March 14, 2014

Court to California: Entering Private Land for Water Tunnel Studies Is a Taking

By J. David Breemer Senior Attorney

In  the latest development in California’s water wars, the California Court of Appeals issued a significant decision yesterday in Property Reserve, Inc. v. Superior Court, 2014 WL 978309 (Cal Ct. App. 2014). The opinion limits the State’s ability to enter and test private land it hopes to condemn for a public water project of state-wide concern.

It is no secret that Southern California cities and Central California farmers have long thirsted for a secure and steady supply of fresh water from the wetter North.  Traditionally, the Sacramento-San Joaquin Delta has served as an important conduit for much of the fresh water making its way to Central and Southern California. But the Delta water supply system is under increasing pressure, including from environmental policies that have limited Delta water transfers to protect the endangered Delta smelt fish. See here.

In the hopes of creating a less-environmentally constrained and thus, more certain, fresh water supply from North to South, the State has proposed building two 25 billion dollar water tunnels under Delta areas and to southern lands.  The tunnels are planned to go through many privately owned parcels. The State must therefore condemn most of the land needed for the project. 

But prior to condemning property and beginning the project, the State seeks to conduct certain environmental and geological studies on the subject private land. It specifically wants to bore holes on certain land, take soil samples, trap animals, and generally have a right to access to the lands for several years of investigation.

Rightfully concerned that some property owners would balk if state agents simply showed up on their land,  the State sought an order from a state court authorizing its agents to enter tens of thousands of acres of private Delta properties (by vehicle, boat or on foot) to carry out the tests. In so doing,  the State asserted that no compensation was due the effected property owners because any pre-project property testing was non-compensable “pre-condemnation” activity.  More than 150 Delta property owners objected;  they claimed in court that the State’s entry onto their lands and testing activities was itself a compensable taking that the State could carry out only after a jury awarded compensation in an eminent domain proceeding. 

The California trial court agreed that geological boring activity that caused permanent alterations of land was a physical taking that must be compensated, but it held that environmental sampling, and entry onto private land for that purpose, was not.  The State and property owners appealed.

Yesterday, the California Court of Appeals sided with the property owners in a 2-1 decision. It affirmed that geological testing would cause a taking by permanent physical occupation of land. Yet, it went further and  concluded that the environmental testing program (allowing up to 8 agents to enter private lands for 66 days a year),  effectively granted the State a temporary easement across the owners’ lands, one which rose to the level of a compensable temporary taking.  The court majority held  that the State had to go though eminent domain proceedings, and submit to  a jury determined compensation requirement, before carrying out such a program.

This is an important decision.  California’s water tunnel plans undoubtedly seek to advance an important public interest.  But, as the court’s decision recognizes, even the most desirable ends do not justify the government in ignoring the constitutional rights of individual property owners.  As the Supreme Court has repeatedly explained, see here, the right of property owners to exclude trespassers, including well-meaning government agents, is a fundamental property right.  Indeed, without this right, there is no “private” property; only government land in waiting. Given the importance of the right to exclude, it is critical that the State afford complete due process and full compensation when it seeks to invade a property owner’s land, even if only for a relatively short period.  

Fortunately, this is exactly what the California Court of Appeal held today.  The State simply may not race to the light at the end of its water tunnels – no matter how important they are– by ignoring its duty to pay just compensation prior to sending swarms of agents to enter, poke, prod and occupy private land.

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