Condemnation Actions: How Valuable Is Your Evidence of Property Value?

By: Erica Stutman

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When a government condemns (takes) private property for a public use, the property owner is entitled to receive “just compensation” equal to the property’s market value. Value is typically determined by appraisals, but if the parties cannot agree, a judge or jury will determine the amount in a condemnation lawsuit. The parties may seek to present various forms of evidence of value, though it will be admissible only if the evidence is relevant and its value is not substantially outweighed by the risk of causing unfair prejudice, confusion, undue delay or waste of time, does not mislead the jury, and is not needlessly cumulative.… Read More »

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Eminent Domain: Be Careful What You Ask For

By:  Richard Herold and Patrick Paul

The condemnation[1] of property for public works may not always be as clean and easy as the government would like.  Although local governments are often critical players in the cleanup and redevelopment of contaminated properties, contaminated property can: (1) trigger disclosure requirements; (2) lead to environmental liability, for example, under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) (42 U.S.C. §9601, et seq.) or an analogous state statute;[2] and/or (3) impact the ultimate valuation of the property.

Local governments can be liable under CERCLA as any one of the following:

  • A current owner or operator of the contaminated property
  • An owner or operator of the property at the time of contamination
  • A party who arranged for the disposal of contamination
  • One who transported the hazardous substances to the property

Condemning authorities can, however, avail of Superfund’s bona fide prospective purchaser defense by engaging in all appropriate inquiry in advance of condemnation and/or taking reasonable post condemnation steps with respect to any known or discovered contamination.… Read More »

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Lenders Should Contract for the Right to Recover Lost Goodwill Proceeds when Commercial Property is taken in Eminent Domain

By: Anthony J. Carucci

Business Goodwill Generally

In California, the “goodwill” of a business “consists of the benefits that accrue to a business as a result of its location, reputation for dependability, skill or quality, and any other circumstances resulting in probable retention of old or acquisition of new patronage.” Cal. Code Civ. Proc. § 1263.510(b). Put another way: “Goodwill is the amount by which a business’s overall value exceeds the value of its constituent assets, often due to a recognizable brand name, a sterling reputation, or an ideal location. Regardless of the cause, however, goodwill almost always translates into a business’s profitability.” People ex rel.Read More »

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School district’s condemnation of a private road passes the test

By: Erica Stutman

The power of eminent domain allows a government or quasi-governmental entity to condemn (take) private property for a public use upon a showing of necessity.  In exchange, the property owner must receive “just compensation” equal to the property’s fair market value, and may be entitled to additional damages, such as severance damages, relocation expenses, costs, or interest.  The eminent domain powers of school districts and other political subdivisions is set forth in A.R.S. § 12-1111.

In Catalina Foothills Unified School District No. 16 v. La Paloma Property Owners Association, the Arizona Court of Appeals confirmed that a school district may condemn a private road for vehicles to enter a school campus. … Read More »

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Easements Made Easier: Building Pipelines with the Power of Eminent Domain Under the Natural Gas Act

By: Richard H. Herold

Any person or entity seeking to construct a natural gas pipeline and successful in obtaining a certificate of convenience and necessity from the Federal Energy Regulatory Commission may exercise the power of eminent domain to obtain easements across private property when those easements are necessary and cannot be obtained consensually (by contract) from the landowners.  Columbia Gas Transmission, L.L.C. v. 76 Acres More or Less, 2014 WL 2960836 (D. Md. June 27, 2014).  the Columbia Gas Court recently held that (1) the property’s legal description need not be attached to sufficiently identify the property to be condemned, and (2) even in the absence of a federal condemnation statute authorizing immediate possession of the property, the condemning plaintiff may obtain an order to take immediate possession of the property since it would be wasteful and inefficient to skip over one or more parcels in the construction process – only if the condemning plaintiff is capable of satisfying the requirements for preliminary injunctive relief under Fed.R.Civ.P.… Read More »

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Brandt Revocable Trust v. U.S. – the United States’ theory of land ownership derailed

By: Erica Stutman

In Brandt Revocable Trust v. U.S., the United States Supreme Court held that abandoned railway rights-of-way that had been granted to railroad companies under the General Railroad Right-of-Way Act of 1875 left underlying landowners with property free of the rights-of-way, and the United States government has no interest in the abandoned land.

Pursuant to the Act, the government granted railroad companies the right to build railroads through public lands.  In large part, the government later conveyed the public land underlying the rights-of-way to private landowners by a land patent, which stated that the land was conveyed subject to a right-of-way for railroad purposes.… Read More »

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The U.S. Supreme Court’s Latest Attempt to Differentiate a Fair Quid Pro Quo in the Developer’s Permitting Process From an Unconstitutional Taking

By:  Rick Herold

Introduction

The U.S. Supreme Court has issued an important decision in an attempt to add clarity and help government land use planners understand the difference between reasonable requests and unreasonable demands rising to the level of unconstitutional takings in the permitting process.  Koontz v. St. Johns River Water Management District, 2013 WL 3184628 (June 25, 2013).

When does a fair quid pro quo, a legitimate exercise of police power in the permitting process, go too far and lapse into an unconstitutional taking without just compensation through the government’s unconstitutional conditions in the permitting process?  In Koontz, the Supreme Court ruled that the seminal cases of Nollan v.Read More »

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