When the government and a property owner come into conflict, the power is overwhelmingly on the side of the government. It has basically limitless resources and time, and if the government chooses, it can find ways to prevail against even very wealthy and powerful citizens. In fact, the U.S. Supreme Court has in some ways encouraged government to twist people’s arms when it wants their land.
The judicial system, of course, is supposed to be a place where property owners and government can meet on a level playing field, for a judge to decide fairly between them. But a bill now being considered by the California legislature would tilt that field strongly in favor of the government. AB 436—which will be considered by the Assembly Judiciary Committee this week—sharply limits a property owner’s options when he or she seeks the just compensation that the Constitution promises whenever the government takes actions that essentially confiscate land. This law does not apply to eminent domain cases, when the government literally takes the title to property; it applies only to what lawyers call “inverse condemnation”—cases in which the government has either damaged property or so drastically restricted the right to use property as to render it worthless to the owner. In such cases, the property owner can sue for just compensation, but under AB 436, the owner would risk a lot when doing so.
AB 436 would provide that when an “inverse condemnation” case begins, the government can make the property owner an offer to settle the case, and if the owner rejects that offer, and later loses in court, the owner can be required to pay for the government’s legal costs (beginning at the date when the offer was rejected). These costs can be very extensive, including paying for the government’s legal defenses and expert witnesses. But the bill doesn’t condition this requirement on the reasonableness of the government’s original offer. That means that government can—and likely will—make a lowball “offer,” gambling that it will win later and then force the property owner to pay the bill for the taking of his property. Given the fact that California law is already strongly biased against property owners—so much so that former Supreme Court Justice Janice Brown once wrote called private property “an endangered species in California”—this is a very significant risk. There’s no downside to a city offering a property owner five bucks for land worth a million, expecting that it can later win—or at least avoid losing through some procedural technicality—and then force the landowner to pay for its expert witnesses and lawyers.
Even stranger, AB 436 would apply the concept of “comparative fault” in cases of inverse condemnation. “Comparative fault” is a theory from tort law; it holds that if one person sues another for some injury or accident, and he was at least partially at fault for it himself, the court can take that into consideration when awarding damages. In other words, if you get in a car accident and you were 10 percent at fault, and the other guy was 90 percent at fault, the court can award you 90 percent and the other guy 10 percent of the damages.
This notion has no place in the law of property rights. The constitutional guarantee of “just compensation” isn’t punishment for some wrongful behavior on the part of the government. It’s just a guarantee that if the government takes your property for some public purpose, it will pay for it. Tort law is supposed to deter and punish wrongful conduct. But government takings aren’t “wrongful” conduct (at least, when they’re done within constitutional boundaries)—it’s just a forced transaction, in which the government compels you to sell your land. Nobody likes that, but it’s not the same thing as a car accident or someone purposely punching you.
Why, then, apply this alien concept of “fault” in inverse condemnation cases? Note that it can only be used to reduce the amount of compensation that a property owner will get. If the court finds that part of the reduction in property value was caused in some way by the property owner, then the court can reduce the amount of compensation. But AB 436 does not provide that the government will pay more if it does something wrong. Only the property owner runs the risk of losing his constitutional right to compensation.
If adding this “comparative fault” concept makes sense in inverse condemnation cases, why not apply it also to eminent domain? If the owner’s “fault” counts in one case, there’s no reason it shouldn’t count in the other. The only reason that AB 436 draws this line is that while eminent domain is a controversial political issue, people have tended to pay less attention to inverse condemnation cases—which are actually far more common, and often more devastating, to property owners in California. By confining this unfair new rule only to the latter cases, AB 436 would sneak under the radar.
Of course, courts already have the power to reduce compensation awards if the property was, for some reason, worth less than the owner claims. If he says the land had a mansion on it, but it actually only had a tarpaper shack, the judge can already award a small amount instead of a large one. But by adding “fault” into the law, AB 436 would encourage judges to declare that the property owner was in some sense responsible for his or her own loss—and reduce the compensation accordingly. This is a problem because the government sometimes takes extreme or unnecessary steps to address nuisances or other kinds of losses. Under current law, property owners have constitutional protections against such things…ideally. Current law also protects the government against unjust awards. As the Court of Appeal said in Bunch v. Coachella (1997), “If the public entity’s conduct is unreasonable and a substantial cause of damage, the entity is liable only for the proportionate amount of damage caused by its actions. This inverse condemnation rule invokes constitutional balancing principles and is not governed by tort concepts of fault or negligence. It requires a balancing of the public need for flood control against the gravity of harm caused by unnecessary damage to private property.” But if AB 436 is passed, the property owner could get less than the property is worth because the court finds that he or she was somehow at “fault” for the government taking away the land.
No other state has transferred the notion of “comparative fault” from tort law into property rights in this way. California should not be the first. AB 436 is at best confusing, and at worst a clever device to further erode the constitutional protections for property owners in this state. That bill should be rejected.
The California Alliance to Protect Private Property Rights submitted this letter of opposition to AB 436. (I’m on the CAPPR’s board.)
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