Here's one about Lucas "background principles" of property law, or maybe the Supreme Court's current focus on "history and tradition" when it comes to defining private property for purposes of the Takings Clause.
In So. Cal. Edison Co. v. Orange County Transp. Auth., No. 22-55498 (Mar. 13, 2024), the U.S. Court of Appeals for the Ninth Circuit affirmed a grant of summary judgment denying a takings claim by a public utility which sought compensation after the County ordered it to move its equipment off of a public right-of-way for a streetcar line at its own expense.
The utility raised a physical takings claim, but the court didn't get to that issue, instead focusing on whether it owned property. The court noted that state law "generally" defines property but, citing Tyler, held that there are certain "traditional property law principles" and "historical practices" about property that no state may alter without compensation.
With that understanding in mind, we consider whether the Utilities have a property interest in maintaining their facilities at their specific locations in the face of OCTA’s efforts to construct a streetcar line. We first examine that question under California property law and then consider traditional property-law principles, historical practice, and precedent.
Slip op. at 9.
The court concluded that the utility never owned the "stick" of compensation for relocation. The court held that "California law does not give the Utilities the property interest that they assert." Id. The court noted a 1958 California Supreme Court decision which held that when a utility "accepts franchise right in public streets," it is subject to an implied obligation to relocate at its own expense when the government wants to use the right of way.
Skip to page 14 of the slip opinion for what we think is the more interesting part: does the California rule that the property rights of utilities in public-rights-of-way do not include recovering relocation costs if the government requires them to move consistent with historical and traditional property rights? The Ninth Circuit relied primarily on a U.S. Supreme Court opinion, Norfolk Redev. & Hous. Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30 (1983), for the notion that "utilities have been required to bear the entire cost of relocating from a public right-of-way whenever requested to do so by state or local authorities."
The Ninth Circuit also noted that this was not a new rule but goes as far back as 1905, and that "for more than a hundred years, utilities have been required to relocate to make way for a government that seeks to vindicate its right to use the streets and enact 'proper regulations in the interest of the public health, morals, and safety.'" Slip op. at 15.
The court also rejected the utility's reliance on City of Los Angeles v. Los Angeles Gas & Electric Corp., 251 U.S. 32 (1919), which held that it was a taking for the city to remove or relocate telephone poles "when necessary." That argument crashed on the shoals of the rational basis test:
we do not read Los Angeles Gas & Electric to invite us to make our own assessment of whether a streetcar line is or is not necessary for Orange County—the California Legislature, after all, believes that the project serves valuable public purposes, and the Utilities offer no reason for us to second-guess that judgment.
Slip op. at 17. In the LA Gas case, the project "apparently lacked any public-facing rationale, and it therefore lost its status of 'governmental.'" Id. The streetcar project here suffered from no such omission as the County had said aloud the magic words that its project was for a public purpose. Thus, "[i]t is a governmental project that fits comfortably within a long tradition of relocations for which franchisees must foot the bill." Id.
Finally, the Ninth Circuit rejected the utility's argument that a California statute assigns the costs for these type of relocations on the government. Check out pages 18-21 for the reasons why.
So. Cal. Edison Co. v. Orange County Transp. Auth., No. 22-55498 (9th Cir. Mar. 13, 2024)
