September 2018 Update
This update addresses the most significant cases and statutory changes since the previous update was published. Among the most significant recent developments are the following:
The California Supreme Court approved comprehensive revisions, including renumbering, of the California Rules of Professional Conduct, which will take effect November 1, 2018. The cites to those Rules have been updated to refer to both the existing and the new numbering. See §§1.2, 1.16D, 1.18, 1.24–1.27, 9.64,
In Glaviano v Sacramento City Unified Sch. Dist. (2018) 22 CA5th 744, a noncondemnation case interpreting Educ C §44944 (providing recovery for “reasonable attorney’s fees incurred”), the court ruled that in the absence of the modifier “actually” the trial court is not limited to fees actually charged; instead, it should use the lodestar method to calculate the fee award (reasonable hours spent multiplied by reasonable hourly rate). See §1.18.
In Scher v Burke (2017) 3 C5th 136, the California Supreme Court refused to limit CC §1009(b)’s restriction on implied dedication to coastal lands when a private party sought use of a roadway for nonrecreational vehicle access through a neighbor’s inland property. Moreover, the court ruled that the statute bars all public use, not just recreational use, from ripening into implied public dedication. See §§2.10, 4.84.
In Dryden Oaks, LLC v San Diego Reg’l Airport Auth. (2017) 16 CA5th 383, a lawsuit against a county regional airport authority regarding adoption of an airport land use plan restricting use of certain land, but not naming the city that held the final decision authority over any development of the land, was properly dismissed on a summary judgment motion. The court found that the airport authority simply adopted compatibility plans for lands adjacent to the airport, and the city retained the power to allow development of affected properties. See §§4.8, 13.3D, 15.17, 16.11, 17.8.
Effective May 2017, CACI 3511B provides a jury instruction on temporary severance damages. The instruction calls for a specification of reasons alleged for the damage due to the condemnor’s construction activities, and it provides as an example “reduced business because construction made access to owner’s business more difficult.” See §5.26.
In Medical Acquisition Co. v Superior Court (2018) 19 CA5th 313, the court ruled that an undertaking may be required when a deposit, pending appeal, is increased postjudgment based on the verdict, because the condemnor has an interest in the deposit. See §§8.41, 10.23.
In Weiss v People ex rel Dep’t of Transp. (review granted June 13, 2018, S248141; superseded opinion at 20 CA5th 1156) the court ruled that a CCP §1260.040 motion does not authorize a pretrial determination of liability; such a determination is beyond the scope of the statute, which is limited to resolving issues arising out of exchange of valuation data. See §§9.49, §17.8.
Chapter 12 (Income Tax Consequences of Condemnation Awards) has been updated to reflect the Tax Cuts and Jobs Act (Pub L 115–97), enacted in 2017, and it includes other updating revisions.
In Sierra Palms Homeowners Ass’n v Metro Gold Line Foothill Extension Constr. Auth. (2018) 19 CA5th 1127, the court ruled that CC §5980 provides homeowner associations the standing to sue for property damage to common areas or to a qualifying separate interest that the association is required to maintain; the association has standing in a representative capacity to the owners. See §§13.3A, .
The inverse condemnation case of Mercury Cas. Co. v City of Pasadena (2017) 14 CA5th 917 involved a large tree, planted in a city-owned parkway along a street and adjacent to a private residence, that fell across the house in a severe wind storm. The city was not liable, because there was no evidence showing the tree was planted as part of a public improvement “deliberately designed and constructed” to serve a public purpose. There was no evidence as to who planted the tree, or why, although it was on public property and the city provided periodic inspection and maintenance. See §§13.3B, 14.13A.
In Citizens for Odor Nuisance Abatement v City of San Diego (2017) 8 CA5th 350, the city was not liable on a claim of public nuisance for noxious odors from sea lion waste, because the evidence presented showed the construction of a fence surrounding a cove had not caused the sea lions to congregate in the area and the city did not neglect to take action, although the method selected had not remedied the problem. See §§13.3C–13.3D, 13.7C.
In another nuisance and inverse action, Williams v Moulton Niguel Water Dist. (2018) 22 CA5th 1198, the court ruled that the introduction of a disinfectant chemical into the water supply, alleged to create pinholes in copper pipes of residential customers, was an action immune from liability under CC §3482 because it was authorized by statute. See §§13.3C, 13.7C–13.7D.
In Surfrider Found. v Martins Beach 1, LLC (2017) 14 CA5th 238, the court observed that an injunction, issued to maintain public access pending a final decision by the California Coastal Commission, intrudes on the owner’s rights to exclude others, but held the injunction was not a per se taking, because of its temporary nature. See §§13.3C, 15.20–15.21. NOTE: The California Supreme Court denied review in Surfrider (S244410, Oct. 25, 2017), but a petition for certiorari was filed with the U.S. Supreme Court on Feb. 22, 2018.
Proposed legislation (AB 33 (Quirk, 2018)) would provide for recovery bonds to finance costs, in excess of insurance proceeds, incurred (or expected to be incurred) by Pacific Gas & Electric Company (PG&E), excluding fines and penalties, arising from the wildfires that occurred in northern California in 2017. The recovery bonds would compensate northern California wildfire victims of 2017 and allocate costs for strict liability inverse condemnation and other wildfire-related claims and costs, so as to maintain the financial health of PG&E. For more details, see §14.13A.
In a takings challenge to a state land use commission’s reversion order effectively downzoning the plaintiff’s 1060-acre property from urban use to agricultural use, the Hawaii District Court upheld the jury’s finding of a temporary regulatory taking under both Penn Central and Lucas analyses, and denied the state’s request for a new trial. See Bridge Aina Le'a, LLC v Hawaii Land Use Comm’n (D HI, June 27, 2018, No. CV 11-00414 SOM-KJM) 2018 US Dist Lexis 107583, 2018 WL 3149489, discussed in §15.14.
In the most recent ruling in the ongoing Colony Cove Properties litigation, the Ninth Circuit denied relief after applying the Penn Central factors of economic impact (no evidence was presented on postdeprivation value), distinct investment-backed expectations (the facts did not support an expectation of consideration of debt service), and the character of the government action (this was not a physical invasion but a public program to adjust benefits and burdens of economic life to promote the common good). See Colony Cove Props., LLC v City of Carson (2018) 888 F3d 445, discussed in §15.19.
In Coyne v City & County of San Francisco (2017) 9 CA5th 1215 , the court ruled that San Francisco’s ordinance imposing a prohibitive price for relocation assistance on landlords exiting the residential rental market was preempted by the Ellis Act. See §15.19.
In Sierra Medical Servs. Alliance v Kent (9th Cir 2018) 883 F3d 1216, 1225, the Ninth Circuit noted that a state health care mandate to ambulance companies to provide services regardless of the patient’s ability to pay, when the reimbursement was 20 percent of the cost, combined with the companies’ property interest in their equipment, presented a “constitutionally protected property right upon which California law intrudes.” However, the court denied relief because the plaintiffs failed to produce sufficient evidence in support of their constitutional claims. See §15.29.
In case you missed last year’s update, here are the most significant developments addressed in the 2017 update:
In the long-awaited decision in City of Perris v Stamper (2016) 1 C5th 576, the California Supreme Court applied the project effect rule to determine the applicability of a dedication requirement to the valuation of property condemned. The supreme court also held in Stamper that the constitutionality of a dedication requirement under Nollan and Dolan is for the court to decide. See discussion in §§4.5, 4.12, 4.83, 5.16.
For a case on the valuation of underground natural gas storage, and distinguishing the decision in PG&E v Zuckerman (1987) 189 CA3d 1113 on that topic, see Central Valley Gas Storage LLC v Southam (2017) 11 CA5th 686, discussed in §4.87.
A new section has been added with detailed discussion of how to define the “public project” for purposes of determining severance damages. See §5.3A.
In City of San Jose v Superior Court (2017) 2 C5th 608, the California Supreme Court addressed the extent of the reach of a public records request to include disclosure of e-mails in the personal accounts of public employees and officials conducting public business. See §9.29B.
For new discussion and practice tips on how to conduct cross-examination to draw out details of the project from the project construction plans that affect the property, especially in the case of design build projects, see §9.60.
For new discussion of the use of Google Earth® aerial (overhead and oblique) images, drone videos, PowerPoint® presentations, and similar tools in condemnation litigation, see §§9.94–9.95.
In its much-anticipated decision in Murr v Wisconsin (2017) ___ US ___, 137 S Ct 1933, the U.S. Supreme Court ruled that a local regulation that effectively merged an undeveloped lot with an adjacent developed lot in the same ownership was not a taking, after analyzing three factors: (1) how title is treated under state and local law, (2) the physical characteristics of the undeveloped parcel, and (3) the economic impact on the combined lots. See §§15.5, 15.10, 15.20.
Landlord-tenant lawyers may recall that in Levin v City & County of San Francisco (ND Cal 2014) 71 F Supp 3d 1072, a federal district court held unconstitutional an ordinance requiring landlords who sought to withdraw their rent-controlled property from the rental market to pay an extraordinary lump-sum payout to regain possession. (The formula for the payout was the monthly rental rate at the time of the notice of withdrawal, multiplied by 24.) After the city amended its ordinance in light of that decision, the Ninth Circuit dismissed the city’s appeal as moot, in Levin v City & County of San Francisco (9th Cir 2017) 680 Fed Appx 610. See §15.19.
In Lynch v California Coastal Comm’n (2017) 3 C5th 470, the supreme court reinforced the rule that acceptance of the benefits of a permit bars the owner from challenging the conditions of that permit. In Lynch, the property owners accepted a Coastal Commission permit to restore a seawall that protected their residential properties, but in order to proceed, they had to accept conditions that the permit will expire in 20 years and that the owners had to record a deed restriction stating that the condition restricted the properties. See §16.10A.