviction under a state law criminalizing “homosexual sodomy” (in the privacy of one’s own home)).

Continue Reading <i>Kelo</i> Gives a Reasonable and Long-Accepted Reading of the Fifth Amendment, but it Remains one of the Supreme Court’s Worst Decisions

On September 23, 2016, the Court of Appeal for the Second Appellate District affirmed a trial court decision denying a petition for writ of mandate filed by a developer challenging various fees—totaling nearly $600,000—in connection with an 11-unit subdivision and condominium complex in West Hollywood.  616 Croft Ave., LLC v. City of West Hollywood, __ Cal.App.5th __ (2016) (Case No. BC498004).

The case is the first reported appellate decision to rely upon the broad holding of the California Supreme Court’s blockbuster 2015 affordable housing case, California Building Industry Assn. v. City of San Jose, and it boldly highlights the far reaching implications of that ruling.  In my opinion, it also underscores the ongoing need for the United States Supreme Court to finally address whether the heightened scrutiny of the Nollan, Dolan, and Koontz Fifth Amendment takings cases applies to legislatively imposed permit conditions.  We wrote about that issue earlier this year after the U.S. Supreme Court denied certiorari in the CBIA case, and we note that the Court will soon have another opportunity to grant certiorari on this important issue.

Continue Reading Court Rejects Takings Challenge to City’s Imposition of $550,000 in Fees for 11-Unit Infill Project

It is not often that the California Supreme Court steps in to reform legislation that would otherwise be unconstitutional, but that’s what it did in Property Reserve, Inc. v. Superior Court (S.Ct. No. S217738), issued July 21, 2016.  The legislation was Code of Civil Procedure sections 1245.010-1245.060, which authorizes precondemnation entry and testing activities by the government on property being considered for condemnation.  The statute contemplates a petition being filed by the government describing the entry and testing desired, which the court can authorize after hearing.  The court may also require a deposit into court to compensate the property owner for damage to his or her property resulting from the government’s activities.

Continue Reading California Supreme Court Salvages Precondemnation Entry Statute by Reforming to Include Right to Jury

In its second major eminent domain opinion in as many months, the California Supreme Court in City of Perris v. Richard C. Stamper (S.Ct. No. S213468), issued on August 15, 2016, deals with two issues:  First, is it the role of a judge or a jury to make the preliminary determination of whether a public dedication requirement affecting valuation in an eminent domain case is constitutional?  Second, to what extent does such a dedication requirement constitute a “project effect” which must be ignored in determining the value of condemned property.  The 50 page opinion, complete with a concurrence and dissent by Justice Cuellar, is thorough and comprehensive.

A little background to set the context:  The City of Perris sought to condemn a 1.6 acre strip through the middle of defendant’s property in order to build a road.  The property was undeveloped agricultural land, but the property owner argued that he should be compensated based on the highest and best use of the property, namely light industrial land.  The City responded that any development of the property to light industrial use would trigger a requirement by the City that the same strip of land be dedicated for road construction.  Thus, the rule articulated in City of Porterville v. Young (1987) 195 Cal.App.3d 1260, applied: when a city takes a portion of undeveloped property that it would have lawfully required the owner to dedicate to the city as a condition of developing the remainder of the property, the owner is entitled to compensation based on the undeveloped state of the property (here, agricultural), rather than its highest and best use.

Continue Reading In A Condemnation Case, The Judge – Not Jury – Decides If A Dedication Requirement Meets Constitutional Muster

On April 26, 2016, in Boxer v. City of Beverly Hills, 246 Cal.App.4th 1212 (2016), the Second District Court of Appeal roundly rejecting a takings lawsuit premised on alleged impairment of private views and speculative risk of fire danger caused by coastal redwood trees planted in a city park.

Continue Reading Impairment of Views from (or to) Private Property Does Not Constitute a Taking Requiring the Payment of Just Compensation