California Eminent Domain Report

Earlier this month, we gave a presentation during the International Right of Way Association’s 68th Annual Education Conference in Cleveland, Ohio. In keeping with the “rock and roll” theme, our session, “Ch-Ch-Changes in the Law: Eminent Domain and Infrastructure Update,” provided an overview of recent case law and legislation impacting the eminent domain and the right of way industries across the U.S. Additionally, we provided an update on the Infrastructure Bill, where funding and projects are kicking off, and discussed potential barriers to fully taking advantage of the federal funds.

During the presentation, we noted that while monitoring changes in the law over the past year, three notable trends have emerged:

• There has been an increased level of attention on the eminent domain and right of way industries as a whole. For example, the U.S. Supreme Court dealt with two takings cases. It is a rare occurrence to get one Supreme Court case pertaining to this topic every few years; yet, this past year there were two Supreme Court cases. In general, there has also been an uptick in awareness of eminent domain, likely caused in part by the public awareness surrounding the Infrastructure Bill.
• The case law and legislation appears, in broad terms, to be more favorable to property owners. For example, the Cedar Point Supreme Court case is a win for property owners. And, some of the legislation across the states are more favorable to property owners, such as a Texas law that alters various aspects of the precondemnation process. Also, three states (North Carolina, Massachusetts, and New Jersey) are contemplating state constitutional amendments that would limit the use of eminent domain in certain circumstances. These changes signal that eminent domain might be entering or facing a period more favorable to property owners, over the condemning entities.
• A decent amount of legislation appears to be impacting the role of appraisers (either through increasing requirements about revising appraisals in the precondemnation process or the final offer before trial) or impacting valuations (such as modifying definitions of “lost profits” or impacting how conservation easements are valued). Given the ability of legislation to sometimes move quickly and without much fanfare, appraisers should be cognizant of statutory changes that could impact how they conduct their valuation opinions. Otherwise, the credibility and admissibility of such opinions could be in question.

Our session had a great turn out and there was a lot of interest in how cases and legislation are likely to continue impacting the industry moving forward. For those of you who are interested in additional details, IRWA’s real estate committee publishes bi-annually a summary of recent case law and legislation from across the U.S. It is available for download from IRWA’s website. The rest of the conference included educational and engaging presentations on a variety of topics – from relocation to inverse condemnation issues.

For anyone who is located in California, make sure to mark your calendars for the 2024 international conference which will be June 23-26, 2024 in Long Beach, California. The 2024 conference will be hosted by IRWA Chapter 1, including Educational Conference Co-Chairs David Graeler and Artin Shaverdian from Nossaman’s Eminent Domain Practice Group!