A year and a half ago, the California Court of Appeal issued a decision in one of the most significant court cases of the year, at least in the eminent domain world.
For decades, California agencies have used California’s right of entry statutes to gain access to private properties to conduct investigations and tests before filing an eminent domain action. Sometimes these “entries” involved no more than a person wandering around your property for a few hours, but other times it included soil borings and other more serious physical occupations and alterations of property.
In 2014, the Court of Appeals in its decision in Property Reserve Inc. v. Superior Court, rejected an agency’s request to conduct investigations and tests pursuant the right of entry statutes. The Court held that any significant physical intrusion onto private property constituted a taking for which just compensation must be made.
This ruling means that agencies are required to go through eminent domain proceedings before engaging in any intrusive investigations on private property. This gives the property owner certain protections which were not provided for under the right of entry statutes.
But when the California Supreme Court decided to take up the case of Property Reserve Inc., many agencies were left wondering what rights they had under the right of entry statutes. Based on a Court Appeal published last week, Young’s Market Co. v. San Diego Unified School District, agencies have at least one answer – at least for the time being.
Young’s Market Co. v. San Diego Unified School District
In March 2015, the San Diego Unified School District petitioned for an order granting a right of entry on a two-acre parcel owned by Young’s Market Co. and rented by K-1 Racing. The District asserted that they were interested in acquiring the property for the elementary school, which sits adjacent to the two-acre property.
As part of their investigation to acquire the lot, the district’s proposal included an environmental study that would last 10 days and just compensation of $1,000 would be given.
Young’s opposed the petition, arguing the district’s taking was unconstitutional and the right of entry statutes only allow innocuous and superficial entries on the property, akin to a survey or map.
Young’s argued that the removal of dirt and building materials affected an obvious permanent physical occupation and would require the district to file a condemnation suit and pay just compensation as determined by a jury.
Young’s alternatively asked the Court to stay the action to await the Supreme Court decision on Property Reserve Inc., or if it were inclined to grant the petition, then order the district to deposit $500,000 into his account toward compensation in lost rent, goodwill and property.
The Court concluded that the school district’s activities did not qualify as taking any physical property that would require an eminent domain be filed or a jury trial for just compensation. The Court found no physical taking because the test involved limited material removed. The Court also found no significant disruption to the business since the test lasted only 10 days.
It is still unclear to what extent agencies can use the right of entry statutes. According to the Court in Young’s Market Co., testing and inspecting property within a 10 day time frame is acceptable and an eminent domain proceeding is unnecessary – at least under the circumstances there.
This apparent opening for agencies to once again use California’s right of entry statutes may only be temporary as we wait for a decision by the California Supreme Court in Property Reserve Inc. This decision could align with the decision made in Young’s Market Co., it could go in an opposite direction that would require an eminent domain be filed before entry, or it could present an entirely new set of rules and standards for the right of entry.
Lastly, an important caveat should be noted: The cases discussed above impact only those situations where the government seeks a court order allowing a right of entry. It has no impact on voluntary agreements that are often reached by agencies and property owners.
To learn more about whether an agency has the right to enter your property or not, or about eminent domain in general, give us a call at: (866) EM-DOMAIN.