NJ State Senator Diane Allen has called for a hearing on two NJ eminent domain bills.  In every legislative session since 2004, Senator Allen has introduced two bills aimed at eminent domain reform. One, S-2505, places a temporary moratorium on the use of eminent domain and creates the Eminent Domain Study Commission to examine its use. The other is a constitutional amendment, SCR-98, that would limit the use of eminent domain to the acquisition of land for essential public purposes.  However, neither bill has moved very far.

California’s Supreme Court recently issued an opinion that could have far reaching implications in that state.  In City of Perris v. Richard C. Stamper, the Court ruled that a judge should decide whether the city would have required a property owner to give up the strip that was condemned as a zoning condition for developing his land before the jury decides the amount of just compensation.

In that case, a city condemned a 1.66-acre strip that divided a nine-acre undeveloped parcel into two irregularly shaped triangles.  It was taken for an access road.  The city argued that the property owner would have been required to dedicate land for the road to the city with no compensation if he’d tried to develop his property for light industrial use and that this requirement must be considered in vaulting the property.

The Court held, “Thus, in a condemnation action, when a government entity makes a claim . . . that it would have required a dedication of some or all of the property being condemned had the property been developed, courts determining just compensation should look to whether that dedication requirement was put in place before it was probable that the property would be included in a government project.”  It further explained, “We hold that the project effect rule generally applies . . . to situations where it was probable at the time the dedication requirement was put in place that the property designated for public use was to be included in the project for which the property is being condemned,.  The applicability of the project effect rule thus turns on a preliminary factual question to be decided by the court.”

A unanimous Illinois Supreme Court ruled that temporary flooding can cause a taking under the Illinois Constitution.  In Hampton et al. v. the Metropolitan Water Reclamation District of Greater Chicago, homeowners alleged that Chicago’s water reclamation district violated Illinois’ takings clause by diverting stormwater onto their properties.

The lower state court wanted to know if the U.S. Supreme Court’s 2012 decision in Arkansas Game was at odds with prior Illinois law.  The Illinois Supreme Court held that the prior law was not an absolute bar to temporary flooding takings suits and that courts would need to examine the facts of each case to determine if there was a taking.

The California Supreme Court held that state agencies may enter private properties for environmental and geological testing activities in some cases and that a jury may award damages if property is damaged during that testing.  In Property Reserve Inc. et al. v. The Superior Court of San Joaquin County et al., case number S217738, the California Department of Water Resources invoked precondemnation powers under the state’s Eminent Domain Law relating to entry and testing to conduct environmental and geological studies and testing on more than 150 privately owned properties.

The California Supreme Court held that the testing was permitted.  However, it also held that the property owners must have the opportunity for a jury trial if there are damages caused by the testing.  The Court explained that the statutory procedure relating to precondemnation entry and testing “as presently written” does not afford a property owner the right to have a jury determine the amount of compensation within the precondemnation proceeding itself, and is constitutionally deficient.

“We conclude that the appropriate remedy for this constitutional flaw is to reform the precondemnation entry statutes so as to afford the property owner the option of obtaining a jury trial on damages at the proceeding,” the Court held.

It is very possible the legislature will now amend the statute to conform to the decision.

Last week I tried a case in York County, PA involving a condemnation of the former York County Prison.  My clients purchased the property in the ‘80s and were waiting for the right time to develop the property when it was taken by the City of York RDA.

The RDA claimed it was worth about $65,000.  We presented evidence that the property was worth $1,250,000.

After less than ½ hour, the Jury returned a verdict of $1,250,000 – the full amount we alleged.

It was very gratifying to see that the Jury agreed with our vision for the case and award our client the amount they deserved.

The NC Senate Republicans gave initial approval to putting three constitutional amendments on the November ballot. One of those amendments seeks to restrict eminent domain powers.  An eminent domain amendment has been approved by the NC House five times since the 2005 U.S. Supreme Court Kelo decision.  The proposed amendment provides that private property cannot be taken for eminent domain except for a public use and that just compensation shall be paid and determined by a jury at the request of any party.

North Carolina’s Supreme Court held that a state law carving out potential future highway projects represented an unconstitutional taking of residents’ property without just compensation. In Kirby et al v. North Carolina Department of Transportation, 56PA14-2, a group of Winston-Salem landowners challenged the state’s Roadway Corridor Official Map Act, better known as the Map Act, saying it wrongfully allows the state to invoke eminent domain to condemn their land without proper payment for future corridor highway projects that are part of the North Carolina Department of Transportation’s long-range transportation plan.  The justices affirmed a state appeals court ruling that the state had to pay the property owners, concluding that the Map Act implements an indefinite restraint on fundamental property rights through eminent domain. That 1987 law gave the state agency the power to chart out official roadway maps, creating protected corridors for future highways and indefinitely barring property owners with parcels within those corridors from getting building permits to improve, develop or subdivide their property.

“The Map Act’s indefinite restraint on fundamental property rights is squarely outside the scope of the police power,” the justices said. “No environmental, development or relocation concerns arise absent the highway project and the accompanying condemnation itself. Justifying the exercise of governmental power in this way would allow the state to hinder property rights indefinitely for a project that may never be built.”

The justices remanded the dispute to the lower court with instructions to crunch the numbers on the value of the loss of the landowners’ fundamental rights, specifically by calculating the value of the land before the corridor map was recorded by NCDOT and the value of the land afterward, according to the opinion. Other factors would also have to be taken into account, including the restriction on each plaintiff’s fundamental rights, as well as any effect of the reduced ad valorem taxes, the court said.

A Pennsylvania state appellate court recently held that a taxing authority could not present an appraisal prepared by a non-testifying expert for the taxpayer. In Millcreek County School District v. Erie County Board of Assessment Appeals v. Wegmans Food Markets Inc., 39 C.D. 2015, the Court of Common Pleas of Erie County allowed the Millcreek Township School District to present certified appraiser Barry Polayes’ appraisal submitted by the taxpayer during a 1998 valuation.  The Commonwealth Court of Pennsylvania reversed the decision.  It ruled that Polayes was not an agent of the taxpayer and his earlier opinions should not have been used against the taxpayer in court.  They held that the appraiser was not a representative of the taxpayer and, therefore, the appraisal violated the hearsay rule.

The Appraisal Institute has reported that it will lobby Congress for the modernization of the appraisal regulatory process. The issues the Appraisal Institute want to see addressed include the relationship of Federal and state regulations, the ability of appraisers to work in multiple states, more flexibility in the appraisal process and better processes for sharing information.

The U.S. Supreme Court declined to hear a Florida apartment complex’s class action challenge to a state law allowing the government to keep most of the interest on funds the county court held during eminent domain proceedings. Jupiter, Florida, apartment complex Mallards Cove LLP asked SCOTUS to hear its inverse condemnation suit against the Florida Department of Transportation and the clerk of the Pasco County Circuit Court. Mallards Cove argued that a state statute allowing the government to collect the overwhelming majority of interest on quick-take deposits violates the Fifth Amendment’s ban on the government’s taking of property without providing fair compensation.

The Second District Court of Appeal’s March 2015 held that the deposited funds were not Mallards Cove’s property. The county clerk invested the deposit and later paid the FDOT 90 percent of the interest earned, the petition said.  The case is Mallards Cove LLP v. State of Florida, Department of Transportation et al.