Nevada Complex Litigation

Eminent Domain: Inverse Condemnation

Inverse condemnation is a term used to describe a situation in which the government has engaged in an activity which results in the taking of private property but the government has not commenced an eminent domain action or paid just compensation.  In order to get compensation, the landowner is forced to sue the government. 

In these cases the landowner is the plaintiff and the government is the defendant, that is why the action is called inverse - the position of the parties is reversed, as compared to a direct eminent domain proceeding where the government is the plaintiff and has initiated a lawsuit against a landowner to take all or a portion of the landowner’s private property for public use. 

The taking suffered by a landowner in an inverse condemnation action can be a physical taking of private property, some other form of governmental interference in the landowner’s enjoyment of the land, or a regulatory taking caused by governmental regulations which are so onerous that they make private property unusable by the landowner for any reasonable or economically viable purpose.

Inverse condemnation proceedings are the constitutional equivalent to, and are governed by, the same rules and principles that are applied in a direct eminent domain action.  However, a landowner can recover attorney’s fees in an inverse condemnation action but cannot do so in a direct eminent domain proceeding.

Feel free to contact Attorney Bill Cooper if you have eminent domain questions related to your property or to a real estate transaction. He may be reached at 702-562-2269 or by email.

Eminent Domain: Regulatory Takings

A “regulatory taking” occurs when the value or usefulness of private property is diminished because of some regulatory action taken by a governmental entity.  A regulatory taking claim usually arises as a result of the implementation of land use planning and zoning ordinances, building codes, or environmental regulations.  If a regulatory taking has occurred, the landowner is entitled to initiate an inverse condemnation action to recover just compensation for the taking.  There are two categories of regulatory action that generally will be deemed per se takings:

1). The first category is when a government regulation requires an owner of property to suffer a permanent physical invasion of his or her property.  If so, the landowner is entitled to just compensation.   As an example, in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), the United States Supreme Court ruled that a state law requiring landlords to permit cable companies to install cable facilities inside apartment buildings constituted a permanent taking for which just compensation had to be paid.

In McCarran Int’l Airport v. Sisolak, 122 Nev.Adv.Rep. 58 (2006), height restriction ordinances imposed by Clark County on property near McCarran Airport limited the landowner’s ability to build multiple story buildings and enabled airplanes to fly over the property at lower levels.  This constituted a permanent, physical invasion of the landowner’s airspace for which the landowner was entitled to just compensation.

2). The second category of per se takings is when a government regulation completely deprives an owner of “all economically beneficial use of her or his property”.  In Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), a landowner purchased two residential lots on which he intended to build homes.  Thereafter, the state enacted a regulation which barred the landowner from erecting any permanent homes on the two parcels.  The United States Supreme Court held that when a regulatory action denies a landowner of all economically viable use of his or her property, the landowner is entitled to just compensation.

Outside of these relatively narrow per se taking categories, other regulatory taking claims are governed by the standards set forth in Penn Central Transportation Company v. New York City, 438 U.S. 104 (1978), which require courts to engage in a three-pronged factual analysis to determine whether a governmental action constitutes a taking of private property.  The three-prongs are:

1). The character or nature of the governmental action;
2). The severity of the regulations economic effect on the landowner; and
3). The extent to which the regulation interferes with reasonable investment-backed expectations.

Eminent Domain: Dedications/Exactions

The government may require that a landowner or developer dedicate a portion of the subject property as a condition of obtaining permits necessary to develop the property.  The government may require dedication of property for public uses such as streets, drainage, or public facilities such as fire stations, sewers, parks or schools which may be necessary because of the proposed development. 

Generally, the requirement by a regulatory body of a dedication of land as a condition of development has been held to be constitutional as against a claim that the requirement constitutes an act of eminent domain.  However, the imposition of a dedication requirement as a condition to the issuance of a development permit may constitute an “unconstitutional condition” under certain circumstances. 

In Dolan v. City of Tigard, 512 U.S. 374 (1994), the United States Supreme Court held that for a conditioned grant of a development permit to be constitutional, a reasonable relationship must exist between the exactions demanded and a legitimate state interest.  The court adopted a two-part test to determine whether the condition is constitutional.  The permit condition must:  1) have an “essential nexus” to a legitimate governmental interest; and 2) must be related to the impact of the development.  There must be a showing by the government that the permit condition is “roughly proportional” to the projected impact of the development.

If you have questions related to this or any aspect of eminent domain, feel free to contact Attorney Bill Cooper at 702-382-5111 or by email.

School & Workplace Violence Resources

Let me start by expressing my sympathy for all affected by yesterday's shooting at Northern Illinois University and the other recent incidents of school and college violence.  It saddens me that education and business professionals must face this issue in order to try to protect students, employees and loved ones.

As an attorney who writes about and speaks on Workplace Violence Threat Assessment, I have discovered a few resources which I would like to share here.  Please feel free to forward this to any one working in the area of school/business management and human resource professionals.

First, I would like to recommend the American Psychological Association (APA).  This very professional group has many resources for employers of every size.  One article worth mentioning here is "Warning Signs of Youth Violence".  I would encourage all employers to read it as about 80% of these signs can be applied to most workplaces.

Next, I would like to tip my hat to the International Association of Chiefs of Police (IACP).  Two of their many excellent publications are: "Guide for Preventing and Responding to School Violence" and "Combating Workplace Violence", Guidelines for Employers and Law Enforcement.

On the Center for Effective Collaboration and Practice (CECP) website, you will find a "School Violence Prevention and Intervention" resource list.  Many are in Spanish & English.

The FBI has a "School Violence Resources" page, and again many of these resources are applicable to most workplaces.

School violence is workplace violence.  Let us all try to learn from these school tragedies. Then let's apply something we have learned to our own workplaces to make them a little safer.

Whistleblower Lawsuit Filed Against Countrywide KB Home Loans

Mark Zachary was hired as Regional Vice President of Countrywide KB Home Loans in August 2006.  In February of 2007, Zachary received a positive performance review.  He was fired 3 months later. 

During those 3 months, Zachary complained that some employees were engaging in questionable practices to facilitate the closing of home loans.  Those practices included advising customers to document false income amounts in order to receive “no doc” loans and advising appraisers to inflate property values.

Countrywide denies the charges and said in an issued statement, "Countrywide stands behind its systems and processes and will defend this case vigorously."

It is interesting to note that within a few days of this lawsuit, 2 California couples filed a lawsuit claiming that Countrywide KB Home Loans fraudulently inflated the appraisals of their new KB homes while neighbors with independent appraisals bought at reduced prices.  Their lawsuit seeks restitution, compensatory and punitive damages and class-action status for all California KB Home customers who bought homes from August 2005 to July 2006 and used Countrywide financing, specifically Countrywide KB Home Loans.

If either the whistleblower lawsuit or the California lawsuit have merit, plaintiffs are more likely to prevail in both cases. 

How Does Eminent Domain Law Define "Public Use" in Nevada

Although one of the constitutional limits on the use of eminent domain is the requirement that the property can only be taken for a “public use”, recent decisions by the United States Supreme Court and the Nevada Supreme Court have interpreted the “public use” limitation to require that the use of the property after the taking merely result in some public benefit, or that the taking have a public purpose. 

These decisions reject the concept that the federal and Nevada constitutions require actual use of the  condemned property by the general public.  Under this broader view of “public use”, the government can take private property by eminent domain and give the property to a private developer as long as the private development project serves a public purpose such as the revitalization of an  economically distressed area, or the eradication of social and economic blight.

The broad definition of “public use” applied by modern courts has raised serious concern among state legislatures and property owners that the “public use” limitation on the exercise of the power of eminent domain, no longer imposes a viable restriction on the use of the power in that the government can now use the power of eminent domain to take private property and transfer ownership of that property to another private person or entity. 

For this reason, the 2007 Nevada legislature passed substantial amendments to Nevada’s eminent domain law and passed proposed amendments to the Nevada constitution which are designed to limit the situations in which the government can use eminent domain to take private property and transfer the property to another private entity.