5 Prelitigation Process

• Library: Eminent Domain: A Handbook on Condemnation Law (ABA) (2011 Ed.)

Robert H. Thomas

This chapter deals generally with the "prelitigation process," which encompasses everything from initial client contact through the day before trial. Condemnation differs in significant respects from other civil litigation because thorough familiarity with the applicable substantive law of eminent domain is critical. This chapter will cover items specific to eminent domain pretrial preparation such as the resolution of public necessity, the Uniform Relocation Act, formal and informal offers to purchase the property at issue, and information and evidence about the property being condemned.

Eminent domain is the sovereign power of the government to take private property against the will of the property owner, provided that the taking is "for public use" and that "just compensation" (and in some states, separate compensation for "damage") is provided.¹ These limitations form the basis for an eminent domain trial. The two main issues in every eminent domain case can be broadly characterized as (1) the power of the condemnor to take the property and (2) whether the compensation provided will be "just." Within these broad areas are a multitude of procedural and substantive issues, detailed in other chapters of this book, but most issues in eminent domain generally fall within these two categories. Ensuring that the condemnor has the power to take the property and, if so, that full compensation is provided to the property owner are the goals of trial preparation in an eminent domain case for the lawyers representing both sides. Federal and state constitutions and laws set important limitations on government's power, and provide safeguards protecting an owner's right to possess and use property. The eminent domain lawyer should always remember that he or she practices constitutional law and is dealing with a right that has been described as the basis for the protection of all other constitutional rights. In other words, eminent domain is important work.

INITIAL CLIENT CONTACT

The lawyer representing the property owner as well as the lawyer for the condemnor must appreciate that many property owners may feel that taking their property—even with compensation—is unjust and unfair. Many eminent domain regimes appear to be tilted in favor of the condemnor, exemplified by exparte seizure of property, accelerated statutes of limitations or repose for challenging the power to take,² and a substantive law that places little restrictions on the government's power.³ Many clients feel powerless in this situation, perhaps more so when after contact with a lawyer, they discover the extent to which the law favors the condemnor. Many clients may believe that the government should not have the power to take their family home, their business, or their other property, or believe that there is no good reason to locate the project on their property. Part of counsel's function is to give the property owners a realistic assessment of the situation and to educate them regarding fruitful avenues for litigation.

The lawyer should establish with the client the goals for the case early on by conferring with the property owner to determine whether he or she wishes to contest the taking or focus on recovery of just compensation. Most eminent domain actions center around issues of compensation, but after Kelo v. City of New London⁴ the public has a heightened—and perhaps unrealistic—awareness of possible challenges to public use. The legal standards applicable to such challenges remain largely unchanged after Kelo, at least under federal law.⁵ State courts may interpret their state constitutions as providing greater protection to the property owner on the issue of public use.⁶ Also, in reaction to Kelo, several states and local governments have attempted to reform their laws regarding the ability of condemning authorities to take property. Lawyers should be thoroughly familiar with the standards for such challenges applicable in their jurisdictions.

It is also important to discuss attorneys' fees and costs with the owner during initial contact. Most jurisdictions do not permit the recovery of attorneys' fees or costs in eminent domain actions,⁷ although many property owners may expect it as "just compensation." Determine what the law of the local jurisdiction permits and inform the client accordingly, as this issue may determine how the client wishes to proceed.

As in other cases, upon retention the lawyer should execute a written retainer and employment agreement. In eminent domain representation, there are at least three critical subjects of the retainer agreement: the fee structure (hourly, contingent, or other), responsibility for costs (especially on items such as payment of appraiser fees and costs), and the authority to negotiate and settle any litigation.

RESOLUTION OF PUBLIC NECESSITY

The lawyers representing the condemnor and the property owner know that it is the condemnor's burden to establish, by resolution of public necessity, the public use of the property to be condemned and the need to condemn and take the property. Counsel must distinguish between "necessity" and "public use," and the substantive differences between the two are covered elsewhere in this book. Generally speaking, after notice to the affected property owners and at least one public hearing, the condemnor must produce and publish the resolution of public necessity. The resolution must show that the taking of the property is in the public interest, that the taking will maximize the public benefit and minimize private injury, and that the property to be taken is necessary to fulfill the public use.⁸ In most, if not all, jurisdictions a proper resolution of public necessity is a precondition to instituting an eminent domain lawsuit.

The condemnor's lawyer should ensure that all elements of the process have been followed. California law, for example, requires that the resolution contain a statement that an offer has been made to the owner of the property, if known.⁹ The property owner's lawyer should review the resolution and the adequacy of the record supporting it. Substantive judicial review of resolutions of public necessity is extremely deferential,¹⁰ but procedural requirements receive strict scrutiny.¹¹ In some states the resolution constitutes only a rebuttable presumption that the site chosen is best suited for the condemnor's purpose and does the least harm to private property interests. Counsel should be prepared to defend or rebut this presumption, typically by pretrial motion, with evidence of other sites that are available or were considered. Often, different rules are applicable depending on what agency or entity is doing the taking. For example, under Hawaii's eminent domain statutes, if the City and County of Honolulu is the condemnor...