Los Angeles County Metropolitan Transportation Authority v. Continental Development Corp.

The taking of private property in eminent domain is constrained by the California Constitution, which provides in relevant part that “[p]rivate property may be taken or damaged for public use only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner.” (Cal. Const., art. I, § 19; see also U.S. Const., Amends. V, XIV.) By statute, the owner of property acquired by eminent domain is entitled to the fair market value of the property taken. (Code Civ. Proc., §§ 1263.010, 1263.310.) 1 When the property taken is part of a larger parcel, in addition to being compensated for the part taken, the owner is compensated for the injury, if any, to the remainder. (§ 1263.410, subd. (a).) Compensation for injury to the remainder is the amount of the damage to the remainder, or severance damages, reduced by the amount of benefit to the remainder. (§ 1263.410, subd. (b).)

In the early eminent domain case of Beveridge v. Lewis (1902) 137 Cal. 619 [ 70 P. 1083 ] (Beveridge), this court distinguished between different types of benefits to remainder property. We stated: “Benefits are said to be of two kinds, general and special.…

Without any good reason for doing so, the majority abandons California’s adherence to a long-established rule of American law followed by most other states. The rule in question operates in the field of just compensation for property taken for use by the government, specifically in cases where the government appropriates only a *723 portion of a landowner’s parcel of real property. In such cases, the landowner receives, in addition to compensation for the portion taken, compensation for damages to the remainder not taken. (Code Civ. Proc., §§ 1263.310, 1263.410.) The Legislature has provided by statute that damages to the remainder are to be offset by the amount of any “benefit to the remainder.” (Id., § 1263.410, subd. (b).) The rule at issue here, which California courts have followed since 1902, provides that special benefits to the remainder, but not general benefits, are deducted from the damages to the remainder that are otherwise compensable. (Beveridge v. Lewis (1902) 137 Cal. 619 [ 70 P. 1083 ].) General benefits are those shared by all properties in the locale of the government project for which the property was taken. Special benefits, on the other hand, are not shared…

In great part, I agree with Justice Kennard’s thoughtful criticism of the majority’s new “setoff’ rule for partial-takings cases. For the first time in modem California history, a public agency that condemns part of a larger parcel may reduce its monetary liability for severance damages by “setting off’ benefits to the remainder which are widely shared by condemned and uncondemned parcels alike. There has been no change in the well-established laws governing eminent domain valuation that would compel this radical alteration, and, as Justice Kennard indicates, the majority provide no other persuasive justification for decreeing it.

Even more troubling, as Justice Kennard points out, is that the majority expressly overrule a principle of fundamental fairness long followed in this state and elsewhere as a matter of constitutional doctrine. It has been widely understood that the owner of a parcel taken in part is denied “just” compensation for “damage[]” to the remainder (Cal. Const., art. I, § 19; see also Code Civ. Proc., §§ 1263.230, subd. (b), 1263.420) if required to forfeit, as a setoff against such compensation, benefits to the remainder which are shared in common with…