Nevada: No Regulatory Taking When DOT Announced Future Plans To Condemn

In State ex rel. Dep't of Transportation v. Eighth Judicial Circuit, No. 15-19376 (June 25, 2015), the Nevada Supreme Court covered territory addressed by other courts recently (see here by North Carolina, Florida, and here by California) -- whether there's a taking when an agency with the power of eminent domain takes steps to condemn property, but hasn't actually done so yet.

Here, the Nevada court concluded that there wasn't a taking, because even though the DOT announced "Project Neon," a "six-phase, 20- to 25- year highway improvement for the Interstate Highway 15 (I-15) corridor between Sahara Avenue and the U.S. Route 95/I-15 interchange in Las Vegas" which included plaintiff's property, it did not result in a "de facto moratorium" on development as the property owner characterized it.

Rather, the court viewed the DOT's actions as preliminary because the plaintiff's property "is not anticipated to be needed for Project Neon until 2028, if at all." Slip op. at 15. The plaintiff had not introduced evidence that the DOT's actions resulted in a physical taking or an economic wipeout. Indeed, the court viewed the plaintiff's failure to submit evidence at the summary judgment phase of specific economic harm caused by the DOT's actions to be a sign that the harm it suffered was "negligible," and thus it also rejected the plaintiff's Penn Central argument. According to the court, the DOT's actions were not egregious enough, and the designation of plaintiff's property for future acquisition was only one of those regulations that adjusts the benefits and burdens of economic life.

Finally, the court distinguished between "precondemnation damages" and "just compensation for precondemnation activities," holding that the former may be recoverable if the government engages in precondemnation activities that are unreasonable or oppressive, but only if there's already a determination that there's been a taking. This passage in the court's opinion is very muddled in our read (see pages 17-19), so we're not entirely following the court's reasoning, but think that the Nevada court is essentially agreeing with the logic of this recent Florida decision, holding that when cases present these facts, any economic impact on property is not going to factor into the takings liability question unless it is very severe. 

State of Nevada ex rel. Dep't of Transportation v. Eighth Judicial Circuit, No. 15-19376 (Nev. June 25...

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