California's Eminent Domain Laws and Property Rights

Edward Burg concentrates his practice on representing California property owners in inverse condemnation, eminent domain and real property litigation while also maintaining a general trial and appellate practice. Ed often speaks and writes on eminent domain and real estate industry issues affecting California landowners and is frequently invited to speak to national audiences on condemnation and takings law.

Significant Eminent Domain and Property Rights Representations and Reported Cases

• Yamagiwa v. City of Half Moon Bay. Won judgment for $36.8 million in favor of plaintiff landowner in inverse condemnation action against City. A City-built storm drain project altered the topography of client’s 24.7-acre parcel, causing stormwater to collect in depressions on the property. The City approved subdivision of the property for 83 homes, but development could not proceed due to seven-year City-imposed moratorium based on sewer treatment capacity shortage. After the sewer plant was expanded, City reversed its earlier decision and determined that wetlands had developed on the property, precluding its residential development. Following bench trial, Court ruled that the City’s storm drain project was a substantial cause of the development of the wetlands, and awarded the full amount of damages sought. (Yamagiwa v. City of Half Moon Bay, 523 F. Supp. 2d 1036 [N.D. Cal. 2007].)
• United States v. 1003.58 Acres. Won jury verdict for $30,283,750 in eminent domain case for the owners of undeveloped land in the Mojave Desert. The United States took the property owners’ land to expand the Marine Corps Air Ground Combat Center in Twentynine Palms, CA. The property included a permitted but nonoperating iron ore mine. Iron ore is used as an additive in the manufacturing of cement, and the property owners’ permitted mine had enough iron ore to provide the California cement industry its needed iron for 45 years. The United States initially deposited $5,347,000 to take the property by eminent domain. At trial, the United States claimed the property was worth $5.6 million, and the property owners claimed the property was worth $38.6 million. After a seven-day jury trial, the jury returned a verdict for the property owners in the amount of $30,283,750.
• City of Claremont v. Golden State Water Co. Defeated attempted condemnation of investor-owned utility by City of Claremont. The City attempted to municipalize water service to customers in the City by a multiyear effort to take the water system owned and operated by our client, Golden State Water Company. Golden State contested the condemnation on the grounds that it was not in the public interest. This was the first case in California to be tried under a statute that allows owners of utilities to contest attempts by government entities to take over ownership and operation of such facilities. Following a six-week trial, the court ruled in favor of Golden State, ruling that the City’s planned takeover was not in the public interest. The court dismissed the City’s eminent domain complaint and ultimately awarded litigation expenses to Golden State of $7.6 million.
• Orange County Flood Control District v. ACC. Won jury verdict of $15,000,005 in an eminent domain proceeding in Riverside County for the owner of 364 acres of undeveloped land that straddled the Santa Ana River. The Flood Control District took a 233-acre flowage easement over part of the ACC property, and the main issue in the case was the extent to which the ACC property could have been developed in the absence of the condemnation. Our experts testified that residential development would have been likely even within the floodway of the Santa Ana River, by modifying the floodway through FEMA and by obtaining a series of regulatory permits to fill wetlands on the property. The Flood Control District took the position that the Santa Ana River floodway had never been modified before, that the regulatory permits could not be obtained, and therefore the part of the property it took was undevelopable and worth only $2.3 million. Following a five-week trial, the jury returned a verdict of $15,000,005, adding $5 to their verdict to express displeasure that the Flood Control District’s appraiser had rounded his final number down.
• High Speed Rail v. HPI/GSA: In an eminent domain case for the High Speed Rail Project, we represented HPI, the ground lessee and owner of the improvements on the property. The parcel contained a large warehouse that was leased to the IRS for the processing of federal income tax returns. High Speed Rail initially offered $7.4 million for the property. The trial court granted our client’s motion for summary judgment based on High Speed Rail’s failure to follow the eminent domain law, and the High Speed Rail tried to correct its errors by amending its authorizing resolution. The court then denied High Speed Rail’s motion to take possession of the property. Following a mediation, the case settled for $17 million, about 2.3 times the original offer.
• Gypsum Resources, LLV v. Masto. Won summary judgment invalidating Nevada state statute as unconstitutional, and obtained attorneys’ fees award of $920,000 against the State of Nevada after prevailing in the action. Client owned 2400 acres of hilltop land west of Las Vegas, with sweeping views of The Strip and the Las Vegas Valley. The property was zoned for one unit per two acres. In 2003 the State of Nevada passed a statute that prohibited Clark County from ever changing the zoning for the property. At the same time, Clark County passed an ordinance prohibiting the client from submitting an application to change the property’s zoning. The dual legislative acts were designed to lower the value of the property so that federal funds could be used to buy it more cheaply. We filed an action to invalidate both the State statute and the County ordinance. The District Court ruled, on summary judgment, that the State statute was unconstitutional under the Nevada Constitution. It also allowed the case to proceed against the County on a federal equal protection challenge, after which the County repealed its ordinance. The ruling invalidating the state statute was affirmed on appeal. (Gypsum Resources, LLC v. Masto, 672 F. Supp. 2d 1127 [D. Nev. 2010], questions certified, 671 F.3d 834 [9th Cir. 2011], certified questions answered, 294 P.3d 404 [Nev. 2013].)
• Stuck in the Rough v. City of Escondido: Won a writ of mandate in favor of our client, Stuck in the Rough, concerning 110 acres in the City of Escondido formerly used as the Escondido Country Club. The property had been zoned and generally planned residential for nearly 50 years. It had operated as a members-only golf course pursuant to a special use permit, but the course was ultimately closed after its membership dwindled. After the property was purchased by Stuck in the Rough for residential development consistent with its zoning, the City adopted a citizen-sponsored initiative that changed the property’s general plan designation from residential to open space/park. The trial court granted our client a writ of mandate, invalidating the initiative on the grounds that it unfairly discriminated against the property.
• Confidential v. Redevelopment Agency of the City of Hercules. Invalidated City’s effort to acquire 17.2-acre parcel owned by Client in an effort to prevent Client from opening a retail store in the community. City attempted to have its Redevelopment Agency acquire the property by eminent domain to prevent the project from moving forward. The Agency adopted a resolution to acquire the property but overlooked the fact that its power of eminent domain had expired. When the Agency tried to renew its power of eminent domain, we successfully challenged its blight finding in a reverse validation proceeding. This defeated the eminent domain attempt to acquire the Client’s property.
• Anderson, et al. v. State of California and Ahrens, et al. v. City of Malibu. Inverse condemnation actions on behalf of Pacific Coast Highway oceanfront homeowners against the State and the City of Malibu. Following the 1993 Malibu fire, mud, rocks, and other debris washed out of Pena Canyon and Piedra Gorda Canyon, blocking culverts under Big Rock Drive and Pacific Coast Highway. The materials flowed onto the highway and into clients’ homes, flooding them with as much as four feet of debris. After a seven-week bench trial, the trial court ruled that the State was liable for inverse condemnation. The cases thereafter settled for $11.25 million.
• County of Contra Costa v. Tosco Corporation. Acquisition of strips of client’s property on both sides of a state highway that bisected client’s 640 acres in western Contra Costa County. The property included a petroleum coke facility on 130 acres, but the remainder of the land was undeveloped. The highway widening project damaged the development potential of the property by reducing its access to and from the highway. Following legal issues trial to determine the size and number of larger parcels, case settled for $9.6 million.
• Orange County Transportation Authority v. OC Mills. Represented owner of The Block at Orange, a regional mall in Orange County, in eminent domain action. OCTA acquired 1.29 acres from mall’s parking lot and outer ring road in connection with widening of State Route 22. The take impacted parking and internal circulation on the property. OCTA’s initial offer was $2.2 million. After two years of litigation, the case settled for $7.75 million just prior to trial.
• San Mateo County Transit District v. Bohannon Development Company. Represented the owner of property poised for redevelopment on El Camino Real across from Hillsdale Shopping Center in San Mateo, CA. By eminent domain, the Transit District acquired a 16,000-square-foot strip of land across the property to extend 31st Avenue and have it pass under the Caltrain tracks. The acquisition split the property into two smaller remainder parcels, limiting the development potential of each of the smaller parcels. The Transit District valued the property under two alternate scenarios and claimed total just compensation owed was either $1.9 million or $3.84 million. At mediation, the case settled for $7.3 million.
• County of San Diego v. Ryan Companies US, Inc. Eminent domain action by the County of San Diego to acquire contractual development rights from developer, our client. The County had entered into a Disposition and Development Agreement with client, allowing client to develop 108 acres of County-owned land in the City of Santee, located at the northern terminus of the San Diego trolley. Client obtained entitlements from the City of Santee to construct a mixed-use project, including offices, a movie theatre, and multifamily residential. Later the County decided to expand the Las Colinas Detention Facility, a County-operated women’s jail, onto part of the 108 acres that it had included in the development rights contract with client. The County filed an eminent domain action to acquire from client the development rights over 15.5 acres of County-owned land that were included in the earlier contract. The action was unique in that it did not involve the condemnation of real property, but only the condemnation of contractual rights to develop real property. The County contended that the development rights were essentially worthless in light of the declining real estate market and the limited term of the contract. It offered $25,000 for the development rights. The case settled for payment by the County to client of over $1.7 million, an increase of 68 times over the County’s initial offer.
• CalTrans v. Tash Investments: Client owned an office building that was acquired by CalTrans to widen the I-5 freeway. The property featured prominent visibility from the freeway and convenient access to and from the freeway. Three long-term tenants occupied space in the building before the freeway widening became publicly known. CalTrans offered $8.8 million for the client’s interest in the property. Prior to trial, the case settled for $11 million, an increase of $2.2 million over CalTrans’ original offer.
• City of Rancho Cucamonga v. Hofer Properties, LLC. Clients owned 9.6 acres adjacent to the Metrolink railroad tracks in Rancho Cucamonga. The City acquired a strip off the property’s frontage to construct a grade separation, allowing the abutting street to pass underneath the railroad tracks. The grade separation caused the clients’ remaining property to suffer severance damages consisting of diminished access and visibility. The City’s initial offer was $225,000. One week before trial the case settled for $2 million plus a project change allowing restored access to the property.
• Greenwood & Co. v. C-D Investment Co. Represented defendant in 12-week jury trial involving the largest real estate commission in California history, over $12 million. Jury returned tort verdict exceeding $42 million against all remaining defendants except our client. The Court of Appeal affirmed the judgment and the case settled after the California Supreme Court accepted review.
• City and County of San Francisco v. Chevys Restaurants. Eminent domain action by City and County of San Francisco for expansion of Moscone Convention Center. The acquisition included client’s flagship restaurant location. Client relocated its restaurant one block away from the acquired location and, after legal issues trial concerning lease, client settled its claim for lost goodwill for $3.8 million.
• Azusa Pacific University v. San Diego Community College District. Inverse condemnation action for lost goodwill by private university that was displaced when its leased property was acquired for public use. Client was offered no compensation and was forced to sue to recover increased rents that were charged at relocation site. Client recovered over $700,000 in relocation benefits and compensation for lost goodwill.
• Alameda Corridor Transportation Authority v. EKCO Metals. Acquisition of a portion of property owned by family-run metals recycling business that had been in business for over 50 years. The acquisition was reconfigured in order to allow client to stay in business, and client’s remaining claims were settled for $4.1 million.
• City of Placentia v. Office Depot. Acquisition by City of Placentia of successful office supplies store for ONTRAC trenched rail project. The store relocated to a nearby location in Fullerton that was not as favorable as the acquired location. Client asserted claims for value of the real estate, lost goodwill, and fixtures and equipment. Following depositions of expert appraisers, case settled just before trial for $5.6 million.
• State of California v. U-Haul Real Estate Company. Direct condemnation case involving 25,000 square feet of land taken from client’s 4.25-acre parcel located in City of Riverside. Jury verdict after two-week trial and partial settlement resulted in recovery of more than four times the amount originally deposited by the State.
• Beck v. Evans, et al. Represented the former owner of a Malibu oceanfront home severely damaged in a landslide. Client was a cross-defendant in the case, which involved the present and former owners of five oceanfront properties near Point Dume. Plaintiff sought over $13 million in damages. After depositions of 47 expert witnesses, a favorable settlement was reached with numerous parties, removing client from the litigation.
• Carousel Records v. Belkin Productions. Four-week jury trial involving claim of interference with recording contract. Represented recording artist and his manager, who were defendants. Artist was signed to a recording contract with major label through an independent producer. The producer alleged that artist and his manager tried to enter into a direct contract with major label, cutting out the producer. Court granted nonsuit in favor of artist and manager.
• Travers Realty Corporation v. Morgan Guaranty Trust Co. of New York. Represented real estate broker in claim for commission involving master lease of Warner Ridge property by insurance company. Claims involved both breach of contract and business torts. Following a series of successful rulings by temporary judge (including lifting of an injunction against foreclosure), confidential settlement was reached.
• Ellis v. State of California. Represented owner of Pacific Palisades home severely damaged by earth movement. This was a test case for five other properties in the Castellamare area. Following a three-week jury trial, jury returned a verdict in favor of clients. The cases then settled for a total of $7.5 million.
• Los Angeles Unified School District v. KFC of America, Inc. Acquisition by LAUSD of 2.9-acre site in South Gate that included client’s restaurant on leased pad. Client asserted claims for lost goodwill (against LAUSD) and for the bonus value of its lease (against its landlord). Following mediation with LAUSD, and on the eve of trial against the landlord, case settled for a total of $1.35 million.
• City of Oakland v. Oakland Raiders. Research and writing, as junior associate, on trial and appellate proceedings involving City’s effort to acquire football team by eminent domain.
• Williams, et al. v. California Association of Realtors. Research, writing, and trial preparation (as junior associate) in a series of antitrust cases defending various multiple listing services throughout California.

Speaking Engagements

Listed below are a selection of the most recent speaking engagements Ed has given. To view more of his presentations and continuing legal instruction, please click here.

• Speaker, “Early Entry Statutes,” ALI-CLE Conference on Eminent Domain, San Diego, January 2017.
• Speaker, “Panel of the Masters,” CLE International Eminent Domain Conference, San Diego, February 2016.
• Speaker, “When Judges Overstep Their Authority,” ALI-CLE Conference on Eminent Domain, San Francisco, February 2015.
• Speaker, “Case Law Update,” CLE International Eminent Domain Conference, Los Angeles, May 2014.
• Speaker, “Defining the Nature and Scope of the Taking,” ALI-CLE Conference on Eminent Domain, New Orleans, January 2014.
• Speaker, “Regulatory Takings Update,” ALI-CLE Conference on Eminent Domain, Miami, January 2013.
• Speaker, “Working With Clients and Suggestions for a Case Plan,” ALI-ABA Condemnation 101, San Diego, January 2012.
• Speaker, “Cross-Examining Expert Witnesses in Complex Cases,” ALI-ABA Conference on Eminent Domain, Coral Gables, February 2011.
• Speaker, “Who Froze My Zoning?” California Building Industry Select Conference on Industry Litigation, Ojai, November 2010.
• Speaker, “Eminent Domain Wish List for Landowner and Government Lawyers,” ALI-ABA Conference on Eminent Domain, Scottsdale, February 2010.
• Speaker, “Bridging Gaps in Valuation,” ALI-ABA Condemnation 101, Miami, January 2009.
• Speaker, “Yamagiwa v. City of Half Moon Bay: City’s Storm Drain Project Caused Wetlands to Develop on Private Property,” Select Conference on Industry Litigation, Palm Desert, May 2008.
• Speaker, “Crossing the Line Between Public Use and Public Abuse,” ALI-ABA Conference on Eminent Domain, San Francisco, January 2008.
• Speaker, “What a Difference a Day Makes: The Substantive and Practical Aspects of the Date of Valuation in Determining Just Compensation,” ALI-ABA Conference on Eminent Domain, Miami, January 2007.
• Speaker, “Vegetation Control Litigation,” Outdoor Advertising Association of America, San Diego, April 2006.
• Speaker, “Reflections on the Kelo Decision,” International Council of Shopping Centers, Long Beach, December 2005.
• Speaker, “Takings Update,” California Building Industry Association Select Conference on Industry Litigation, Santa Barbara, November 2005.
• Speaker, “Challenging Governmental Land Use Decisions in California,” Lorman Education Services, Los Angeles, July 2005.
• Speaker, “Rapid Transit Takings,” ALI-ABA Conference on Eminent Domain, San Francisco, January 2004.
• Speaker, “Landlord/Tenant Issues in Eminent Domain,” Center for American and International Law Annual Program on Planning, Zoning and Eminent Domain, San Francisco, April 2003.
• Speaker, “Recent Developments in Inverse Condemnation,” California Building Industry Association Select Conference on Industry Litigation, Carmel, April 2002.
• Speaker, “Challenges to the Right to Take,” CLE International Conference on Eminent Domain, Los Angeles, June 2001.
• Speaker, “Anderson v. State of California Department of Transportation,” California Building Industry Association Select Conference on Industry Litigation, San Jose, October 1997.
• Speaker, “Takings Update,” California Building Industry Association Select Conference on Industry Litigation, San Diego, March 1996.

Publications

• Author, “The Government Gets a Freebie: Property Reserve and the Precondemnation Entry Statutes,” ALI-CLE Conference on Eminent Domain, San Diego, January 2017.
• Co-Author, “Nuts and Bolts of an Eminent Domain Trial,” CLE International Eminent Domain Conference, San Diego, February 2016.
• Author, “We All Make Mistakes: An Analysis of Reversals in California Eminent Domain Cases,” ALI-CLE Conference on Eminent Domain, San Francisco, February 2015.
• Author, “When the Project Matters,” The Practical Real Estate Lawyer, May 2014.
• Author, “Eminent Domain Case Law Update—Federal Cases,” CLE International Eminent Domain Conference, Los Angeles, May 2014.
• Author, “What’s Wrong With the Plan to Seize Mortgages by Eminent Domain,” Los Angeles Daily Journal, August 2013.
• Author, “Seizing Underwater Mortgages: An Idea That’s All Wet,” American Banker, August 2013.
• Author, “Regulatory Takings Update,” ALI-CLE Eminent Domain and Land Valuation Litigation, January 2013.
• Author, “The Basics of an Eminent Domain Case,” ALI-ABA Condemnation 101, January 2012.
• Author, “Winning the Battle of the Experts: Cross-Examination in Complex Cases,” ALI-ABA Eminent Domain and Land Valuation Litigation, February 2011.
• Author, “Ten Things I’d Change About Eminent Domain Law,“ ALI-ABA Eminent Domain and Land Value Litigation, February 2010.
• Author, “Exploring Settlement Opportunities in Eminent Domain Cases,“ ALI-ABA Condemnation 101, January 2009.
• Author, “Crossing the Thin Line Between Public Use and Public Abuse,“ ALI-ABA Eminent Domain and Land Valuation Litigation, January 2008.
• Author, “The California Supreme Court Takes Up the Date of Value Question,” ALI-ABA Eminent Domain and Land Valuation Litigation, January 2007.
• Author, “Record Rainfall Will Lead to a Flood of Litigation,” Insurance Journal, April 4, 2005.
• Author, “Litigation Over Rain Damage Pits Experts Against Experts,” Los Angeles Daily Journal, March 1, 2005.
• Author, “BART Expansion and Rapid Transit Takings: Compensation for Owners and Tenants,” ALI-ABA Eminent Domain and Land Valuation Litigation, January 2004.
• Author, “Landlord/Tenant Issues in California Condemnation Actions,” 2003 Institute of Planning, Zoning, and Eminent Domain, ch. 5, Center for American and International Law.
• Author, “Premium Treatment: Has a State Court Gone Too Far in Shielding the Insurance Industry from the Unfair Business Practices Act?” Los Angeles Lawyer, December 1994.
• Author, “Parol on Parole: A Plea to Tighten the Reins,” 3 California Litigation 27, 1989.
• Author, “Meeting the Challenge: Rethinking Judicial Disqualification,” 69 Calif. L. Rev. 1445, 1981.

Professional Affiliations

• Board of Directors, Disability Rights Legal Center
• Board of Directors, Owners’ Counsel of America (2009-2012)