In City of Perris v. Stemper, No. S2133468 (Aug. 15, 2016), the California Supreme Court held that the judge, and not the jury, determines the validity of a dedication which a condemnor asserts it would impose to get the condemned property "for free" if the owner ever asked it to develop the property to its highest and best use. The case involves whether the city can avoid paying just compensation by showing that it would, in the future, exact from the owners the very same property which the city is condemning. The only way the city wouldn't require dedication of this property is if the owner continued to use it for agricultural purposes. The second issue which the court considered was the "project influence" rule, and whether the city's dedication requirement must be ignored in determining just compensation.
We'll have more on the opinion later once we've had a chance to do more than skim it, but for now, here's the bottom line(s):
We hold, contrary to the Court of Appeal below, that the constitutionality of a dedication requirement under Nollan and Dolan is a question for a court, not a jury. We further hold that the project effect rule generally applies, and the Porterville doctrine does not apply, when it is probable at the time a dedication requirement is put in place that the property subject to the dedication will be included in the project for which the condemnation is sought. We remand this case to the Court of Appeal with instructions to remand to the trial court for proceedings not inconsistent with this opinion.
Slip op, at 31.
Nollan-Dolan analysis is not "factually intensive" according to the court, and the California's Constitution's takings clause only requires a jury to resolve "factually intensive questions directly related to compensation to be submitted to a jury." Slip op. at 2-3. "Because the Nollan and Dolan issues are mixed questions of law and fact in which the legal issues predominate, and because the constitutionality of a dedication requirement is analytically prior to any factual dispute as to whether the condemner would actually impose the requirement, the questions belong to the court." Id. at 3.
The court's ruling on project influence looks like a win for property owners: "Thus, the Porterville doctrine applies when the evidence establishes that a dedication requirement reflects an agency original expectation that an improvement would occur as a result of development of adjacent properties in order to mitigate the impact of such development. When it later becomes clear that the properties at issue have to be condemned to undertake the mitigating improvement, the property is valued in its undeveloped state." Slip op. at 26. Here's how to apply that rule in future cases:
Thus, in a condemnation action, when a government entity makes a claim under Porterville 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. Probable inclusion in a government project means that at the time the dedication requirement was put in place, (1) the government was engaging in a ―project‖ — that is, a public work the government intended to pursue — for which it intended to acquire property by purchase or condemnation, if necessary, as opposed to a contingent plan to mitigate possible development on adjacent property through dedications; and (2) it was probable the property at issue would be included in that project. Under such circumstances, the project effect rule applies and the Porterville doctrine does not.
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