Tomorrow morning, Thursday, May 26, 2016, starting at 9:00 a.m., the California Supreme Court will be hearing oral arguments in an eminent domain case that sits at the intersection of jury determinations of just compensation, and the Nollan/Dolan unconstitutional conditions issue.
The court is now live-streaming video of oral arguments, so you can follow along in real time. We'll post the link when it goes live at the court's web site.
Programming note: the argument is second on the 9:00 calendar, which means that the case will most likely be called some time after 10:00 a.m., after the first case is done.
In City of Perris v. Stamper, No. E054495 (Cal. App. Aug. 9, 2013), the Court of Appeal held that in a condemnation action, "issues surrounding the dedication requirement are essential to the determination of 'just compensation' and therefore must be "ascertained by a jury.'" Slip op. at 1.
The city condemned a portion of Stamper's industrially-zoned vacant land in order to realign and widen an adjacent road. Its deposit was based on the use of the land for agricultural purposes. But wait you say, the land was zoned industrial and even though it was vacant, when calculating compensation, land is valued at its highest and best use. The City asserted that it could appraise the land at a use even lower than its present zoning because it would not approve any development plan for the property unless the owners first "donated" the property to the City. So either we'd get it for free as a condition of development, or we could require the property owner to leave it vacant. As we noted in our post of the court of appeal decision:
Just so we get this right: we're taking part your property, but since we would not not allow you to build on the rest of your property unless you donated to us the property we want to take from you, we get the property we want to take from you essentially for free.
That theory has found some traction in California's intermediate appellate courts. See slip op. at 8-14. And ultimately, the court accepted the viability of the theory with the question being whether a judge or a jury should make the determination whether there was a reasonable probability that the City would condition Stamper's use on the dedication, and if so, whether the dedication passed the Nollan/Dolan nexus and rough proportionality requirements. The court of appeal came down on the side of the jury, which prompted the City to ask the California Supreme Court to agree to review the case. It did, and the Opening Brief presents the following Questions Presented:
1. Is the constitutionality of an otherwise reasonably probable dedication requirement that a governmental entity claims it would have required in order to grant the property owner permission to put his or her property to a higher use a question that must be resolved by a jury pursuant to Article I, Section 19 of the California Constitution?2. Was the dedication requirement claimed by Petitioner City of Perris a "project effect" that the eminent domain law requires to be ignored in determining just compensation?
Op. Br. at 1.
To us, the question in the case is not whether the City could impose the exaction as a matter of constitutional law, but whether it is reasonably probable that it could. And when you hear words like "reasonable" and "probability" as factors in market value, those type of questions are reserved for the jury. The right to have a jury determine compensation is expressly a constitutional right under California law, and any doubt about who makes the call should be resolved in favor of the jury and not the judge.
Here are the briefs in the case:
See you tomorrow.