Abandoning Your Eminent Domain Action May Come With A Hefty Price Tag

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On occasion, public agencies decide to abandon or partially abandon an eminent domain proceeding.  The most typical reason is due to a revision in project design, making the property no longer necessary for the proposed project.  However, to the surprise of many, an abandonment can also occur after an agency receives an unfavorable jury verdict.  Code of Civil Procedure section 1268.510 provides that an agency "may wholly or partially abandon the proceeding" any time after filing the complaint up until 30 days after the entry of final judgment.  (The only exception is if the property owner has substantially and detrimentally changed its position in justifiable reliance on the eminent domain proceeding and the owner cannot be restored to the same position as if the proceeding had not been commenced.) 

So the agency can abandon, but at what cost?  In the case of a full abandonment, the agency is required to pay all the owner's litigation expenses, including attorneys' fees, costs, and expert fees.  (See Code of Civil Procedure section 1268.610.)  In the case of a partial abandonment, the owner is entitled to only those litigation expenses that would not have been incurred but for the partial abandonment. 

Want to see how this all plays out in real life?  Take a look at the story we've been following in Rancho Cordova.  As we reported back in October, the agency got hit with a jury verdict of $8 million -- about 20 times the agency's offer.  The agency could move forward with the purchase, appeal the decision, or abandon the action.  According to an article in the Sacramento Bee, "Rancho Cordova a big loser in land fight," the agency is apparently going with the third option.  As a result, the owner is receiving all his litigation expenses (to the tune of about $900,000).  And, the agency itself spent about $1.2 million in litigation costs in bringing the eminent domain action (ouch!).  So, in total, the agency gets no property, but spends over $2 million. 

The lesson is that while an agency can abandon an eminent domain action (nearly at any time), it sometimes comes with a hefty price tag.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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