Cal. Court of Appeal: No Public Use In "Case Of Condemn First, Decide What To Do With The Property Later"

A very important decision by California's Third District Court of Appeal, exposing the fantasy behind the Kelo majority's conclusion that decisions to take property are most often the result of an objective process and comprehensive and carefully considered planning. In City of Stockton v. Marina Towers LLC, No. C054495 (Feb. 13, 2008), the court invalidated an attempt to take property on public use grounds, holding that the city's resolution of necessity was so "nondescript [and] amorphous," and "so vague, uncertain and sweeping in scope that it failed to specific the 'public use' for City sought acquisition of the property." Slip op. at 3. 

Recall that in  Kelo v. City of New London, 545 U.S. 469 (2005), the majority took great pains to establish that the taking of Mrs. Kelo's house was part of a "'carefully considered' development plan," and was therefore entitled to judicial deference.  Kelo reviewed the decision to take property by eminent domain in much the same fashion that the courts review police power zoning decisions under due process analysis: courts wash their hands for the most part as long as the zoning is enacted "in accordance with a comprehensive plan."  In Marina Towers, however, the court did not accept the city's litigation claim that the taking was part of a master plan, but instead looked to the city's actual conduct. The property owner possessed two parcels. One was unimproved, and a vacant office building was on the other. More than a decade before the owner purchased the properties, the city adopted the "Central Stockton Final Plan/Revitalization Plan" --

The plan presents itself as a visionary planning document for future development of the city center, with maps, charts and descriptions of possible development of the downtown area. In 1991, the subject property was added to the West End Redevelopment Project Area of downtown Stockton, and an environmental impact report (EIR) was certified for this purpose.

Slip op. at 4. The city studied projects including development of the Stockton Event Center, a complex to include an arena, hotel, baseball stadium, and apartments, and settled on the two parcels as the "catalyst site" for the project. The city notified the owner that it was considering acquisition for the Event Center, but the property owner objected. The owner was willing "to work with City on developing the property" and disagreed that condemnation was necessary,

explaining that [it] was in negotiations with the county to lease the vacant building. [The owner] stated that the only project plans he had seen for the property called for private apartments. He questioned how condemnation could benefit the public when the intent appeared to be to take the property from one private owner and give it to another. Despite [the owner]’s assertion that there was no defined project that necessitated the taking of Marina’s property for public use, no one at the hearing identified a specific public project that was the object of the proposed taking.

Slip op. at 6. The city, however, went ahead, and passed resolutions of necessity. The resolutions state:

(1) the “Proposed Project” consists of acquisition of additional land on the North Shore of the Stockton Deep Water Channel; (2) City already owns approximately 20 acres on the North Shore and "has been preparing this site for development"; (3) the North Shore is a “catalyst site” consistent with redevelopment of a portion of the West End (Central Stockton) Redevelopment Project Area; (4) assembling the North Shore parcels, including this property, into a single parcel will eliminate irregularly shaped and undersized lots, permitting development of a larger and economically feasible use; and (5) the "Proposed Project" will complement other revitalization efforts and City will be a direct beneficiary of such efforts.

Slip op. at 6. Based on the resolutions, the city instituted eminent domain proceedings in superior court and obtained immediate possession of the properties. The city then adopted a new resolution which designated one parcel for use as a parking lot and the other for a ballpark. The project was built before the superior court held a trial on the property owner's objections to the condemnations, so it should not be a big surprise that after the property owner's opening statement, the court dismissed the public use objections and ruled in favor of the city.

The court of appeal reversed. California law requires a resolution of necessity to contain certain elements, one of which is that it set forth a description of the project with clarity. The court held that without details, "[i]t is both a physical and legal impossibility" for legislators to determine whether the public interest requires the project, whether it is planned consistently with the "greatest public good and least private injury," and that the property to be taken is necessary for the project. Slip op. at 18. Environmental review also cannot take place without the details. The court also focused on the due process rights of the property owner:

A governing body of a public entity may not adopt a resolution of necessity until it has given the owner proper notice and an opportunity to be heard on all matters that are the subject of the resolution of necessity...If the governing body does not have before it a definable project for which the property is sought to be taken, any discussion of the pros and cons of the condemnation would be an empty gesture and the necessity findings rendered at the conclusion of the hearing would be devoid of real meaning.

Slip op. at 19-20. The resolutions stated "that 'the Proposed Project consists of the acquisition of additional land in conjunction with potential development on the North Shore of the Stockton Deep [W]ater Channel.'" Id. (emphasis original). The court concluded that this description was "woefully lacking in its identification of the project." Slip op. at 21. The court analyzed the remaining language in the resolutions and determined that the city had not gone beyond vague, generic descriptions of what it intended to do ("'acquisition of additional land' in 'conjunction with potential development'"), and that the resolutions were essentially self-justifying because they equated the project with the condemnations.

In other words, "we are taking this property because we're taking this property."

The court held the critical time for defining the project was when the resolution was passed, so even though the city eventually made use of the property, it "conceded in its briefs that it did not have any specific purpose in mind when this condemnation was initiated." Slip op. at 23.  The court rejected the trial court's finding that the city's construction of the project after the passage of the resolutions of necessity somehow validated the defects in the project description. Slip op. at 28. Interestingly, the city disclaimed that it was taking the property as a redevelopment project, which, under California law, would likely have provided it a safe harbor by rendering even the vague statements of necessity nearly bulletproof.

Finally, what of the fact that even though the taking was struck down, the property had already been taken and the project built? The court considered the taking fait accompli, and did not unwind it. It did, however, order the payment of the property owner's attorneys fees and costs.