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Irvine Eminent Domain Legal Blog

California wildfires: what is the cause?

In previous posts, we discussed the impact that wildfires and resulting rains and mudslides have had on homeowners and property owners across California; particularly in the Montecito area near Santa Barbara. Hundreds of thousands of acres have been destroyed, and people have lost their lives and their homes.

As a result, lawsuits and claims have started trickling into court against utility companies who had utility poles in the area. Several allegations against the utility companies include improper maintenance of electric wires and improper handling and service of those wires (Negligence).  

What is 'public use'?

When government takes property through eminent domain, it does so because it needs the land for a public use or project. Public use is not always as clear as the word suggests, and there are cases when the intended use does not seem to others to be "public."

In situations where a landowner challenges whether the government's taking of the property is for public use, there can be a hearing where a judge will make a determination. In this post, we will look at what "public" use is and what happens at a hearing that challenges eminent domain based on lack of public use.  These challenges are known as "right to take" challenges, which allege that the government has not met its burden of proving that the proposed use is public.  Other right to take challenges can include whether the property sought to be acquired is necessary for the proposed project or public use, and whether the project as proposed is planned in a manner that causes the least possible private injury.

A look at just compensation

The U.S. and California Constitutions protect landowners when their property is  taken by requiring payment of just compensation. However, "just" in the eyes of property owners is often hard to define. Property can be held by generations of families over many years, and businesses can be in similar situations.  Requiring a business to relocate and taking property can evoke strong feelings from landowners, even though the government has the right to do so.  Eminent domain disputes may be contentious and landowners sometimes look at other factors, such as the value to them as opposed to the fair market value. 

Special value to an owner is not compensable under Eminent Domain law.  While it may never feel "fair" or "just" for forced acquisition of private property and relocation of a business, the procedures and laws specific to Eminent Domain in California provide landowners and business owners the armor and ammo needed to assert claims for greater compensation beyond what is offered to them initially.

The Aftermath of Eminent Domain

Eminent Domain, which is a forced sale of private property to the government for a public project, is challenging before, during and after proceedings have concluded.  

The government obtains a final order of condemnation, which it records in the county in which the property was located.  Title officially transfers to the government upon recording, and the government's interest in the property is placed at the top of the chain of title.  The government, which has likely already taken possession of the property, owns the property outright, and may use it for the public use the government condemned the property to serve.

From the owner side, property owners are entitled to certain special tax benefits from the involuntary conversion, including treatment under Internal Revenue Code section 1033.  Property owners are entitled to transfer the tax basis from the condemned property to new property purchased which the condemnation proceeds.  Peterson Law Group does not give tax advice, and property owners in eminent domain proceedings are encouraged to seek the advice of their tax advisors.

City fire investigators link wildfires to power lines

Readers of this blog and residents all across California are likely keeping an eye on developments regarding the North Bay wildfires that devastated lives and homes in the area last year. While there has yet to be a firm determination on the cause of these fires, ongoing investigations continue to reveal updated information.

Most recently, media reports and public record indicate that city fire investigators from Santa Rosa have determined that PG&E power lines may have caused at least two smaller fires in the area. 

Eminent domain action threatens my home. What should I do?

Homeownership in California can be a tough dream to make real. Median prices in Silicon Valley are in the seven digits, according to Zillow. In Los Angeles, the median price is estimated at nearly $600,000. If you own a home, you want to make the most of it.

If you are faced with the threat of eminent domain, you need to know what your options are for maintaining possession. If that isn't possible, you need to be confident that you are compensated based on all relevant factors, not just what the government entity seeking your property decides.

Inverse condemnation cases

The Constitutions of the United States and California both offer protections against the unlawful taking of private property by the government. The government, no matter at what level, cannot take land from a property owner or cause damage to property without paying just compensation.  

If government action or a public project causes damage to property without just compensation, a suit for recovery under a claim of inverse condemnation might be possible. Although the theory is similar to eminent domain, the procedure varies in several ways, especially because the property owner becomes a claimant and must establish liability.  

Power lines a common feature in areas where wildfires started

Power lines may have played a role in the recent wave of wildfires that have devastated parts of California. For many property owners who suffered losses and death due to the fires, as well as mud and landslides that followed heavy rains, the information may spark the interest of those seeking legal action. More than 50 lawsuits have been filed already and the number continues to grow.

The claim at the heart of the suits is that actions taken on the part of various electric utilities in maintaining power poles and lines resulted in conditions that allowed the fires to happen. Vegetation and trees grew uncontrolled and when severe storms swept through various regions, electrical sparks lit drought-ravaged foliage on fire.

Careful assessment needed on inverse condemnation claims

There is good news on the California wildfire front. Officials report that as of earlier this month, the Thomas Fire is now 100 percent contained. That does not mean it is out. A number of other fires also remain on the active list, but the Thomas incident is notable because of its size. At nearly 282,000 acres, In addition to the loss of a life, the fire destroyed more than 1,000 structures.

The cause remains under investigation, and as we noted in a previous post, the risk of possible landslides remains high. Many property owners likely have concerns about what option they may have if the worst occurs and soil lacking erosion-controlling plant cover gives way under even a single heavy rainfall. Inverse condemnation may be one legal means by which to seek recovery for property loss. However, many factors need to be thoughtfully assessed to determine the likelihood of success.

The challenge of achieving 'just' compensation

What is just? Australian barrister Julian Burnside is fairly well known for his efforts to try to address this question. He's written a book about it and a few years ago gave a talk on it at TEDxSydney. Burnside is a commercial litigator by practice, but his passion around justice stems from his experience fighting against unjust treatment of refugees in his home country and around the world.

How does this tie in with the issue of eminent domain, you may ask. The physical taking of private property by government may not warrant being on the same justice plane as the treatment of refugees, but let's not forget that nothing less than the Constitution of the United States says clearly that such takings cannot occur without due process and just compensation being paid to the owner. Yet, what constitutes what is just or fair, as Burnside notes, is ambiguous.

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