California Eminent Domain Report

Two of the more complicated issues eminent domain attorneys face are analyzing whether government conduct rises to the level of a taking, and whether the government engaged in precondemnation conduct that gives rise to damages apart from paying just compensation.

Earlier this week, an unpublished California Court of Appeal decision, Dryden Oaks v. San Diego County Regional Airport Authority, grappled with both issues. (See update below.)

In Dryden Oaks, a developer purchased property near the Palomar Airport in Carlsbad.  The property was in an area governed by the San Diego County Airport Authority, which establishes policies for land uses of properties near airports in San Diego County.  Without getting too far into the weeds of the complicated fact pattern, the City approved development of one of the developer's two parcels, over the Authority's objections, but later rejected development permits on the other property, following the Authority's objections to the developer's application.

The developer sued both the County and the Authority.  Crucially, as it would turn out, the developer did not sue the City itself.

The developer claimed the Authority's policies (which the City accepted in rejecting the application at issue) constituted a taking of the developer's property.  The developer also claimed that the Authority engaged in unreasonable precondemnation conduct, providing a second theory of liability.

The Court engaged in a fairly elaborate discussion of takings jurisprudence generally, and regulatory takings in particular.  It's too much to go through in a blog post, but if you want a good overview of that area of law, the opinion itself is worth a read.  Ultimately, though, the Court held that the Authority's policies simply could not give rise to a takings claim, because the Authority did not have the power to make land use determinations.  Rather, it was the City that had the power to approve or reject the developer's applications, and it was the City that in fact rejected the developer's plans.  The Court explained:

Because the Authority did not have the ability to make the final land use determination at issue in this case, . . . the Authority met its burden on summary judgment to show [plaintiff] could not establish this element of its takings claim . . . .

Because the Court concluded the Authority could not be held liable in inverse condemnation, it also rejected the developer's claim that the County was liable because the Authority was acting as its agent.

The Court went on to discuss the developer's precondemnation damages claim.  Again, the Court engaged in a detailed discussion of such claims, but ultimately found the issue fairly easy to resolve.  Because neither the Authority nor the County had made any public announcement of an intent to condemn the developer's property, neither was liable for precondemnation damages.

In the end, the opinion may be most helpful as a primer on both takings and precondemnation damages claims.  Aside from that, the opinion likely will have little impact.  Legally, it cannot be cited in court because it is unpublished.  And factually, it presents an odd fact pattern, where the plaintiff chose not to sue the government agency actually responsible for denying the owner's development applications.  (Note that the Court expressed no opinion on whether the City could have been liable for inverse condemnation or precondemnation damages under the facts presented.)

UPDATE:  I wanted to add a quick update to this post.  On October 19, 2017, the Court of Appeal ordered the Dryden Oaks opinion published.  It is now citable as legal precedent in other court cases.  I'm still not sure it adds much to the already existing body of law on regulatory takings or precondemnation damages, but if nothing else, it becomes the most current decision on those issues.