Inverse Condemnation

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On June 10, 2023, a jury in Portland, Oregon found PacifiCorp and Pacific Power (collectively, “PacifiCorp”) liable for negligence, trespass, and nuisance based on a series of four wildfires that occurred during Labor Day weekend in 2020. PacifiCorp prevailed against the plaintiffs on the claim of inverse condemnation. With respect to the tort-based claims, the jury awarded approximately $72 million in compensatory damages to 17 plaintiffs. The jury later found PacifiCorp liable for $18 million in punitive damages, or one quarter of the compensatory damages that the jury awarded to the 17 plaintiffs. The jury’s liability findings apply to a broader class of owners, whose damages will need to be individually proven in a yet-to-be defined second phase of proceedings. Post-verdict motion practice and appeals may affect the jury’s findings.Continue Reading Beyond Inverse Condemnation in Wildfire Litigation: An Oregon Jury Finds Utility Liable for Negligence, Trespass and Nuisance

When it comes to whether unions have a right to enter an employer’s premises over the employer’s objections, California’s law is the polar opposite of the National Labor Relations Act and the law in most other states.  In California, unions generally have special access rights that nonlabor parties do not have.  Unions are given preferential treatment because of the state’s union-friendly public policies.  However, this may soon change due to the Supreme Court’s recent order granting a hearing in Cedar Point Nursery et. al. v. Hassid where the issue presented is:
Continue Reading SCOTUS to Consider Whether California Unconstitutionally “Takes” Private Property When It Compels Employers to Grant Union Access to Private Property

Pacific Shores Property Owners Association v. Department of Fish and Wildlife (1/20/16, C070201)

On January 20, 2016, the Court of Appeal for the Second Appellate District of California ruled that where a state agency assumes control of a local flood control process, and it determines to provide less flood protection than historically provided by a local agency in order to protect environmental resources, the state agency is liable in inverse condemnation for a physical taking of plaintiffs’ property, and not liable for a regulatory one. However, the agency also acquires a flowage easement as a result of the taking and the compensation provided to the property‑owners.
Continue Reading State Agency’s Intentional Flooding for Environmental Protection Results in Physical Taking of Private Property – Strict Liability Applies

Koontz v. St. Johns River Water Management District, No. 11-1447 (U.S. Supreme Court, June 25, 2013)

In Koontz v. St. Johns River Water Management District, the Supreme Court cleared up two important, nagging issues with wide applicability and importance to property owners across the country. First, the 5-member majority, led by Justice Alito, held that a government cannot avoid Fifth Amendment takings liability by denying a permit unless the applicant agrees to a potentially unconstitutional condition. The Court saw this as a procedural ploy to circumvent the effect of Nollan-Dolan. According to Justice Alito, denial of a permit because an applicant will not accept an unconstitutional condition does not insulate the condition from constitutional review any more than when the condition is imposed over the applicant’s objection and the permit is granted. In California, state law already generally allows applicants to accept a permit and still challenge illegal conditions under Nollan-Dolan, but many states saw the granting of the permit as barring a later challenge. The majority’s second ruling was the one that caused sparks to fly with the dissent. Justice Alito held that monetary exactions are subject to the same scrutiny under the Nollan-Dolan “nexus” and “rough proportionality” tests as land dedication requirements. This has generally been the rule for many years in states like California and Texas.Continue Reading The Supreme Court Gets It Right On Takings – And Wrong – A View from “Inside the Curtilage”: The Property Owner’s Perspective

By Claudia Gutierrez

In MHC Limited Financing v. City of San Rafael, the Court of Appeals for the 9th Circuit considered, among other things, whether the City of San Rafael’s mobilehome rent control ordinance (the “Ordinance”) constituted either a regulatory taking under Penn Central Transportation Co. v. New York City or an impermissible “private” taking in violation of the Fifth Amendment, which prohibits the taking of private property for public use without just compensation. With respect to Penn Central, the court held that economic impact, investment-backed expectations, and the character of the Ordinance all led to the conclusion that the Ordinance did not constitute a taking. The court also rejected plaintiff’s “private taking” theory, novel in this context, in which MHC argued that the Ordinance did not qualify as a “public” use and therefore the taking was prohibited, regardless of compensation.Continue Reading Déjà Vu All Over Again: Ninth Circuit Rejects Yet Another Challenge To Rent Control, Including “Private Takings” Argument

Avenida San Juan Partnership v. City of San Clemente, No. G043479, consol. with G043534 (Cal. Ct. App. 4th Dist., December 14, 2011.)

By Michael Hansen and Keith Garner

The Fourth Appellate District recently held that a local agency’s denial of an application to develop a 2.85 acre parcel in the middle of a developed residential area can constitute a compensable regulatory taking under the Penn Central Transp. Co. v. City of New York (1978) 438 U.S. 104 ("Penn Central") case.
Continue Reading Court of Appeal Rules that Denial of a Landowner’s Application to Develop Property Can Be a Compensable Regulatory Taking

Ashley Joffe v. City of Huntington Park, No. B222880 (Cal Ct. App. 2d Dist., November 11, 2011)

By Michael Hansen

The Second Appellate District recently held that public statements and other actions indicating an intent to condemn must clearly meet the criteria set out in the landmark California Supreme Court decision Klopping v. City of Whittier (1972) 8 Cal.3d 39 (Klopping) in order for inverse condemnation liability to arise. In 1972, the California Supreme Court, in Klopping, held that a valid claim for inverse condemnation could be based on governmental actions preceding an actual, or even a de facto, taking of property. The plaintiffs Ashley Joffe and Plycraft Industries owned a furniture manufacturing business at a location where the defendants City of Huntington Park and a developer expressed intent to acquire and develop a proposed retail project. Plaintiffs alleged that the City’s announced intent to condemn made it impossible to enter into long-term furniture contracts and consequently forced Plycraft out of business at that location. The property was never acquired by the defendants, and the plaintiffs filed a claim for inverse condemnation under Klopping.

Plaintiffs claimed recovery for unreasonable delay because (1) the actions of the defendants, including erecting large signs announcing the project and stating that plaintiffs’ property would be acquired either voluntarily or involuntarily, were sufficient to constitute an "announcement of intent to condemn," under Klopping; or (2) the City acted unreasonably; or (3) the actions of the City constituted equitable or promissory estoppel. The City successfully demurred to these allegations because they were not sufficient to satisfy the requirement of Klopping that there be an "announcement of intent to condemn." Plaintiffs appealed and the Second Appellate District affirmed.Continue Reading Statements of Intent to Condemn Do Not Give Rise to Inverse Condemnation Claim

William Bookout v. State of California ex rel. Department of Transportation, 2d Civil No. B214906 (2nd Dist., June 28, 2010).

By Michael Wilmar and Alex Merritt

In William Bookout v. State of California ex rel. Department of Transportation, the Second District Court of Appeal provided important guidance on whether an inverse condemnation action is subject to a three-year or five-year statute of limitations, and whether annual flooding constitutes a continuous or permanent nuisance.Continue Reading Three-Year Statute Of Limitations Applies To Inverse Condemnation Action

Guggenheim v. City of Goleta (9th Circuit, No. 06-56306, 9/28/2009).

By Dave Lanferman and Deborah Rosenthal

According to a panel of the federal Ninth Circuit Court of Appeal, the City of Goleta owes compensation to mobile home park owners for economic losses resulting from the enactment of a mobile home rent control ordinance. In Guggenheim v. City of Goleta, the panel held that, on its face, the rent control ordinance effectuated a “naked transfer” of approximately 90% of the value of the property from the park owner to the tenants. The court declared that “a facial challenge [to an ordinance] exists as a viable legal claim” under the ad hoc, multi-factor standards first described by the U. S. Supreme Court in 1978, in Penn Central v. City of New York (1978) (438 U.S. 104). Based on the unusual circumstances of this case, the court addressed the merits of the claim and found that this severe loss of value was a compensable regulatory “taking,” even though the park owners continued to earn positive annual returns.Continue Reading Regulatory Takings Law: Ninth Circuit Panel Holds A Mobile Home Rent Control Ordinance Is Subject To A “Facial Challenge” And Awards Compensation To Property Owners

Monks et al. v. City of Rancho Palos Verdes, ___ Cal. App. 4th ___ (Oct. 1, 2008, Case No. B201280)

By David Collins

 

In Monks, the California Court of Appeal found the City of Ranch Palos Verdes (City) had exacted a permanent taking on a group of land owners seeking to build homes on 16 lots in the Palos Verdes coastal peninsula area by establishing insurmountable conditions for development without a valid justification. Since the City could not justify the development conditions under state principles of property or nuisance law, the City was found to have violated the takings clause under California’s Constitution, which states: “Private property may be taken or damaged for public use only when just compensation … has first been paid to…the owner.”  Cal. Const., art. I, § 19.Continue Reading City of Rancho Palos Verdes Liable for Taking During Moratorium

Action Apartment Association v. City of Santa Monica (August 28, 2008, Case No. B201176)  __ Cal.App. 4th __

Plaintiff Action Apartment Association (“Action”) argued that an ordinance passed by Defendant City of Santa Monica (“City”), on its face, violated the takings clause of the Fifth Amendment of the United States Constitution and article I, section 19 of the California Constitution.  Action also argued that the ordinance was an amendment to the city’s housing element and thus required approval by the Department of Housing and Community Development (“DHCD”).  The Court of Appeal affirmed the trial court ruling that the Nollan/Dolan test does not apply to a facial challenge of a land use regulation.  The Court further affirmed that the City’s affordable housing ordinance is not a housing element, does not amend the City’s housing element and thus does not require review by the DHCD.Continue Reading Nollan/Dolan Does Not Apply To A Facial Challenge Of A Land Use Regulation