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October, 2006

Moo Town News
By Judy Borello

Anderson Initiative (Prop. 90) Could Radically Impact California Eminent Domain Law
By John C. Murphy and Lisa J. Holmes
(Editor's Note: Judy Borello has devoted her space this month to a issue she feels if vital to us all, Prop. 90.)
Anita S. Anderson, an obscure California homeowner, may have a surprising, profound and revolutionary effect on eminent domain in California. The "Anderson Initiative," which will appear on the November ballot (Prop. 90) could end the use of eminent domain for redevelopment purposes. Less obviously, the proposed constitutional amendment could drastically impact nearly every other eminent domain case, including many already on file. The Anderson Initiative would also vastly expand landowner remedies for down-zoning and other, currently non-actionable, government planning activities. At a minimum, Anita Anderson's Initiative could cause a significant increase, at taxpayers' expense, in governmental costs to acquire property and build needed public works projects.

Prospects for Passage
The Initiative has some well-heeled supporters. Assemblywoman Mimi Walters of Laguna Niguel has taken charge of the effort, and the Initiative is financed by, among others, New York developer Howie Rich. Some solid opposition, with the California League of Cities at the forefront, has been mounting. The League decries the measure as "go[ing] dangerously beyond what is needed or reasonable to protect homeowners from the use of eminent domain."

Key Provisions
Bars the use of eminent domain unless the property taken will be owned and occupied by a governmental agency for its stated public use. Restricts the use of eminent domain to truly "public" uses. Prohibits redevelopment agencies from using eminent domain for the ultimate benefit of private developers.

Provides the landowner or the owner's heirs with the right to buy back the property if the property ever ceases to be used for the stated public use.

Values property in accordance with the government's intended use of the property whenever this new use results in a higher value for the property, regardless of whether current zoning would permit the new use. (This would overturn well-established eminent domain precedent.)

Defines "damage" to include "government actions that result in substantial economic loss to private property," including down-zoning, elimination of access to private property and limitations on the use of private air space. Requires payment of just compensation for such damages.

Awards attorneys fees to all landowners in eminent domain actions.

Invalidates unpublished eminent domain court decisions. Judgments in every eminent domain case that do not result in a published appellate opinion would be annulled.

Requires blight findings be made on a parcel-by-parcel basis, not a project area basis.

Applies immediately to any eminent domain proceeding in which there has been no final adjudication.

Requires appraisers to ignore offsets for likely dedication requirements associated with achieving a property's highest and best use.

The provisions of the measure are severable. Thus, if a court finds any of the provisions invalid, that finding will not affect other provisions.

Would serve as an amendment to the California Constitution.

The Context
The Anderson Initiative reflects some strong post-Kelo v. City of New London hostility toward governmental interference with property rights. Proponents tout the Initiative as necessary to "protect our homes" from runaway redevelopment. Some opponents point out that redevelopment does not represent a substantial threat to most of "our homes." Over the last five years, eminent domain was used in less than 3% of all redevelopment agency property acquisitions in California. Last year, a total of only three single family owner-occupied homes statewide were acquired for redevelopment through formal eminent domain proceedings.

John C. Murphy is Chair of Nossaman's Eminent Domain Practice group and specializes in commercial litigation with an emphasis on eminent domain, inverse condemnation and other complex business disputes. He can be reached at [email protected] Lisa J. Holmes is an associate in the Eminent Domain Practice group and can be reached at [email protected]

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