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Most property owners are aware that the government can take their property for a public purpose (California Constitution Section 19 (a) "Private property may be taken or damaged for a public use and only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner. The Legsislature may provide for possession by the entity condemning the property following commencement of eminent domain proceeding upon deposit in court and prompt release to the owner of money determined by the court to be the probably amount of just compensation."). Sometimes eminent domain is used for major infrastructure projects such as freeways and other public improvements. While there might be argument regarding the fair market value of the property which government would pay, the need for the infrastructure has been more historically acceptable. More controversial was the use of eminent domain by Redevelopment Agencies to take private property and turn the property over to private development interests to generate tax revenues. Redevelopment Agencies had their beneficial uses when used cautiously like in Santa Clarita, they have long ago lost their main purpose of rehabilitating an area which was considered blighted. After the Northridge earthquake, the former city manager of Santa Clarita proposed a Santa Clarita Redevelopment Agency over most of the City, including Valencia. Only litigation was able to stop that overreaching effort. Now that Redevelopment Agencies have been dissolved by the State Legislature, this risk has been removed. However, there are remaining eminent domain risks to property owners.

One aspect of eminent domain you might not be aware of is the number of entities which are not regular part of the government, but rather regulated by agencies such as the Public Utilities Commission ("PUC"). Recently, a client had a request of a private pipeline company to increase its easement on his property. While the negotiations have been amicable we have been reminded that a PUC has the ability, if necessary, to utilize eminent domain to obtain this easement. This is an excellent reminder for all property owners to be aware of who have utility easements on their property.

Recently property owners obtained a victory from the California Courts regarding the practice of governmental agencies to on being allowed to enter your property to conduct testing to determine its feasibility for a project prior to the actual "taking" by eminent domain. The California Court of Appeal, Third Appellate District ruled in Property Reserve Inc. v. Superior Court (Property Reserve) that efforts by the State of California to use California Code of Civil Procedure section 1245.010 et seq. (frequently referred to as the eminent domain entry statutes) to enter private property and conduct environment testing and geological studies for a potential water project was in fact a taking subject to the eminent domain law. While in this case the State's petition covered hundreds of private parcels owned by over 150 separate owners, it could apply to a single property. The Court denied the studies saying it was unconstitutional if used to take or damage property and ruled the entry statutes violated the protections in Article I, Section 19, subdivision (a) of the California Constitutions. The court stated that, "…the entry statues do not provide a constitiounally valid eminent domain proceeding by which the State can take landowners' property interests to accomplish the geological activities. This is because the proceeding, as a matter of California constitutional law, does not provide for a condemnation suit which the landowners receive all of their constitutional rights against the States' exercise of its eminent domain authority, including the right to a jury determination of just compensation for a direct and permanent taking."

The Court in Property Reserve stated, "[i]n other words, if a California condemnor intends to take property, it must acquire a property interest by filing a condemnation suit that provides in it all constitutional rights owed the landowner against the exercise of eminent domain. It may not intentionally take property while leaving the landowner the responsibility to initiate a new legal action to receive his constitutional rights. The entry statues violate this principle of California constitutional law, as they do not provide for a condemnation suit by which a condemnor can directly acquire an interest in property and in which the affected landowner can receive a jury determination of just compensation for that suit."

The Court also clearly pointed out how the entry statutes conflict with California Government Codes Section 7267.6 which provides: "If any interest in real property is to be acquired by exercise of the power of eminent domain, the public entity shall institute formal condemnation proceedings. No public entity shall intentionally make it necessary for an owner to institute legal proceeds to prove the fact of the taking of his real property" The Court concluded that is exactly what the entry statues did, allowing entry to perform studies and if there was damage then allowing the property owner to file a civil action. The court also stated the entry statutes violated the California Constitution Section 19(a) by not providing the property owner the right to a jury unless waived.

The most long ranging aspect of this decision is the portion which makes it clear that performing environmental studies, while a temporary use of the property is treated, "[a]s an intentional physical invasion, the environmental activities amount to an appropriation of a valuable property right…"

While this decision involved a huge proposed water public works project and hundreds of properties, there is no reason it should not apply to an individual property owner where a governmental entity, or its regulated entity, attempts to perform studies on your property to determine if they can proceed with a proposed project. This extra protection and potential compensation to the property owner should have significant positive impacts for property owners in the future.

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