Date: 2/23/07

In a long-awaited decision, the California Supreme Court has handed down a major victory for school districts and other public entities that use the so-called “quick take” procedure taking immediate possession of private property using the power of eminent domain.

The decision in the case of Mt. San Jacinto Community College District v. Superior Court of Riverside County (Azusa Pacific University, real party in interest), clarified the timeline for setting the value of private property that is immediately possessed by school districts and other public entities and upheld other aspects of the “quick take” procedure.

CSBA’s Education Legal Alliance joined with the Los Angeles Unified School District in the filing of an amicus brief in this important case.

Typically, an entity exercising its power of eminent domain wants immediate possession of the property. But in the event of a dispute with the property owner, it can take years to go through the legal process necessary to condemn the property and determine its value. To make the process less cumbersome, the state Legislature has given public entities the authority to deposit in court an amount of money determined by the court to be “the probable amount of just compensation” for the property.  The condemning agency must deposit a sum equal to the appraised value of the property for prompt release to the owner. This is known as a “quick-take” eminent domain action.

The deposit earns interest at the statutory rate until it is withdrawn.  The owner can immediately withdraw the funds, but by doing so he waives all rights to dispute the taking other than the right to challenge the amount of just compensation.

But property-owner Azusa Pacific University challenged the “quick take” timeline for establishing a disputed property’s probable value. The university argued that the value of the property should not be set until a dispute had gone to trial, in order to meet the constitutional obligation that public entities must pay “just compensation” for property taken through eminent domain. In a volatile real estate market with wildly fluctuating prices, this would create havoc and more delay for school districts planning construction projects.

Azusa also argued that it was unconstitutional to force property owners to waive their rights to challenge the taking in exchange for accepting the deposit.  But the Supreme Court ruled otherwise, affirming both the statutory “quick take” process for taking and valuing property and the requirement that property owners waive their dispute rights if they accept deposits.

This is a major victory because districts frequently use the “quick-take” procedure. The ruling means that districts can move forward with certainty that if they deposit a sum equal to “the probable amount of just compensation,” they can safely proceed with their construction projects. They will not face the prospect that they’ll be required to pay an unknown, substantially higher price for the property based on its market value at the time of trial.  Property acquisition will thus be timely and cost effective.