A Lawyer's Take on Eminent Domain Issues: Better Planning to Minimize Impacts to Business...

A Lawyer’s Take on Eminent Domain Issues –

Better Planning to Minimize Impacts to Business Owners

Presented by: Anthony H. Misseldine

©JacksonWhite, P.C. (2012) All Rights Reserved

©JacksonWhite, P.C. (2012) All Rights Reserved

FY 2016 CONSTRUCTION PROGRAM

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FLOOD CONTROL DISTRICT OF MARICOPA COUNTY:

ACTIVE PROJECTS

“. . .nor shall private property be taken for public use, without just compensation.”

5th Amendment to the United States Constitution

• “Private property shall not be taken for PRIVATE use. . .”

• “No private property shall be taken or damaged without JUST COMPENSATION having first been made. . .”

Arizona Constitution: Article 2 Section 17

CAN THE EXERCISE OF THE POWER OF EMINENT DOMAIN BE CHALLENGED??

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YES, BUT FEW SUCCEED.

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• Early involvement

• Be aware of planning process

• Give input (show up at public meetings)

• What is at stake if the project is

approved?

WHAT IS A TAKING?

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A TAKING MAY BE. . .

• TOTAL OR PARTIAL

• PERMANENT OR TEMPORARY

• REGULATORY

WHAT MAY BE TAKEN?

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• ANY INTEREST IN REAL PROPERTY

• FEE TITLE

• LEASE (LANDLORD/TENANT)

• EASEMENT/LICENSE

• SURFACE/SUBSURFACE

WHAT INTERESTS IN “PROPERTY” MAY BE TAKEN BY EMINENT DOMAIN?

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WHAT ARE NON-COMPENSABLE DAMAGES?

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BUSINESS LOSSESS

The Process

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1. Resolution to acquire property (purchase or

condemnation)

2. Appraisal or basis for valuation

• Be careful what you say or disclose

3. Offer to purchase (20 days)

4. If the property owner accepts—sale of real estate

5. If not, government must condemn:• File lawsuit• Immediate possession• Expert reports/Rebuttal• Trial• Judgment (jury trial)• Government pays the judgment • Court enters a “Final Order” conveying title

WHAT IS IMMEDIATE POSSESSION?

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• GOVERNMENT’S RIGHT TO USE THE PROPERTY BEFORE

JUDGMENT IS AWARDED (ARS § 12-1116)

• DEPOSIT OF “PROBABLE DAMGES”

• PRE-JUDGMENT INTEREST ON DAMAGES FROM THE DATE

OF POSSESSION

• Includes actual damages awarded above the deposit

• The deposit may be drawn down, but there is a

catch.

HUH?

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• WHAT MAY AN OWNER DO WITH PROPERTY AFTER A PUBLIC PROJECT IS ANNOUNCED, BUT BEFORE A CONDEMNATION LAWSUIT?

• REASONABLE ENHANCEMENTS

• Title report (read it and related documents)

• Alta survey of property

• Aggregate/Ore studies

• Reserve studies

• Supply/Demand information

• Operating information

• Royalty rate data

• Permit status and history

• Ownership

NECESSARY INFORMATION

75TH AVENUE & THE SALT RIVER

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Who may testify as to the value and damages?

• Property Owner (Company representative with

knowledge/authority)

• Appraiser

• Not all appraisers are the same

• Valuation method(s) must be accepted by the courts

• “Daubert” challenges

• Cost

• Other experts may be required

VALUATION AND APPRAISAL ISSUES

• Tax valuation appeals

• Business records being shared

• Violations or citations

• Lapsed permits

• Statements/Data submitted to agencies

• Discussions with appraisers, engineers, for the

government

• Prior appraisals/valuations

• Costs

POTENTIAL CONCERNS

U.S. ARMY CORPS and 404 PERMITS

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RAPANOS et ux., et al. v. UNITED STATEScertiorari to the united states court of

appeals for the sixth circuit

• Owner/Operator

• Eminent Domain Attorney

• Appraiser

• Engineer/Hydrologist/Geologist

• Others

THE TEAM

THE PART TAKEN

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“. . .any diminution in value of the remaining property caused by the taking.”

Examples of this include:

• DRAINAGE • RE-OPENING MINE PLAN APPROVAL

• LOSS OF PARKING • TRIGGERING GOVERNMENT REVIEW

• RESTRICTED ACCESS • INCREASED COST OF

OPERATIONS

• DECREASING SIZE • REDUCED RESERVES

• CHANGE IN USE • PERMITS

• FUNCTIONALITY

• AESTHETICS

SEVERANCE DAMAGE

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California Case

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California Case – During Construction

California Case – Near Completion

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Creamland Dairy – 2002 Aerial View

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Creamland Dairy – 2007 Aerial View

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PARK CITYBEFORE

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PARK CITYAFTER

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