California Eminent Domain Law

Eminent Domain in California

Few issues evoke such strong opposition as the taking of private land through eminent domain for a public use. When it comes to eminent domain, the government is playing in their arena; they do this every day. They know what the rules are, they know how the rules affect them and they know how the rules affect property owners. If the government is taking your land, make sure that you become informed so that you know what you can and cannot do. Learn more about eminent domain generally and what you’re entitled to receive, or continue reading to learn about the California eminent domain process, your rights as a property owner and hiring a California eminent domain attorney. Did you know that most eminent domain attorneys work on a contingent fee basis? With this fee structure, the attorney assumes the risk of earning a fee.

California Eminent Domain Process

In the state of California, the eminent domain process can only be stopped if the proposed taking does not meet the requirements for public purpose or public necessity. If you have determined that the proposed taking does meet these requirements, then you should learn more about the California eminent domain process.

Remember, even if the government has the right to condemn your property, they cannot dictate the price they are willing to pay; compensation is determined by the highest and best use laws for your property.

California Property Rights

The eminent domain abuse dialogue often centers on policy issues involving the right to take property for economic development and blight. Since the landmark case of Kelo v. City of New London in 2005, many states have taken measures to help curb eminent domain abuse. Some states were very successful at passing meaningful reform, and other states failed to pass any legislation at all. Most states fall in the middle by passing legislation that looks good on paper but does little to level the playing field between property owners and the government.

Since the decision by the United States Supreme Court in Kelo v. City of New London many states across the country have taken measures to help protect the rights of private ownership.  The controversial Kelo decision held that a local government can take the private property of one person and give it to another private entity.  While the Court’s ruling was seen by many as a serious blow to citizen’s constitutionally protected rights of private property ownership, the decision prompted a number of states to initiate legislative reform to help curb eminent domain abuse.

The Castle Coalition has released a report, grading each of the states based on their efforts to protect private property owners and their rights based on changes in their respective state laws.  The Castle Coalition is the Institute for Justice’s nationwide grassroots property rights activism project that teaches home and small business owners how to protect themselves and stand up to abuse by governments and developers who seek to use eminent domain to take private property for their own gain. The Castle Coalition gave a letter grade of a “D” to the state of California for property rights.

In 2006, Senate Bills 53, 1206, 1210, 1650 and 1809 were passed in the state of California, all of which simply added additional procedural requirements for condemning authorities to go follow through with prior to condemning private properties. Unfortunately, these bills do not address the issue of private party transfers or the state’s definition of blight; meaning that condemning authorities are still able to use eminent domain for private economic development.

Recent Case Law

On June 15th, 2010, the Sixth District Court of Appeals of California issued it’s decision in County of Los Angeles vs. Glendora Redevelopment Project.  In this case, Los Angeles County sued Glendora for not making proper blight findings when preparing their redevelopment plan.

The State of California has four requisites for blight finding that were evaluated by the Court of Appeals in this case:

1. The area must be ”predominantly urbanized”;

2. The area must be “characterized by” one or more conditions of physical blight;

3. The area must be “characterized by” one ore more conditions of economic blight; and

4. These “blighting conditions must predominate in such a way to affect the utilization of the area, causing a physical and economic burden on the community”

The Court of Appeals determined that Glendora had not met the “physical blight” test by looking at each of the four statutory basis for determining “physical blight”: (1) unsafe or unhealthy buildings, (2) code violations, (3) dilapidation or deterioration, and/or (4) defective design or construction.

The court agreed with the county that there was no substantial evidence in their redevelopment plan of any of these conditions.  The court upheld the trial court’s invalidation of Glendora’s Redevelopment Plan.

Viewpoint

While the trial court was willing to thoroughly evaluate the blight findings to determine they did not act in accordance with the law, what does this really mean for property owner rights?   It appears that the nature of this case relates only to the procedural requirements mandated by law.  Had Glendora included the necessary evidence for “physical blight”, there would likely be no case, or the court would likely have ruled in favor of the Glendora Redevelopment Plan and therefore allowed the private to private transfer of land.

Public agencies planning a redevelopment project will likely use this case as a guide when developing their plans and submitting their evidence for blight determination.  Will CA’s tightened definition of blight simply act as another procedural requirement agencies must follow in order get their plans approved, or will it prevent the use of eminent domain when it is unjustified?  With the statutory blight designations still vaguely defined, there is a high likelihood that private to private transfers of property will continue to occur in an unjustified manner.

Hiring an Eminent Domain Attorney in California

The most blatant form of eminent domain abuse occurs when the government or condemning authority makes a ‘low ball’ offer. This scenario invariably requires the property owner to hire an attorney to obtain just compensation. Fortunately, the vast majority of eminent domain attorneys work on a contingent fee basis, meaning they charge a percentage of the additional money they obtain for the property owner. Also, California has passed legislation requiring the condemning authority to pay the property owner’s attorneys fees and costs in eminent domain cases if certain criteria are met.

Very few attorneys can claim expertise in the area of eminent domain law. To determine if you have a case, make sure you consult with an eminent domain trial attorney who can effectively identify damages and select the necessary experts. Your attorney should also be able to interface with the condemning authority and be willing to take your case to trial if negotiations can not be reached.

As you are likely aware, taking matters into your own hands when it comes to eminent domain is highly discouraged, and could result in a scenario where you do not receive just compensation. For instance, you could end up ruining a good claim by attempting to negotiate with the condemning authority prior to consulting with an eminent domain attorney, or you might settle for much less than what you deserve. Please read Why Act Now in our Resource Center to learn more about why you should hire an eminent domain attorney early in the process.

Did you know that in the state of California, attorney’s fees may be paid for and costs might be reimbursed to the property owner? We discuss in the next section.

Attorney Fee Recovery Statutes in California

Attorney’s fees may be recoverable in the state of California under certain circumstances. The court may award attorney’s fees within 30 days of judgment and upon motion by the property owner if the court finds that the government’s final offer was unreasonable. (CA CIV PRO § 1250.410(b)). If there are more than two property owners in a condemnation case, then issues concerning costs of the title may be awarded at the court’s discretion. (CA CIV PRO § 1268.710) Additionally, attorney’s fees may be recovered if the action is dismissed, regardless of the reason. (CA CIV PRO § 1268.610).  Lastly, pursuant to CA CIV PRO § 1268.710, attorney’s fees can be recoverable if a property owner is successful at pursuing an inverse condemnation claim.

In California, the court has set forth mathematical formulas for determining reasonableness. If the government’s final offer is more than 85% of the jury’s verdict, the offer is reasonable per se. Alternatively, if the offer is below 60% of the jury’s verdict, the offer is deemed unreasonable. If the final offer by the government is between 60-85% of the jury’s verdict, the court balances the demand by the property owner and the offers by the government, considering (1) the monetary differences between those offers and compensation awarded, (2) the percentage difference between the offers and the award and (3) whether the demand and offer was calculated with good faith, care and accuracy. Property owners must also be aware that these ranges can be held against their offers and demands as well.

Additionally, whether fees can be recoverable on both a contingent fee and hourly basis is generally open to interpretation by the courts. Also the question remains as to what hourly rate is considered reasonable? While juries in California have found that hourly rates as high as $400/hour are reasonable, court decisions in California have not been consistent when awarding attorney fee recovery on a contingent fee basis. Some courts have awarded fees on the basis of a contingency fee agreement and others have ignored the contingent fee agreement.

Summary

Because of the size and abundance of private properties in the state of California, the legislative reform passed within the last few years doesn’t provide enough security for private property owners. Private party transfers are still allowed by law, and the definition of blight is still addressed in a vague definition. As one of the states where higher numbers of properties are affected, not only does the state need stronger reform, it needs state constitutional changes that will permanently support property owners. Senate Bill 53, Senate Bill 1206, Senate Bill 1210, Senate Bill 1809 and Senate Bill 1650.