IN THE SUPREME COURT OF CALIFORNIA
CITY OF PERRIS,
Plaintiff and Respondent,
Ct.App. 4/2 E053395
RICHARD C. STAMPER et al.,
Defendants and Appellants.
Super. Ct. No. RIC524291
The City of Perris (the City) is located 70 miles east of Los Angeles. This
case involves the City‘s condemnation of a 1.66-acre strip of defendants‘ property
in order to build a road. By taking the strip, the City has divided the property into
two irregularly shaped parcels. The City claimed that defendants would have been
required to dedicate the strip to the City, with no compensation, had they sought to
put the property to its highest and best use, i.e., light industrial development. The
City thus offered to pay defendants the agricultural (undeveloped) value of the
strip, relying on City of Porterville v. Young (1987) 195 Cal.App.3d 1260
(Porterville).) Porterville held that when a city takes a portion of undeveloped
property, which it would have lawfully required the owner to dedicate to the city
as a condition of developing the remainder of the property, the owner is entitled to
compensation based on the undeveloped state of the property rather than its
highest and best use. (Id. at pp. 1265–1269.
~ SEE CONCURRING AND DISSENTING OPINION ~
The trial court agreed with the City that Porterville applies here and that
defendants were entitled to a stipulated agricultural value of $44,000 for the
taking. In reaching this conclusion, the trial court found the City‘s dedication
requirement to be lawful under Nollan v. California Coastal Commission (1987
483 U.S. 825 (Nollan) and Dolan v. City of Tigard (1994) 512 U.S. 374 (Dolan).
Those cases hold that in order to satisfy the Fifth Amendment to the United States
Constitution, a dedication requirement must have an ―essential nexus‖ to the valid
public purpose that would be served by denying the development permit outright
and must be ―rough[ly] proportion[al]‖ to ―the impact of the proposed
development‖ at issue. (Dolan, supra, 512 U.S. at pp. 390, 391; Nollan, supra,
483 U.S. at p. 837.) The Court of Appeal agreed with the trial court on the
applicability of Porterville but held that the legality of the dedication requirement
under Nollan and Dolan should have been decided by a jury, not a judge. For this
reason, and because of certain evidentiary errors, the Court of Appeal sent the case
back to the trial court to revisit the legality of the dedication requirement under
Nollan and Dolan.
We granted review on two questions: First, is the constitutionality of a
reasonably probable dedication requirement under Nollan and Dolan a question
that must be resolved by a jury pursuant to article I, section 19 of the California
Constitution? Second, was the City‘s dedication requirement a ―project effect‖
that must be ignored in determining just compensation for the taking under Code
of Civil Procedure section 1263.330?
As to the first question, we hold that the essential nexus and rough
proportionality inquiries under Nollan and Dolan are properly decided by a court,
not by a jury. Our precedent holds that article I, section 19 of the California
Constitution, which governs eminent domain, requires only factually intensive
questions directly related to compensation to be submitted to a jury. (See
Metropolitan Water District of So. California v. Campus Crusade for Christ, Inc.
(2007) 41 Cal.4th 954, 971–973 (Campus Crusade).) Because the Nollan and
Dolan issues are mixed questions of law and fact in which the legal issues
predominate, and because the constitutionality of a dedication requirement is
analytically prior to any factual dispute as to whether the condemner would
actually impose the requirement, the questions belong to the court.
As to the second question, we hold that the project effect rule generally
applies, and Porterville does not apply, to situations where it was probable at the
time the dedication requirement was put in place that the property designated for
public use was to be included in the project for which the property is being
condemned. The applicability of the project effect rule thus turns on a preliminary
factual question to be decided by the court. Because the trial court believed the
project effect rule was categorically inapplicable in this situation, it made no
factual findings bearing on the rule‘s applicability. Such findings may be made on
In 1985, defendants (the Owners) purchased the property at issue (the
Property), a rectangular plot measuring approximately 9.12 acres located north of
Ramona Expressway and south of Markham Street. The Property is zoned to
allow light industrial development. The Owners originally purchased the Property
for their metal fabricating businesses, but the Property remained undeveloped at
the time this suit was filed.
This controversy concerns a 1.66-acre strip of land that the City sought to
condemn in 2009 in order to complete construction of a portion of Indian Avenue,
a secondary arterial street designed to channel truck traffic toward Harley Knox
Boulevard en route to Interstate 215. This strip, which arcs through the Property,
comprises roughly 20 percent of the Property and splits the remainder into two
roughly triangular parcels — one is 5.5 acres, the other is 2.0 acres — on either
side. A map showing the Property and the 1.66-acre strip at issue appears in an
appendix to this opinion.
For many years, the City was a predominantly agricultural community, but
it has recently experienced significant growth and has developed a more diverse
economy. Historically, Indian Avenue was an undeveloped right of way that ran
north-south in a straight alignment and did not abut the Property. But in 1999, the
City amended its general plan and circulation element by passing resolution No.
2756, which rerouted the Indian Avenue right of way south of Ramona
Expressway (the southern realignment) so that it would no longer run straight but
would instead curve to the northeast before intersecting Ramona Expressway. A
circulation element is a required component of a municipality‘s general plan and
consists of ―the general location and extent of existing and proposed major
thoroughfares, transportation routes, terminals, any military airports and ports, and
other local public utilities and facilities, all correlated with the land use element of
the plan.‖ (Gov. Code, § 65302, subd. (b)(1).
The catalyst for the southern realignment of Indian Avenue was the
building of a large distribution center by Lowe‘s Companies, Inc. (Lowe‘s), south
of Ramona Expressway. In order to develop a site big enough to accommodate its
distribution center, Lowe‘s asked the City to realign Indian Avenue around to the
east of the original Indian Avenue right of way south of Ramona Expressway.
The City agreed to vacate its original Indian Avenue right of way south of Ramona
Expressway, and in return, Lowe‘s agreed to dedicate to the City the property
needed for the southern realignment of Indian Avenue.
Indian Avenue was then partially developed as a road for carrying truck
traffic south of Ramona Expressway. At the time of this lawsuit, Indian Avenue
remained undeveloped north of Ramona Expressway, where the Property is
located. This meant that Indian Avenue ended as it met Ramona Expressway,
forming a T-junction.
In 2005, the City passed resolution No. 3430, which adopted an updated
circulation element that outlined a number of changes to the future roadway
network throughout the City in order to facilitate growth over the next 25 years.
As part of the amended circulation element, the Indian Avenue right of way was
realigned north of Ramona Expressway (the northern realignment), mirroring the
road‘s curved alignment to the south. Once its northern portion was developed,
Indian Avenue would become a continuous, bell-shaped street that would curve to
the northeast at the Lowe‘s distribution center, cross Ramona Expressway, and
then curve to the northwest to reconnect with its original north-south alignment at
its intersection with Markham Street.
The City conducted studies to determine the ideal path for the northern
realignment of Indian Avenue. The City Engineer testified that the objective was
to find the ―shortest, safest[,] and most logical alignment‖ for Indian Avenue while
minimizing injury to property owners. The City chose an alignment that would
utilize the 1.66-acre strip of the Property as well as portions of several other
properties that the City eventually acquired by donation or purchase.
On October 14, 2008, the City wrote a letter to the Owners, pursuant to
Government Code section 7267.2, offering to buy the 1.66-acre strip for $54,400.
On January 9, 2009, the City made a revised offer of $54,800. The Owners did
not accept either offer.
On February 19, 2009, the City notified the Owners that a City Council
meeting would be held on March 10, 2009, to consider a resolution to acquire the
property via condemnation. The resolution said: ―The Project will improve traffic
flow and ease congestion through the Project Area.‖ In addition, the project ―will
improve traffic safety, provide a means of access to the properties located adjacent
to the Project, and will provide an identity to this revitalized area and enhance
property values.‖ The City Engineer who advised the City Council on the
resolution further explained in a declaration that ―[t]he Indian Avenue right of
way, which is currently unimproved between Ramona Expressway and Harley
Knox Boulevard . . . must be developed to accommodate the increased traffic flow
and public safety issue[s] due to the lack of turnways and increased congestion in
the immediate area.‖ Traffic in that area had increased due to ―the business parks
and industrial complexes that have been completed in the recent year.‖
In addition to the truck traffic generated by the Lowe‘s distribution center,
traffic was expected to increase due to the construction of the Ridge Commerce
Center (Ridge or the Ridge project), which included a 1.9-million-square-foot
warehouse and over 1,200 parking spaces. The City approved the Ridge project
on the condition that its developers would bear the costs of building Indian
Avenue north of Ramona Expressway along the path prescribed by the 2005
amendments to the circulation element. Ridge will therefore bear the costs of any
compensation ultimately awarded to the Owners.
Around the time it approved the Ridge project, the City also created the
North Perris Road and Bridge Benefit District, which requires developers and
businesses in parts of north Perris — parts that include the Property — to
contribute to the expense of building roads in the vicinity. Any commercial
development on the Property would be conditioned on the Owners‘ making
contributions to the benefit district.
The City Council unanimously adopted the resolution condemning the
Property at its March 10, 2009, meeting. This condemnation action was filed
shortly thereafter. While the suit was proceeding, the City took possession of the
1.66-acre strip and began building the northern stretch of Indian Avenue. By
February 2012, while the Court of Appeal‘s decision was pending, Indian Avenue
was completed. The road is now open to the public.
On April 17, 2009, the City filed an eminent domain complaint in the
superior court. Among its pretrial motions, the City sought to have the trial court
rule on two questions that, if answered in the affirmative, would trigger
application of the Porterville doctrine: (1) whether the disputed dedication had an
essential nexus to the Owners‘ projected development of their property and was
roughly proportional to the impacts of that development under Nollan and Dolan,
and (2) whether it was reasonably probable that the City actually would have
imposed such a dedication requirement as a matter of fact. The trial court held
that it could decide both questions and, after a bench trial, determined that the
dedication requirement was both constitutional and reasonably probable.
As to the issue of just compensation, the Owners filed a motion arguing that
the City should be prohibited from introducing evidence that it would have
required the 1.66-acre strip to be dedicated before granting the Owners a permit to
undertake light industrial activities on the Property. According to the Owners, this
evidence violated the project effect rule of Code of Civil Procedure section
1263.330. (All undesignated statutory references are to this code unless otherwise
specified.) The trial court denied the motion. The upshot was that a jury would
have had to value the 1.66-acre strip based on its agricultural (that is,
undeveloped) use. Because the Owners had not prepared testimony regarding the
agricultural value of the Property, they stipulated that the value of the 1.66-acre
strip was $44,000.00, as suggested by the City‘s appraiser. On February 23, 2011,
the trial court entered judgment in the amount of $44,000.
The Court of Appeal reversed in part and affirmed in part. First, relying on
our decision in Campus Crusade, supra, 41 Cal.4th 954, the Court of Appeal
concluded that the trial court had impermissibly ―usurped the role of the jury‖ by
deciding the Nollan and Dolan issues, and by deciding whether there was a
reasonable probability that the City would have actually imposed the dedication.
The Court of Appeal ordered that on remand, the questions of whether the
dedication requirement would have been reasonably probable and whether it was
constitutional should be submitted to a jury.
Next, the Court of Appeal held that the trial court had erred in applying
Nollan and Dolan by considering evidence that the City might have agreed to pay
the Owners additional compensation at a later date if the Owners proposed a low-
impact development on the Property. Neither party has asked us to review that
The Court of Appeal went on to agree with the trial court that the project
effect rule does not apply in this case, explaining that the City generally requires
all landowners to dedicate rights of way that are shown on the City‘s circulation
element before granting them permission to develop their property. (See Perris
Mun. Code, §§ 18.08.040, 18.24.020.) Therefore, the Court of Appeal held, the
trial court was correct that evidence of the City‘s dedication requirement was
admissible on the issue of just compensation.
Finally, the Court of Appeal held that the trial court erred in permitting two
of the City‘s witnesses who were not designated as experts — the City Manager,
Richard Belmudez, and the City Engineer, Habib Motlagh — to offer expert
testimony relevant to the Nollan and Dolan issues. The Court of Appeal remanded
for a new hearing.
We granted review to resolve one of the issues raised by the City‘s petition
for review: whether the constitutionality of a dedication requirement under Nollan
and Dolan must be resolved by the court or by a jury under article I, section 19 of
the California Constitution. We also agreed to review one of the issues raised in
the Owners‘ answer to the City‘s petition: whether the dedication requirement
was a project effect that must be ignored in determining just compensation under
At the core of this dispute is the City‘s claim that it would have required the
Owners to dedicate — i.e., relinquish without compensation — portions of the
Property to the City for road construction, in accordance with the 2005 circulation
element, if the Owners had ever sought to develop the Property for light industrial
use. Although the Property is zoned for such use, it is undisputed that the Owners
could not take advantage of that zoning status without first acquiring a permit
from the City. The Owners seek $1.3 million in compensation for the 1.66-acre
strip, a value based on the Property being put to its highest and best use. But the
City contends that such an amount would provide a major windfall for the Owners
because they could never have put the 1.66-acre strip to light industrial use. Such
use of the Property, according to the City, would have been premised on the
Owners‘ giving the 1.66-acre strip to the City for free.
We begin with a review of the background law. The Court of Appeal
ordered a new hearing on the Nollan and Dolan questions in light of its findings of
evidentiary error, and we did not grant review to decide the constitutionality of the
City‘s dedication requirement. Nevertheless, the high court‘s takings
jurisprudence informs both of the issues on which we granted review, and it
provides a useful starting point for understanding the Porterville doctrine and the
protections that landowners have in this context.
The takings clause of the Fifth Amendment prohibits a governmental entity
from taking private property for public use without just compensation. In
construing this prohibition, the high court has held that governmental entities may
impose conditions that limit landowners‘ use of their property so long as the
conditions do not cause a ―permanent physical invasion‖ or ―completely deprive
an owner of ‗all economically beneficial us[e]‘ of her property.‖ (Lingle v.
Chevron U.S.A. Inc. (2005) 544 U.S. 528, 538 (Lingle), citing Loretto v.
Teleprompter Manhattan CATV Corp. (1982) 458 U.S. 419 and Lucas v. South
Carolina Coastal Council (1992) 505 U.S. 1003, 1019.
When a governmental entity demands that a landowner dedicate a portion
of his or her property as a condition of granting a permit to develop the property,
there is a ―heightened risk that the purpose [of the dedication requirement] is
avoidance of the compensation requirement, rather than the stated police-power
objective.‖ (Nollan, supra, 483 U.S. at p. 841.) ―Under the well-settled doctrine
of ‗unconstitutional conditions,‘ the government may not require a person to give
up a constitutional right — here the right to receive just compensation when
property is taken for a public use — in exchange for a discretionary benefit
conferred by the government where the benefit sought has little or no relationship
to the property.‖ (Dolan, supra, 512 U.S. at p. 385.) For this reason, the high
court in Nollan held that the constitutionality of a dedication requirement turns on
whether there is an ―essential nexus‖ between the dedication and the public
purpose that would otherwise be served by denying the permit outright. (Nollan,
at p. 837; see Lingle, supra, 544 U.S. at p. 547; Dolan, at p. 386.
Building on Nollan, the high court in Dolan held that a dedication, in order
to satisfy the Fifth Amendment, must have not only an essential nexus to the
public purpose that would be served by denying the permit, but also ― ‗rough
proportionality‘ ‖ to that public purpose. (Dolan, supra, 512 U.S. at p. 391; see
Lingle, supra, 544 U.S. at p. 547.) ―No precise mathematical calculation is
required, but the city must make some sort of individualized determination that the
required dedication is related both in nature and extent to the impact of the
proposed development.‖ (Dolan, at p. 391.) The high court further observed that
―[d]edications for streets, sidewalks, and other public ways are generally
reasonable exactions to avoid excessive congestion from a proposed property use.‖
(Id. at p. 395.) In Dolan itself, however, the city had not met its burden of
demonstrating the need for such a dedication because it had simply asserted that
the dedication requested ― ‗ ―could offset some of the traffic demand‖ ‘ ‖
generated by the landowner‘s proposed development. (Ibid.) This was ― ‗ ―a far
cry from a finding that the bicycle pathway system will, or is likely to, offset some
of the traffic demand.‖ ‘ ‖ (Ibid.
We have described the requirements of Nollan and Dolan as follows:
―Where the local permit authority seeks to justify a given exaction as an
alternative to denying a proposed use, Nollan requires a reviewing court to
scrutinize the instrumental efficacy of the permit condition in order to determine
whether it logically furthers the same regulatory goal as would outright denial of a
development permit. A court must also, under the standard formulated in Dolan,
determine whether the factual findings made by the permitting body support the
condition as one that is more or less proportional, in both nature and scope, to the
public impact of the proposed development.‖ (Ehrlich v. City of Culver City
(1996) 12 Cal.4th 854, 868 (plur. opn. of Arabian, J.); see id. at p. 912 (conc. &
dis. opn. of Werdegar, J.).
Nollan and Dolan announce ―a type of intermediate scrutiny‖ of dedication
requirements. (Santa Monica Beach, Ltd. v. Superior Court (1999) 19 Cal.4th
952, 966; id. at pp. 965–967.) When a court applies this intermediate scrutiny,
―[t]he proper inquiry is not into the subjective motive of the government agency,
but whether there is, objectively, sufficient connection between [the dedication
requirement]‖ and the public purpose that would be served by denying the
development permit. (Landgate, Inc. v. California Coastal Com. (1998) 17
Cal.4th 1006, 1022 (Landgate).) ―This type of objective inquiry is consistent with
the principle that courts do not delve into the individual purposes of
decisionmakers in a quasi-adjudicative proceeding, but rather look to the findings
made by the governmental agency and determine whether these are based on
substantial evidence.‖ (Ibid.
Turning now to the case before us, we begin with the issue raised by the
City: whether the essential nexus and rough proportionality inquiries under
Nollan and Dolan must be submitted to a jury.
The Seventh Amendment to the United States Constitution does not
guarantee landowners a jury trial in eminent domain proceedings because no such
jury right existed in England or the colonies in 1791. (See United States v.
Reynolds (1970) 397 U.S. 14, 18 (Reynolds).) California‘s original 1849
Constitution did not guarantee a jury right in eminent domain proceedings for
similar reasons. (See Koppikus v. State Capitol Commissioners (1860) 16 Cal.
248, 253–254.) But the 1879 drafters of our Constitution amended the original
document‘s takings clause ―in reaction to . . . private railroad companies‘
speculative computation of benefits‖ in eminent domain cases. (Los Angeles
County Metropolitan Transportation Authority v. Continental Development Corp.
(1997) 16 Cal.4th 694, 705 (Continental Development).) The revised takings
clause, which now appears in article I, section 19, says in relevant part: ―Private
property may be taken or damaged for a public use and 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, subd. (a).) Our Constitution thus
guarantees landowners the right to have a jury determine the amount of just
compensation owed for a taking.
We have long held that this jury right applies only to determining the
appropriate amount of compensation, not to any other issues that arise in the
course of condemnation proceedings. ― ‗[A]ll issues except the sole issue relating
to compensation are to be tried by the court,‘ including, ‗except those relating to
compensation, the issues of fact.‘ ‖ (Campus Crusade, supra, 41 Cal.4th at p. 971;
see Hensler v. City of Glendale (1994) 8 Cal.4th 1, 15 (Hensler); People v.
Ricciardi (1943) 23 Cal.2d 390, 402; Vallejo & Northern R. R. Co. v. Reed
Orchard Co. (1915) 169 Cal. 545, 556.) ― ‗ ―It is only the ‗compensation,‘ the
‗award,‘ which our constitution declares shall be found and fixed by a jury. All
other questions of fact, or of mixed fact and law, are to be tried, as in many other
jurisdictions they are tried, without reference to a jury.‖ ‘ ‖ (Campus Crusade, at
p. 971, italics added.
Thus, legal questions that affect the type of compensation to which a
landowner is entitled in a condemnation action must be decided by the court. ―For
example, we have held that what constitutes the larger parcel (for purposes of
determining severance damages) ‗is essentially a question of law for the
determination of the court‘ (Oakland v. Pacific Coast Lumber and Mill Co. (1915
171 Cal. 392, 397); whether separate parcels may be aggregated and considered as
one larger parcel is ‗an issue of law to be decided by the trial court‘ (City of San
Diego v. Neumann [(1993)] 6 Cal.4th [738,] 757); and whether a taking has
substantially impaired access to the remaining property is ‗a matter of law‘ for the
court (Breidert v. Southern Pac. Co. (1964) 61 Cal.2d 659, 664). Similarly, it is
for the trial court to decide whether a party had acquired an avigation easement
over a neighboring property that was condemned (Pacific Gas & E. Co. v.
Peterson (1969) 270 Cal.App.2d 434, 438) and, more generally, to determine
whether a party had a cognizable legal interest in the condemned property.
(County of San Diego v. Miller (1980) 102 Cal.App.3d 424, 433.)‖ (Campus
Crusade, supra, 41 Cal.4th at p. 971.
Such questions belong to the trial court even when answering them may
require the court to examine factual circumstances — i.e., when the legal question
is really a ―mixed issue of law and fact where the legal issues predominate.‖
(Campus Crusade, supra, 41 Cal.4th at p. 973; see Emeryville Redevelopment
Agency v. Harcros Pigments, Inc. (2002) 101 Cal.App.4th 1083, 1117 (Emeryville
Redevelopment).) For example, this court in Neumann had to determine as a
matter of law whether several parcels the City of San Diego sought to take from
the landowners should be aggregated. The trial court was required to determine
and weigh several facts bearing on whether the landowners‘ intended use of the
aggregated larger parcel was reasonably probable in the near future, ―includ[ing],
among other things, evidence of the existing uses of the property, the time and
expense necessary for their termination, the physical adaptability of the property
for use as an integrated whole, the existing and the proposed zoning applicable to
the several parcels in question, local market conditions, the local regulatory
climate, and the property owner‘s plans for development.‖ (City of San Diego v.
Neumann, supra, 6 Cal.4th at p. 757.) Although these were ―indeed factual
issues,‖ the ultimate question ―whether, taken as a whole, they support a finding
that a larger parcel exists remained an issue of law to be decided by the trial
Similarly, whether access to a property has been ―substantially impaired‖
for purposes of determining severance damages is a question for the court, even
though ―[s]ubstantial impairment cannot be fixed by abstract definition; it must be
found in each case upon the basis of the factual situation.‖ (Breidert v. Southern
Pac. Co., supra, 61 Cal.2d at p. 664.) In addition, whether a condemner‘s
precondemnation conduct is ―unreasonable‖ and thus triggers precondemnation
liability has repeatedly been held to be a question for the court despite the factual
aspects of such an inquiry. (See Redevelopment Agency v. Contra Costa Theatre,
Inc. (1982) 135 Cal.App.3d 73, 79.) And whether a landowner is entitled to
damages for loss of goodwill is a question for the court even though it requires a
determination of whether a particular loss of goodwill is compensable within the
meaning of section 1263.510, subdivision (a). (See Emeryville Redevelopment,
supra, 101 Cal.App.4th at pp. 1116–1117.
By contrast, Campus Crusade held that two pure questions of fact directly
pertaining to the proper amount of compensation were reserved to the jury. First,
we said that whether it is reasonably probable a city would change the zoning
status of the landowners‘ property in the near future was a jury question. (Campus
Crusade, supra, 41 Cal.4th at pp. 966–967.) Second, because the landowner had
introduced credible evidence that the remaining portion of its property would be
worth less after the proposed taking due to hazards associated with a pipeline the
government proposed to install on the property, the extent of the resulting
severance damages was a jury question. (Id. at pp. 972–973.
Applying Campus Crusade, the Court of Appeal below held that a jury, not
the trial court, should have decided whether it is reasonably probable that the City
would have actually attempted to impose the dedication requirement on the
Owners had they sought to develop the Property for light industrial use. But the
Court of Appeal also held that the trial court had ―usurped the role of the jury‖ by
deciding the Nollan and Dolan issues. We conclude, contrary to the Court of
Appeal, that the Nollan and Dolan issues are for the court, not a jury, to decide
because they are mixed questions of law and fact in which the legal issues
predominate. Further, they are questions that must be resolved before a
condemner is entitled to even argue that, as a matter of fact, it would have actually
imposed the disputed dedication requirement.
Whether a dedication requirement meets the essential nexus and rough
proportionality tests is a matter of means-ends scrutiny familiar to constitutional
adjudication. This inquiry requires a court to evaluate whether a legislative or
quasi-adjudicative body has made sincere and reasoned planning decisions, and to
balance landowners‘ ―vulnerab[ility] to the type of coercion that the
unconstitutional conditions doctrine prohibits‖ (Koontz v. St. John’s River Water
Management (2013) 570 U.S. __, __ [133 S.Ct. 2586, 2595]) against the reality
―that many proposed land uses threaten to impose costs on the public that
dedications of property can offset.‖ (Id. at p. __ [133 S.Ct. at p. 2595].) Juries are
not well equipped to decide such fundamental questions about the limits of
lawmaking power. Indeed, juries are no better equipped to make such
determinations than they are to determine whether economic legislation ―rests
upon some rational basis‖ (United States v. Carolene Products Co. (1938) 304
U.S. 144, 152), whether a state law that impedes the flow of interstate commerce
―is clearly excessive in relation to the putative local benefits‖ (Pike v. Bruce
Church, Inc. (1970) 397 U.S. 137, 142), or whether an infringement on a
fundamental liberty interest, a legislative policy based on a suspect classification,
or a content-based restriction on protected speech ―is narrowly tailored to serve a
compelling state interest‖ (Reno v. Flores (1993) 507 U.S. 292, 302; see Grutter v.
Bollinger (2003) 539 U.S. 306, 326; Reno v. American Civil Liberties Union
(1997) 521 U.S. 844, 879).
Although the Nollan and Dolan inquiries often require the trial judge to
find certain facts, the court‘s primary task is to apply the law to known facts. In
most cases, there is no need to weigh conflicting evidence because the crux of the
inquiry is whether ―the findings made by the government agency . . . are based on
substantial evidence.‖ (Landgate, supra, 17 Cal.4th at p. 1022; see Dolan, supra,
512 U.S. at p. 391 [―the city must make some sort of individualized determination
that the required dedication is related both in nature and extent to the impact of the
proposed development‖].) In other words, a court typically need only determine
whether the condemner has done its constitutionally required homework.
It is true that when a condemner invokes Porterville, the Nollan and Dolan
inquiries may affect the amount of compensation to which a landowner is entitled
insofar as Porterville has no applicability where a dedication requirement does not
meet constitutional standards. In other words, if a dedication would be
unconstitutional if actually imposed, the landowner is entitled to compensation
based on the property‘s highest and best use, not on its unimproved state, and
evidence of the dedication would not be admissible on the issue of just
compensation. But all of the legal questions or mixed questions of fact and law
discussed above similarly affect the landowner‘s compensation by permitting the
jury to consider or preventing it from considering certain types of recovery. Those
questions are nonetheless reserved to the court because of their legal character and
because they are questions that frame the ultimate factual inquiry into the amount
of compensation owed. (See Campus Crusade, supra, 41 Cal.4th at pp. 972–973.
The Nollan and Dolan inquiries are analytically prior questions that must be
answered in order to determine whether a dedication requirement would be a
lawful taking if actually imposed as a condition of developing the property. In
other procedural contexts, such as an inverse condemnation action, the court
would undoubtedly decide such a question. (See San Diego Gas & Electric Co. v.
Superior Court (1996) 13 Cal.4th 893, 951 [―There is no right to jury trial on the
issue whether there has been a taking in the first instance.‖]; see Hensler, supra, 8
Cal.4th at p. 15; Dina v. People ex rel. Department of Transportation (2007) 151
Cal.App.4th 1029, 1044–1045.) Neither article I, section 19 of the California
Constitution nor Campus Crusade requires a different rule here simply because the
Nollan and Dolan issues arise by way of the Porterville doctrine instead of a direct
challenge to the dedication requirement.
Relying on the Court of Appeal decision in City of Hollister v. McCullough
(1994) 26 Cal.App.4th 289 (Hollister), the Owners contend that the Nollan and
Dolan issues are for a jury to decide because they are ―a sub-issue within the
larger issue of determining the reasonable probability of a dedication
requirement.‖ (See Hollister, at p. 297 [―[P]roof that a conditional dedication is a
‗reasonable probability‘ requires a showing not only that plaintiff would probably
have imposed the dedication condition if defendants had sought to develop the
property, but also that the proposed dedication requirement would have been
constitutionally permissible. This is so because it is not a ‗reasonable probability‘
that a governmental entity would actually succeed in imposing an unconstitutional
dedication requirement.‖].) But the constitutionality of a dedication requirement is
not part of the reasonable probability determination, for it is incorrect to say there
is no reasonable probability that a condemner would ever succeed in imposing an
unconstitutional dedication. The condemner would succeed, for example, if the
constitutional dedication were left unchallenged. The constitutionality of the
dedication is a separate question and must be separately considered. On this
limited point, we disapprove City of Hollister v. McCullough, supra, 26
Cal.App.4th 289, 297, although we agree with Hollister‘s main premise that a city
may not rely on Porterville if the dedication it claims it would have imposed is
unconstitutional under Nollan and Dolan.
Finally, the Owners rely on several federal cases to show that a jury must
resolve the Nollan and Dolan issues. Those cases are of limited relevance because
a landowner‘s right to a jury in a condemnation case is a question of state
constitutional law. (See Reynolds, supra, 397 U.S. at p. 18.) In any event, the
substance of those cases does not support the Owners‘ position.
First, the Owners rely on City of Monterey v. Del Monte Dunes (1999) 526
U.S. 687, which held that a trial court in a civil rights suit brought under section
1983 of title 42 of the United States Code (section 1983) had properly permitted a
jury to consider whether a city‘s repeated denials of a developer‘s request for a
permit amounted to a regulatory taking. But that holding was based on the
Seventh Amendment right to a jury in section 1983 suits; the high court made
clear it was not addressing the role of a jury in an ordinary condemnation or
inverse condemnation suit not brought pursuant to section 1983. (See Del Monte
Dunes, at pp. 711–712, 721.) Moreover, the landowners in Del Monte Dunes did
not argue that the city‘s zoning laws amounted to a regulatory taking; they argued
that the city had effected a taking by not following its zoning laws. (Id. at p. 722.
Thus, the high court ―d[id] not address the proper trial allocation of the various
questions that might arise‖ where, as here, it is alleged that ―the city‘s general
regulations were unreasonable as applied to [the landowners‘] property.‖ (Ibid.
Next, the Owners cite Skoro v. City of Portland (D.Or. 2008) 544
F.Supp.2d 1128, a condemnation action in which the court allowed the jury to
determine the essential nexus inquiry under Nollan with respect to one of the
contested dedications. (Id. at p. 1137.) But Skoro‘s holding on this point was
simply a denial of summary judgment; the court did not consider whether Nollan‘s
essential nexus inquiry was, as a rule, appropriate for a jury to decide.
Finally, the Owners cite a string of section 1983 cases in which juries have
been permitted to address factually intensive mixed questions of fact and
constitutional law. But those cases had nothing to do with takings and did not
involve applying judicial scrutiny to the acts of a legislative or quasi-adjudicative
In sum, we hold that in a condemnation action, the constitutionality of a
dedication requirement under Nollan and Dolan is a question to be decided by a
court, not a jury. This question is analytically distinct from, and prior to, the
factual determination of whether it is reasonably probable that the condemner
would actually impose the dedication as a condition of permitting development of
the property at issue.
We now consider the Owners‘ contention that even if the City‘s dedication
requirement is lawful and its imposition is reasonably probable, the project effect
rule of section 1263.330 bars the City from introducing evidence of the dedication
requirement at a trial on just compensation. In addressing this claim, we begin
with further explanation of the law concerning just compensation when a city
condemns property that is subject to a lawful dedication requirement.
The measure of compensation in a condemnation case ―is the fair market
value of the property taken.‖ (Code Civ. Proc., § 1263.310.) ―The fair market
value of the property taken is the highest price on the date of valuation that would
be agreed to by a seller, being willing to sell but under no particular or urgent
necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and
able to buy but under no particular necessity for so doing, each dealing with the
other with full knowledge of all the uses and purposes for which the property is
reasonably adaptable and available.‖ (Id., § 1263.320, subd. (a).) ―A jury should
consider all those factors, including lawful legislative and administrative
restrictions on property, which a buyer would take into consideration in arriving at
the fair market value.‖ (People ex rel. State Public Works Board v. Talleur (1978
79 Cal.App.3d 690, 695–696 (Talleur).
Applying these principles, the Court of Appeal in Porterville held that
when a city would lawfully have conditioned development of property upon the
owner‘s dedication of a portion of the property, the fair market value of that
portion in a subsequent condemnation action is its value in its undeveloped,
agricultural state. (See Porterville, supra, 195 Cal.App.3d at pp. 1267–1269.
Although this rule is conventionally called the Porterville doctrine, its origins
predate the Porterville case. (See City of Fresno v. Cloud (1972) 26 Cal.App.3d
113, 123 (City of Fresno); People ex rel. Department of Public Works v. Investors
Diversified Services, Inc. (1968) 262 Cal.App.2d 367, 374, 376 (Investors
Diversified).) For almost five decades, courts have applied the doctrine to
determine the fair market value of dedicated property where the dedication serves
to facilitate road construction to offset the impact of developing the rest of the
property. (See State Route 4 Bypass Authority v. Superior Court (2007) 153
Cal.App.4th 1546, 1551–1552 (State Route 4); Hollister, supra, 26 Cal.App.4th at
p. 297; Porterville, at p. 1269; City of Fresno, at pp. 119–120; Investors
Diversified, at pp. 372–373.
The rationale for this rule is that there is no way the owner could put the
dedicated portion to use in a developed state: ―[I]f the remainder of the parcel is
not developed beyond its present agricultural use, [the] owner will have been paid
exactly what the take was worth; if the remainder of the parcel is developed for
commercial purposes, [the] owner will have been paid for the land he would have
been required to dedicate to [the] city to obtain the building permits or conditional
use permit necessary for the commercial development.‖ (Porterville, supra, 195
Cal.App.3d at p. 1269.) In other words, because the owner faces a choice of either
giving the dedicated portion to the government for free or using that portion in its
undeveloped state, the most that a willing buyer would pay for the portion subject
to the dedication requirement is its value in its undeveloped state. If the owner
were compensated based on the highest and best use of the property, the owner
would get a windfall — i.e., payment based on developed value for property that
could not have been developed under any circumstances. Such a result would be
at odds with the Fifth Amendment principle that ―[t]he owner is to be put in as
good position pecuniarily as he would have occupied if his property had not been
taken.‖ (United States v. Miller (1943) 317 U.S. 369, 373; see Continental
Development, supra, 16 Cal.4th at p. 704.
As noted, the applicability of Porterville is predicated on two inquiries.
First, the dedication requirement must be constitutional under Nollan and Dolan.
Second, there must be ―a reasonable probability that development of the property
would have been conditioned on dedication of the property taken.‖ (Hollister,
supra, 26 Cal.App.4th at p. 297; see State Route 4, supra, 153 Cal.App.4th at
p. 1551; Contra Costa County Flood Control and Water Conservation Dist. v.
Lone Tree Investments (1992) 7 Cal.App.4th 930, 936 (Contra Costa Flood
Control); Porterville, supra, 195 Cal.App.3d at pp. 1268–1269; City of Fresno,
supra, 26 Cal.App.3d at pp. 120–121.) In other words, it must be reasonably
probable that the condemner would actually impose the dedication requirement as
a condition of development.
Neither the Owners nor their amici curiae suggest that Porterville should be
discarded. The Owners acknowledge that a finder of fact may consider certain
types of dedication requirements when valuing land in condemnation proceedings.
In their briefing, they argue that ―typical dedications‖ ―placed on all similarly
situated properties based on long-established plans‖ are admissible in determining
just compensation, while ―a unique [dedication] requirement growing out of the
agency‘s project‖ is not.
The Owners and their amici curiae contend, however, that it is improper to
apply Porterville on the particular facts here. They claim that the City‘s 2005
decision to realign Indian Avenue in its revision of the City‘s circulation element,
which gave rise to the requirement that the Owners dedicate a portion of the
Property to the City as a condition of light industrial development, was part of the
―project‖ at issue here. Thus, they argue, the project effect rule requires the
exclusion of any evidence regarding the City‘s dedication requirement in
determining just compensation.
The project effect rule is codified in section 1263.330, which states in
pertinent part: ―The fair market value of the property taken shall not include any
increase or decrease in the value of the property that is attributable to any of the
following: [¶] (a) The project for which the property is taken. [¶] . . . [¶] (c) Any
preliminary actions of the plaintiff relating to the taking of the property.‖ The rule
serves to prevent the amount of compensation owed for a taking from being
altered by the project served by the taking or by any government action that affects
the value of an intended taking. As the Owners explain, if the government is
condemning property to build a reservoir, it need not pay lakefront prices for the
property. And if the government is condemning property to build a sewage plant,
it does not get a discount because its project renders the property less desirable.
The California Law Revision Commission Report‘s comment on section
1263.330, subdivision (a) makes clear that it was intended to incorporate the rule
in Merced Irrigation District v. Woolstenhulme (1971) 4 Cal.3d 478
(Woolstenhulme). (Recommendation Proposing the Eminent Domain Law (Dec.
1974) 12 Cal. Law Revision Com. Rep., pp. 1833–1834 (Law Revision
Commission Report).) In Woolstenhulme, a plan to increase and stabilize the size
of a lake and to develop recreational facilities led to a rise in the value of land near
the lake. By 1963, the public became aware of the plan, and land values began to
rise. In 1965, it became probable that the defendant‘s property would be taken for
the lake improvement. In 1967, the irrigation district sought to condemn the
We reaffirmed in Woolstenhulme that a property owner whose property is
condemned will not be compensated for any increase in value due to speculation
that the property will be taken in order to facilitate development of a proposed
project. (Woolstenhulme, supra, 4 Cal.3d at pp. 490–492.) On the other hand, a
property owner can be compensated for increases in valuation that result from a
property‘s proximity to a proposed project, up to the point that it becomes
probable the property will be included in the project. (Id. at p. 496.) On that
basis, the court concluded that the defendant should not be compensated for the
increases in value that occurred after 1965. (Id. at pp. 498–499.) Although
Woolstenhulme concerned a limitation on an owner‘s right to have the value of its
property enhanced by probable condemnation, its logic applies equally to limit the
condemner‘s right to capitalize on the diminution of property value after probable
condemnation. (Law Revision Com. Rep., supra, at pp. 1833–1834 [§ 1263.330
was intended to treat enhancements and diminutions in property value the same].
Subdivision (c) of section 1263.330, which concerns ―preliminary actions
by the plaintiff relating to the taking of the property,‖ has a different provenance.
Subdivision (c) was enacted verbatim as proposed by the Law Revision
Commission, which cited Buena Park School District of Orange County v. Metrim
Corp. (1959) 176 Cal.App.2d 255, as the basis for its proposal. (Law Revision
Com. Rep., supra, at pp. 1832, 1835.) In Metrim, the preliminary action at issue
was the filing of a prior condemnation action, which was dismissed a few days
later upon the filing of a second condemnation action. (Metrim, at p. 258.) By
bringing the initial action, the condemner prevented the property owner from filing
a final subdivision map that it otherwise would have filed the next day, with the
result of lowering the property‘s value. (Ibid.) Metrim explained that the
condemner could not benefit from this reduction in property value because it was
attributable to ―steps taken by the condemning authority toward th[e] acquisition
[of the property].‖ (Id. at p. 259.
Cases applying section 1263.330, subdivision (c) have involved municipal
zoning laws explicitly or implicitly enacted for the purpose of suppressing
property values before an intended taking. (See City of San Diego v. Barratt
American, Inc. (2005) 128 Cal.App.4th 917, 937–938; City of San Diego v.
Rancho Penasquitos Partnership (2003) 105 Cal.App.4th 1013, 1030–1040 [city
enacted a zoning ordinance prohibiting development in an area where it
anticipated taking land for a state highway]; see also People ex rel. Department of
Public Works v. Graziadio (1964) 231 Cal.App.2d 525, 529–530 [applying similar
principles before § 1263.330‘s enactment].) Under this line of cases, the
condemner exercises its police power for the purpose of furthering the
condemnation of property, and subdivision (c) mandates that any effect of such
action by the condemner on the value of the property must be discounted.
Just as the date of probable inclusion in a project is important in applying
subdivision (a) of section 1236.330, it is also relevant to applying subdivision (c).
In general, once it becomes probable that a property will be included, the probable
inclusion weighs heavily in favor of the conclusion that subsequent government
action that has the potential of devaluing the property is a ―preliminary action . . .
relating to the taking of property‖ within the meaning of section 1263.330,
This conclusion is consistent with the Porterville doctrine. Courts have
applied that doctrine in cases where a dedication requirement was clearly in place
before the city contemplated a project for which condemnation may be necessary.
In Porterville itself, the city condemned a 12-foot wide strip of land to widen a
street, and testimony established that had the property been developed, the city
would have routinely required developers to dedicate the same strip for the same
purpose. (Porterville, supra, 195 Cal.App.3d 1260, 1263 & fn. 4.) In other cases,
the facts are less clear but could be read as establishing that the public agency
originally contemplated the construction of a public work prompted by, and
contingent on, the development of adjacent property. (See, e.g., Contra Costa
Flood Control, supra, 7 Cal.App.4th 930, 932 [public agency expected to obtain
the needed land for a flood control channel by requiring property owners to
dedicate land as a valid condition of development].
Thus, the Porterville doctrine applies when the evidence establishes that a
dedication requirement reflects an agency original expectation that an
improvement would occur as a result of development of adjacent properties in
order to mitigate the impact of such development. When it later becomes clear
that the properties at issue have to be condemned to undertake the mitigating
improvement, the property is valued in its undeveloped state. (Cf. City of San
Diego v. Rancho Penasquitos Partnership, supra, 105 Cal.App.4th at p. 1034
[evidence showed that ―the City was attempting to prevent development on
properties subject to possible condemnation in order to freeze or depress values‖].
Such dedication requirements are not ―preliminary actions . . . relating to the
taking of property‖ under section 1263.330, subdivision (c) and can legitimately
be considered in the valuation of the property.
Moreover, dedication requirements imposed before inclusion in a project
becomes probable cannot be considered part of ―the project for which the property
is taken‖ pursuant to section 1263.330, subdivision (a). Nothing in the language
or legislative history of subdivision (a) indicates an intent to cover steps taken by a
public agency to mitigate the impact of development, independent of any project.
Of course, dedication requirements to mitigate the impact of anticipated
development must still meet the nexus and rough proportionality tests of Nollan
The situation is different, however, when a dedication requirement is put in
place after it becomes probable that the property subject to the dedication will be
included in a project, and a city subsequently seeks to condemn the property. We
decline to extend the Porterville doctrine to that situation.
Thus, in a condemnation action, when a government entity makes a claim
under Porterville that it would have required a dedication of some or all of the
property being condemned had the property been developed, courts determining
just compensation should look to whether that dedication requirement was put in
place before it was probable that the property would be included in a government
project. Probable inclusion in a government project means that at the time the
dedication requirement was put in place, (1) the government was engaging in a
―project‖ — that is, a public work the government intended to pursue — for which
it intended to acquire property by purchase or condemnation, if necessary, as
opposed to a contingent plan to mitigate possible development on adjacent
property through dedications; and (2) it was probable the property at issue would
be included in that project. Under such circumstances, the project effect rule
applies and the Porterville doctrine does not.
In this case, the northern realignment of Indian Avenue to include the 1.66-
acre strip at issue first appeared in the City‘s 2005 amendment to the circulation
element of its general plan. With that designation came, by operation of the City‘s
ordinance, a requirement to dedicate that strip of land if the larger parcel were
developed. Contrary to suggestions in the Owners‘ brief, this designation of the
strip in the 2005 circulation element did not, in itself, establish that it was probable
in 2005 that the City would condemn that strip. As the cases above imply, when a
public agency designates property for future public use in a planning document, it
may well expect to acquire the property through dedications in response to future
development rather than by purchase or condemnation. A circulation element is a
required component of a city‘s general plan, which in turn is a ―statement of
development policies‖ that sets out a city‘s ―objectives, principles, standards, and
plan proposals.‖ (Gov. Code, § 65302.) A circulation element is an anticipatory
document, subject to amendment and updating (id., §§ 65301.5, 65358), which
provides guidance for future development in light of predicted changes in
population, traffic, and other variables. It is not a map of probable future
condemnations, and the designation of a future roadway on a circulation element
is not necessarily a ―preliminary action . . . related to the taking of property‖
under section 1263.330, subdivision (c). For the same reason, such a designation
is not necessarily part of a ―project for which property is taken‖ under section
1263.330, subdivision (a).
Nevertheless, other evidence may show it is probable that the property will
be included in the project. (See Woolstenhulme, supra, 4 Cal.3d at p. 498
[approving the trial court‘s reliance upon evidence of the timetable of the project
for which the land was condemned to determine the date of probable inclusion
within project]; People ex rel. Department of Water Resources v. Andresen (1987
193 Cal.App.3d 1144, 1154 [testimony regarding the expectations of the parties
based on contemporaneous knowledge].) Relevant evidence in this context
includes not only facts bearing on when the inclusion of the property became
probable, but also the nature and circumstances of the dedication requirement and
other evidence bearing on the reasonable expectations of the parties. Porterville
itself involved a standard frontage dedication requirement imposed on multiple,
similarly situated properties, tending to show that these requirements predated and
were imposed independently of a plan to condemn the property. (Porterville,
supra, 195 Cal.App.3d 1260, 1263 & fn. 4.) Indeed, the Porterville doctrine
originated in the context of standard dedication requirements that would be
triggered by anticipated favorable zoning changes. (City of Fresno, supra, 26
Cal.App.3d at pp. 118–119; Investors Diversified Services, Inc., supra, 262
Cal.App.2d at p. 376; see also Talleur, supra, 79 Cal.App.3d at pp. 696–697 [Cal.
Coastal Act of 1976 predated and was unrelated to condemnation of property].
By contrast, a nonstandard dedication requirement and a record devoid of
an agency‘s imposition of similar requirements may tend to show that the
designation of the property for public use was related to the agency‘s planned
inclusion of the property in an upcoming project. Also, a short period between the
time the property is designated for public use and the time the agency first signals
its intention to condemn the property may support an inference that inclusion was
probable when the dedication requirement was put in place.
Justice Cuéllar takes the view that ―[t]he project effect rule has no
application where the agency can show that the dedication on which it relies was
lawful and would actually have been imposed, independent of the project.‖ (Conc.
& dis. opn. of Cuéllar, J., post, at p. 6.) He would focus the inquiry on ―whether it
is ‗reasonably probable‘ that a public agency would actually have imposed the
dedication as a condition of development even in the absence of the project.‖ (Id.
at p. 7.) But readers may legitimately wonder to what extent this formulation will
yield results that differ from ones reached under the approach we adopt today,
since evidence tending to show that a public agency, at the time of imposing a
dedication, planned to condemn the property for inclusion in the project will also
tend to diminish the inference that the agency would have imposed the dedication
independent of the project. In any event, we see no reason why, under section
1263.330, a dedication requirement cannot sometimes be considered a project
effect. Nor do we see a basis to conclude that the trial court‘s consideration of the
timing and circumstances of the agency‘s imposition of the dedication
requirement, in accordance with the project effect rule, will result in a windfall to
Because the date of a property‘s probable inclusion within a project is a
preliminary factual determination that pertains to the admissibility of evidence
regarding valuation, it is for the trial court rather than the jury to determine.
(Woolstenhulme, supra, 4 Cal.3d at p. 498, fn. 12; see also ante, at pp. 16–17
[preliminary legal questions in condemnation actions, even when factual inquiry is
required, are for the court].) In this case, the parties do not appear to agree on
when it became probable that the 1.66-acre strip would be included in the Indian
Avenue northern alignment project, but the trial court did not make any finding on
this issue because it believed the project effect rule did not apply at all.
Accordingly, we remand to the trial court to determine whether inclusion of
the property at issue in the project for which the property was ultimately
condemned was probable in 2005, when the designation of the property first
appeared in the circulation element as part of the northern alignment of Indian
Avenue and a dedication requirement was put in place. The trial court is also
directed to reconsider whether the required dedication of the 1.66-acre strip passes
muster under Nollan and Dolan in light of the errors in its inquiry identified by the
Court of Appeal, which the City does not contest. The trial court in its sound
discretion may begin with either the project effect inquiry or the Nollan/Dolan
inquiry, and then engage the second inquiry only if the first does not resolve the
case. If the court does undertake the Nollan/Dolan inquiry, it must determine
whether the City has shown that the dedication at issue, a strip comprising almost
20 percent of the property running through its middle, would have an essential
nexus to a valid public purpose that would be served by denying the permit and
would be roughly proportional to the impact of any future development.
We hold, contrary to the Court of Appeal below, that the constitutionality
of a dedication requirement under Nollan and Dolan is a question for a court, not a
jury. We further hold that the project effect rule generally applies, and the
Porterville doctrine does not apply, when it is probable at the time a dedication
requirement is put in place that the property subject to the dedication will be
included in the project for which the condemnation is sought. We remand this
case to the Court of Appeal with instructions to remand to the trial court for
proceedings not inconsistent with this opinion.
CANTIL-SAKAUYE, C. J.
CONCURRING AND DISSENTING OPINION BY CUÉLLAR, J.
Neither the federal nor the state Constitution bars the government from
taking private property to further a legitimate public purpose, so long as the
property owner receives just compensation. (U.S. Const., 5th Amend.; Cal.
Const., art. I, § 19, subd. (a).) At issue in this case are the rules for calculating
precisely what compensation is just.
Under California law, the proper measure of compensation when the
government takes private property ―is the fair market value of the property taken.‖
(Code Civ. Proc., § 1263.310.) The fair market value, in turn, reflects the price
that an informed but disinterested buyer would negotiate with a similarly
positioned seller on the date of valuation, each with full knowledge of the
property‘s highest and best use. (Id., § 1263.320, subd. (a); see City of San Diego
v. Neumann (1993) 6 Cal.4th 738, 744.) The knowledge imputed to the parties in
this hypothetical negotiation consists of ― ‗all the facts which would naturally
affect [the property‘s] value‘ ‖ and ― ‗which enter into the value of the land in the
public and general estimation, and tend to influence the minds of sellers and
buyers.‘ ‖ (Merced Irrigation Dist. v. Woolstenhulme (1971) 4 Cal.3d 478, 493
(Woolstenhulme), italics added.) Crucially, this knowledge would encompass, as
the majority readily acknowledges, ― ‗lawful legislative and administrative
restrictions on property, which a buyer would take into consideration in arriving at
the fair market value.‘ ‖ (Maj. opn., ante, at p. 20, quoting People ex rel. State
Public Works Bd. v. Talleur (1978) 79 Cal.App.3d 690, 695-696.) The jury ––
which, unless waived, is charged with determining the amount of compensation
(Cal. Const., art. I, § 19) –– may consider this information, along with all the other
relevant facts governing permissible uses of the property. Allowing the jury to
weigh such information helps ensure that the compensation awarded is ―just to the
public as well as to the landowner.‖ (Los Angeles County Metropolitan
Transportation Authority v. Continental Development Corp. (1997) 16 Cal.4th
The likelihood that some portion of the property could never be developed
is one fact that would indisputably bear on permissible uses of any undeveloped
property. For example, where a public agency lawfully demands that a landowner
dedicate a portion of the property to the public as a legitimate condition for
granting a permit to develop the remainder of the parcel, no compensation is due.
(Maj. opn., ante, at p. 21; see Dolan v. City of Tigard (1994) 512 U.S. 374, 391;
Nollan v. California Coastal Commission (1987) 483 U.S. 825, 836 (Nollan).
The Fifth Amendment does not shield a landowner from responsibility to mitigate
the burdens imposed on the public by a parcel‘s development, and the mitigation
undertaken by the public entity — e.g., roads, drainage, habitat preservation —
often redounds to the benefit of the landowner as well as to the public generally.
So long as there is an ―essential nexus‖ (Nollan, at p. 837) and ― ‗rough
proportionality‘ ‖ (Dolan, at p. 391) between the required dedication and the
projected impact of the development, the dedication results from a valid exercise
of the public entity‘s police power, not from a taking. (Nollan, at p. 836.
In some situations, a landowner will not yet have sought to develop the
property, but there is a reasonable probability that a public agency would lawfully
condition any future development on a dedication of land to offset the
development‘s effects. This probable future dedication is likewise a fact that
would bear on the property‘s permissible uses. Under California case law, the fair
market value of the dedicated land is therefore based on its undeveloped,
agricultural state. (Maj. opn., ante, at pp. 20-21; City of Porterville v. Young
(1987) 195 Cal.App.3d 1260, 1265-1269 (Porterville).) This is so, as the majority
explains, because the landowner would never have been able to develop the
dedicated portion of the property. (Maj. opn., ante, at p. 21.) ―[I]f the remainder
of the parcel is not developed beyond its present agricultural use, [the] owner will
have been paid exactly what the take was worth; if the remainder of the parcel is
developed for commercial purposes, [the] owner will have been paid for the land
he would have been required to dedicate to [the] city to obtain the building permits
or conditional use permit necessary for the commercial development.‖
(Porterville, at p. 1269.
Here, a public agency asserts that the strip of land sought for condemnation
is the same strip it would have required the property owner to dedicate as a
condition of development. The property‘s valuation as undeveloped, agricultural
land thus depends on (1) whether the hypothetical dedication could lawfully have
been imposed, and (2) whether it was reasonably probable the agency would
actually have imposed the dedication as a condition of development, even in the
absence of the project. (Porterville, supra, 195 Cal.App.3d at pp. 1268-1269
[record showed that the dedication would have been required as a condition of
development even if the city had not undertaken its street-widening project]; City
of Fresno v. Cloud (1972) 26 Cal.App.3d 113, 119 [trial court erred in excluding
evidence of a ―high probability‖ that building permits would not have been issued
without the street dedications].) Where those two elements are satisfied, ―the most
that a willing buyer would pay for the portion subject to the dedication
requirement is its value in its undeveloped state.‖ (Maj. opn., ante, at p. 21.)1 If,
on the other hand, ―the owner were compensated based on the highest and best use
of the property [as light industrial], the owner would get a windfall — i.e.,
payment based on developed value for property that could not have been
developed under any circumstances.‖ (Maj. opn., ante, at p. 21; see Contra Costa
Flood Control etc. Dist. v. Lone Tree Investments (1992) 7 Cal.App.4th 930, 935-
936 [―Lone Tree would receive a windfall if it were to receive commercial value
for a strip of land that would never be developed and that a buyer knew could not
Such a payment would not only be a windfall. It would be unconstitutional.
(See Redevelopment Agency v. Gilmore (1985) 38 Cal.3d 790, 809 (conc. opn. of
Mosk, J.).) A compensation award that would make the owner better off than if
the property were never taken is flatly contrary to the constitutional requirement
that just compensation be ―just to the public as well as to the landowner.‖ (Los
Angeles County Metropolitan Transportation Authority v. Continental
Development Corp., supra, 16 Cal.4th at p. 716; accord, United States v.
Commodities Corp. (1950) 339 U.S. 121, 123.
I therefore part company with the majority to the extent it mandates such a
windfall when (in its words) ―it was probable at the time the dedication
requirement was put in place that the property designated for public use was to be
included in the project for which the property is being condemned.‖ (Maj. opn.,
Some jurisdictions go so far as to deny compensation altogether for the
dedicated land, even when the owner has not yet sought to develop the property.
(See State v. Sturmfels Farm Ltd. Partnership (Mo.Ct.App. 1990) 795 S.W.2d
581, 587 [where the dedication requirement would have been constitutional and
was reasonably likely to have been imposed, landowners suffer ―no compensable
ante, at p. 3.) The extra layer of analysis it purports to add to the Porterville
inquiry is as difficult to understand as it is to apply. Nor can the majority point to
a single authority, in this state or any other jurisdiction, that has applied a ―date of
probable inclusion‖ analysis to exclude an entirely lawful, reasonably probable
dedication from the determination of just compensation. This omission is
particularly striking, given that ―every court across the United States that has
decided the issue has held that future dedication requirements are admissible‖ in
determining just compensation for the dedicated land. (Herman & Martinez-
Esteve, The Admissibility of Dedication Requirements in Condemnation Cases:
No Longer the Road Less Traveled (Nov. 2011) 85 Fla. Bar J. 20, 22, italics
added.) Most importantly, the majority fails to explain how the windfall it has
now required public agencies to pay to random, lucky property owners can be
reconciled with the state Constitution.
What the majority appears to believe is that the project effect rule compels
it to exclude evidence of a hypothetical dedication from the valuation of property
lawfully subject to a dedication requirement. This rule provides that ―[t]he fair
market value of the property taken shall not include any increase or decrease in the
value of the property that is attributable to . . . [¶] (a) The project for which the
property is taken‖ or ―(c) Any preliminary actions of the plaintiff relating to the
taking of the property.‖ (Code Civ. Proc., § 1263.330.) But section 1263.330 is
merely a codification of just compensation principles. (See Woolstenhulme,
supra, 4 Cal.3d at pp. 496-497; Buena Park School District of Orange County v.
Metrim Corp. (1959) 176 Cal.App.2d 255.) Where, for example, property was
initially expected to be attractively close to an artificial lake but was eventually
condemned to build the lake, evidence of the project‘s effect on the property‘s
value is inadmissible from the point at which it became reasonably probable that
the property would in fact be taken for the project. (Woolstenhulme, at p. 484.
And where property is condemned for a freeway, the valuation of the property
should exclude a zoning restriction barring any development on the property that
would be inconsistent with the proposed freeway. (City of San Diego v. Rancho
Penasquitos Partnership (2003) 105 Cal.App.4th 1013, 1034, 1038-1039.
This case is different. The project effect rule has no application where the
agency can show that the dedication on which it relies was lawful and would
actually have been imposed, independent of the project. When the agency makes
this showing, it has done all it needs to prove that any decrease in the value of the
property is ―attributable to‖ the exercise of its lawful police power to compel a
dedication — and is therefore not ―attributable to‖ the project for which the
property is being condemned or any preliminary actions relating to the taking of
the property. (Code Civ. Proc., § 1263.330.) In other words, where the agency
could have (and would have) required that the property be dedicated to mitigate
the effects of any development, the agency has shown that the dedicated land
could never have been developed, even if the agency had not undertaken the
project in which it is currently engaged. Nothing in the language or legislative
history of the project effect statute indicates an intent to exclude evidence of
lawful dedications that mitigate the effects of developing a property and that
would have been imposed as a condition of development, independent of any
project then being undertaken.
Nor does our case law support the majority‘s approach. In State Route 4
Bypass Authority v. Superior Court (2007) 153 Cal.App.4th 1546, for example, the
joint powers agency formed to facilitate the construction of a new highway
instructed its member agencies to condition the grant of any development
applications on the dedication of a 110-foot right-of-way ― ‗lying about the
centerline of the SR4 Bypass.‘ ‖ (Id. at p. 1551.) A city engineer testified that this
dedication requirement was designed to facilitate the project and that, in applying
the dedication requirement, he ―would not typically take into account any traffic
study done in connection with a [particular] development or the nature of the
development proposed.‖ (Id. at p. 1553.) Although there is certainly room to
question whether the Court of Appeal correctly determined that the dedication was
lawful or reasonably probable in that case, it nonetheless seems plain that the
dedication requirement there was put in place after inclusion of the affected
properties became probable. (Accord, Dept. of Trans. v. Lundberg (Or. 1992) 825
P.2d 641, 648 [upholding the admission of evidence concerning the city‘s
dedication requirement on the issue of valuation, even though the dedication was
adopted after the city and state had decided on a plan to widen the avenue that
served as a state highway, and the dedication was enacted to ―implement‖ the
What the majority also fails to recognize is that its asserted policy
justifications for cutting back on Porterville, supra, 195 Cal.App.3d 1260, have
already been addressed –– in Porterville itself. To resolve whether it is
―reasonably probable‖ that a public agency would actually have imposed the
dedication as a condition of development even in the absence of the project, the
trier of fact may indeed consider whether the dedication requirement is a
―standard‖ one that has been ―imposed on multiple, similarly situated properties.‖
(Maj. opn., ante, at p. 28.) The factfinder may also consider whether there has
been only ―a short period between the time the property is designated for public
use and the time the agency first signals its intention to condemn the property‖ (id.
at p. 29), to the extent the closeness in time casts doubt on the likelihood the
public agency would actually have imposed the dedication as a condition of
development. How much weight to accord these facts is properly reserved to the
trier of fact.
Instead, the majority‘s approach is likely to generate mischievous effects —
and not only for the trier of fact. The majority‘s reliance on the concept of an
agency‘s ―original expectation,‖ or what a public agency ―originally
contemplated‖ (maj. opn., ante, at p. 26) represents a substantial retreat from the
well-settled rule that ―[t]he proper inquiry is not into the subjective motive of the
agency‖ — an inquiry that would violate ―the principle that courts do not delve
into the individual purposes of decisionmakers in a quasi-adjudicative proceeding‖
— but (rather) whether the agency‘s findings are based on substantial evidence.
(Landgate, Inc. v. California Coastal Com. (1998) 17 Cal.4th 1006, 1022; see maj.
opn., ante, at pp. 11-12, quoting Landgate.) Courts avoid such investigation into
the subjective mental states of public decisionmakers for good reason. Because
public agencies rarely if ever operate entirely as unitary actors, it is far from
obvious what it means to divine their ―intent‖ in this context. The majority‘s
approach may also encourage or even force public agencies to postpone planning
related to a project until a dedication requirement has already been established,
which would unduly and unnecessarily hamper the planning process. (See
Klopping v. Whittier (1972) 8 Cal.3d 39, 45, fn. 1.) Indeed, to say that a public
agency can exact a lawful and reasonably probable dedication valued as
undeveloped land only when the ultimate use of the dedicated property is unknown
or unforeseeable all but encourages agencies to engage in willful blindness, by
pitting good planning against a fair price for the property.
Finally, the majority leaves unanswered a panoply of questions about how
its new rule is supposed to be applied and what effects it will have. For example:
A public project typically has multiple justifications, and a dedication may
be sought to offset myriad effects from development. Must the dedication be
excluded from valuation, even though it was lawful and would have been imposed
as a condition of development, when the agency is unable to show that the
dedication was ―contingent on‖ development of adjacent property (maj. opn., ante,
at p. 26) or is otherwise unable to exclude the possibility that the dedication might
also serve valid public purposes unrelated to development of the property?
The majority puts determinative weight on the date the dedication
requirement was put in place. Does the majority‘s approach effectively nullify ad
hoc dedication requirements?
Will identical dedications on identical types of property trigger different
levels of compensation, depending on what the agency originally contemplated or
how far along the project is? When a dedication is lawfully made a condition of
development, but the property is probably included in a project, must the property
owners who have submitted applications to develop their property be paid for the
dedication — a dedication the government would otherwise have obtained ―for
free‖ (maj. opn., ante, at p. 21)? And how should buyers and sellers in the market
value a potential dedication when the value of that dedication will be determined
entirely on the relative timing of the imposition of a dedication requirement and
the commencement of the project for which the dedication is sought?
These questions are crucial under our law, but they are not ones the project
effect rule is capable of answering. The project effect rule, as interpreted in our
case law, ensures only that the condemned property‘s valuation is not distorted by
a public agency‘s preparations for the project, or by the project itself. But where a
strip of the property in question would lawfully have been taken to offset the
impact of developing the rest of the parcel — even if the project never existed —
then the probable future dedication is neither a ―project‖ nor preliminary actions
―relating‖ to the project within the meaning of section 1263.330 of the Code of
Civil Procedure. That the majority fully agrees with this proposition (see maj.
opn., ante, at p. 26 [―Nothing in the language or legislative history of subdivision
(a) indicates an intent to cover steps taken by a public agency to mitigate the
impact of development, independent of any project‖]) makes its apparent
retrenchment from Porterville all the more difficult to understand.
Under the approach I endorse, by contrast, the task for the trial court on
remand would remain straightforward — sensitive to the realities of the planning
process, and in accordance with established law. Quite simply: Does the
dedication satisfy Porterville? To answer that question, the trial court would
consider whether requiring the owners to dedicate a middle strip comprising
almost 20 percent of their property would have an essential nexus to the valid
public purpose that would be served by denying the permit, and whether the
dedication would be roughly proportional to the impact of any future development.
(See Rohn v. City of Visalia (1989) 214 Cal.App.3d 1463 [a dedication
constituting 14 percent of the property, which would be used to realign a city
street, was an improper condition under Nollan, supra, 483 U.S. 825, on the
owner‘s application to convert a residence to an office building].) If so, a jury
would determine whether it was reasonably probable the city, even in the absence
of the project, would have required a dedication of this scope. If the city fails to
satisfy either element of Porterville, then the city‘s condemnation of the strip can
fairly be characterized as part of the Indian Avenue project, and the purported
dedication requirement, under the project effect rule, should be excluded from the
jury‘s valuation of the property.
So I concur with the majority that the first prong of the Porterville inquiry
is a question for a court, not a jury. But otherwise, I respectfully dissent.
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion City of Perris v. Stamper
Review Granted XXX 218 Cal.App.4th 1104
Opinion No. S213468
Date Filed: August 15, 2016
Judge: Dallas Holmes*
Allen Matkins Leck Gamble Mallory & Natsis, K. Erik Friess and Nisha Verma for Defendants and
Luke A. Wake; Paul J. Beard II, Jennifer F. Thompson and Jonathan W. Williams for Pacific Legal
Foundation and NFIB Small Business Legal Center as Amici Curiae on behalf of Defendants and
Aleshire & Wynder, Eric L. Dunn, Sanaz K. ―Sunny‖ Soltani, Pam K. Lee and Adriana P. Mendoza for
Plaintiff and Respondent.
Shute, Mihaly & Weinberger, Andrew W. Schwartz, Maya Kuttan and Laura D. Beaton for League of
California Cities and California State Association of Counties as Amici Curiae on behalf of Plaintiff and
*Retired judge of the Riverside Superior Court, assigned by the Chief Justice pursuant to article VI, section
6 of the California Constitution.
Counsel who argued in Supreme Court (not intended for publication with opinion):
K. Erik Friess
Allen Matkins Leck Gamble Mallory & Natsis
1900 Main Street, Fifth Floor
Irvine, CA 92614-7321
Sanaz K.―Sunny‖ Soltani
Aleshire & Wynder
18881 Von Karman Avenue, Suite 1700
Irvine, CA 92612