A quick one from the Nevada Supreme Court (pictured above).
In Clark County v. HQ Metro, LLC, No. 71877 (Aug. 2, 2018), the unanimous court concluded that the owner of property at the time the condemnor obtained an order of possession (in Nevada, the term apparently is "order of occupation") is the party entitled to compensation, and not the party owning the property when the condemnor actually entered the property.
Quick facts: to build a power line, Nevada Power Company condemned property owned by HQ Metro, and leased to Clark County. Nevada power got an order of occupation entitling it to enter the land to construct the line. But before it actually entered, HQ sold the land to Clark County.
The question: who gets compensation? The parties agreed that when the taking occurred was the dispositive legal question. Did it occur when the court granted the order allowing physical invasion, or when the condemnor actually invaded? The former, the court concluded.
In this case, the order granting immediate occupancy constituted a substantial governmental interference with HQ Metro's property rights. "The bundle of property rights includes all rights inherent in ownership, including the inalienable right to possess, use, and enjoy the property." ASAP Storage, 123 Nev. at 647, 173 P.3d at 740 (internal quotations omitted). The order authorized NV Energy to permanently occupy the easement area for the purpose of constructing and maintaining the transmission lines and associated facilities on the property, and restrained and enjoined HQ Metro from interfering with NV Energy's occupation and performance of the work required for the easement. The order restricted HQ Metro's full use and enjoyment of the property, and the entitlement to compensation is a substitute for that lost interest. When HQ Metro sold the property, it conveyed title subject to the occupancy order. Thus, we conclude that the order granting immediate occupancy constituted a taking of property rights and the right to compensation vested at that time. Because HQ Metro was the owner of the property, it was entitled to compensation for the permanent easement.
Slip op. at 8 (footnote omitted).
The court rejected the County's argument that the "taking" occurred when the condemnor could no longer abandon the project, which happened after the order of occupation. Not so, held the court, the order granting occupancy was an interference with the owner's property rights. Id. at 9. This makes sense to us, because it emphasizes that the injury in a condemnation is not to the property, but to the property's owner. Here, HQ was prohibited from stopping the condemnor from physically invading, and that was when its rights were injured, not when the condemnor actually got around to entering.
Finally, one small but important point. The court rejected the County's argument that it was unfair for HQ to keep the proceeds of the condemnation because there was no evidence the purchase price which the County paid to HQ was discounted to reflect the taking. The court shrugged its shoulders, and refused to speculate about whether the purchase price included (or didn't) any of this. It was enough that the County knew of the condemnation. Contrast this approach to the Ninth Circuit's speculation in rent control and other cases that the cost of regulations are baked into the purchase price of property.
One more thing: here's the backstory on the above picture. Last time we were in Carson City, we stopped by the courthouse to take some snaps, in anticipation of someday being able to use them in a post such as this. While there, two officers from Nevada Five-0 wandered over, and asked what we were doing, taking pictures of the courthouse? (If you look closely enough at the above pic, you will see one of said officers at the bottom of the left side stairway near the front door.) They suspected we might have been "casing" the joint for some bad future act. After all, who takes pictures of the Nevada Supreme Court? No one else was, and the plaza was otherwise deserted. No, we explained, we're law nerds and we do stuff like this. Go read the blog, officer! After a while and following some skeptical questioning, they were convinced we were on the up and up, and let us go on our way. Can't be too careful these days.