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April 11, 2005
Mark E. Amodei
Chairman, Senate Judiciary Committee
Nevada Legislature
Carson City, NV
Re: SB 326
Dear Chairman Amodei:
I represent Washoe County in three pending lawsuits
regarding various issues bearing on the public’s acquisition, by
eminent domain, of the Ballardini Ranch. The County opposes section 1
of SB 326. This letter summarizes my comments before the Judiciary Committee
of last week, and responds to your question about the effect SB 326 might
have on the pending lawsuits if the bill were made retroactive. Three
lawsuits currently exist.
1. Case No. CV04-02092: The County’s August, 2004,
eminent domain suit seeks to condemn the entire 1019 acre Ballardini Ranch
for public open space, and asks the court to determine just compensation.
Evans Creek, LLC paid $8.5 million for the property in 1998. The County’s
offer of $18.6 million was rejected by Evans Creek. Both sides are reappraising
the property as of August, 2004, the statutory valuation date. Evans Creek
principal Tim Nelson believes the value of the property is not less than
$100 million. Trial is set for 4 weeks in May, 2006. Settlement conference
is set for November, 2005 before Judge Adams. Evans Creek previously removed
the case to federal court, but Judge McKibben remanded it, finding the
issue of eminent domain is not a federal matter.
2. Case No. CV-–04-0433: Evans Creek, LLC’s
August, 2004 federal civil rights case against the County. The purpose
of the case was to stop the County’s state condemnation case and
secure money damages. Evans Creek alleges various facts, which were also
stated by Evans Creek in its presentation to the Senate Judiciary Committee,
and seeks more than $50 million, above and beyond the fair market value
of the property. The County filed a motion to dismiss the case, which
is now under submission to Judge McKibben.
3. Case No. CV03-01746: This is a case for declaratory
relief filed by Evans Creek, LLC against the County. Washoe County declared,
in April, 1999, the existence of certain historical roads, as authorized
by state statute. (NRS 405.191, and NRS 405.195). One of these roads crosses
the Ballardini Ranch. Evans Creek contends the Ranch has never been subject
to public travel, and asks the court to void the County’s designation.
This case is now consolidated for trial with the County’s eminent
domain suit in the Second Judicial District Court, Department 3, (Judge
Polaha), with trial set for 4 weeks beginning May 1, 2006.
A. The County opposes
SB 326, as an unwarranted change in existing law, even if it is not amended
to make it retroactive.
SB 326 seeks to outlaw the use of eminent domain for acquisition of open
space. This changes existing law.
NRS 37.010 identifies public purposes for which eminent domain may be
exercised. In section 3, it states in pertinent part:
County...activities... [A]nd all other public purposes for the benefit
of any county...or the inhabitants thereof.
Open space is a public purpose. The legislature declared in NRS 361A.090:
The legislature hereby declares that it is the best interest of the state
to maintain, preserve, conserve and otherwise continue in existence adequate
agricultural and open-space lands and the vegetation thereon to assure
continued public health and the use and enjoyment of natural resources
and scenic beauty for the economic and social well-being of the state
and its citizens.
The legislature further adopted NRS Chapter 376A, amplifying the legislative
conclusion that open-space is a public purpose, and providing for its
acquisition and maintenance. Chapter 376A states in relevant part:
376A.010 Definitions:
...
1. "Open-space
land" means land that is undeveloped natural landscape, including,
but not limited to, ridges, stream corridors, natural shoreline, scenic
areas, view sheds, agricultural or other land devoted exclusively to
open-space use and easements devoted to open-space use that are owned,
controlled or leased by public or nonprofit agencies.
...
3. "Open-space
use" includes:
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(a) The preservation of land to
conserve and enhance natural or scenic resources;
(b) The protection of streams and
stream environment zones, watersheds, view sheds, natural vegetation
and wildlife habitat areas;
(c) The maintenance of natural and
man-made features that control floods, other than dams;
(d) The preservation of natural
resources and sites that are designated as historic by the office
of historic preservation of the department of cultural affairs,
and;
(e) The development of recreational
sites.
NRS 376A.030 (1) states: If an open-space plan is adopted pursuant
to NRS 376A.020, the board of county commissioners may:
(b)
Acquire by purchase...or by any other manner, parcels of land...for
open-space in
accordance with the open-space plan.(Emphasis Added).
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The County adopted its open space plan in 1994. The Implementation
section of the plan lists condemnation as one of the methods by which
land can be acquired. In 2000, the voters of Washoe County approved
Washoe County Question No. 1, which approved the issuance of up to $38,300,000.00
in bonds for Park, Open Space, and Libraries. $4,000,000.00 of this
money is earmarked to go toward the purchase of the Ballardini Ranch,
the total value of which exceeds this amount. In 2001, the Washoe County
Board of Commissioners passed a resolution specifying the importance
of acquiring the Ballardini Ranch for open space, directing staff to
pursue funding in cooperation with other entities.
The State of Nevada is not the only state which protects open space
as a public use and policy. "It is a generally accepted concept
that the preservation of open space for the various reasons discussed
above is a public purpose to justify the use of the power of eminent
domain". 14D Nichols on Eminent Domain, Section 02.5. Other states
which have enacted protective legislation include California, Florida,
Georgia, Illinois, New Jersey, New York, Connecticut, and Massachusetts.
The U. S. Supreme Court, in deciding the case of City of Monterey v.
Del Monte Dunes at Monterey, et al., 526 U.S. 687, at 700, cited with
approval a jury instruction which stated:
Public bodies...have the authority to take actions which substantially
advance legitimate public interest[s] and legitimate public interest[s]
include protecting the environment, preserving open space agriculture,
protecting the health and safety of its citizens, and regulating the
quality of the community by looking at development."
The Nevada Supreme Court in Bushard v. Washoe County, 68 Nev. 217, 236
P. 2d 793 (1951) dealt with similar facts. Washoe County condemned 138
acres on Slide Mountain for public park, picnic ground, and recreational
area. The District Court by its judgment found the taking to be for
public park and recreation area. This is consistent with the uses of
open space (which statute did not exist in 1951 when Bushard was decided)
because the open space will be used for recreation as well as the other
purposes set forth in NRS 376A and quoted above.
In conclusion, use of eminent domain to acquire the Ballardini Ranch
for open space is authorized by current Nevada statutes, case law, and
the law of eminent domain generally in federal and state jurisdictions
in the United States. This is the current state of the law.
B. SB 326 will change
existing law.
The effect of SB 326 as currently drafted (prospective effect only) will
be to change the law by disallowing the use of eminent domain for the
acquisition of open space. The County opposes the bill because it will
prevent the acquisition of open space from persons who either do not want
to sell at any price for any reason, or who will sell, but only at a price
far above market value. Eminent domain allows the County to compel the
sale, and guarantees the owner fair market value as determined by a court.
This process allows the County, on behalf of the taxpayers, to present
evidence of the property’s fair market value to counter an exorbitant
demand. By removing eminent domain as a tool of local government, the
legislature places the local government in the position where it may have
to pay above market value because it loses the ability to have a court
determine that value, or, to forgo the purchase of the property entirely.
This is contrary to the public interest. Because of the scope of uses
defined as open space under NRS 376A.010, which included wetlands, flood
control, and other crucial public purposes, elimination of the eminent
domain option would be highly detrimental to the public interest.
C. SB 326, if amended
to take effect retroactively, will affect the currently pending litigations.
It is difficult to predict exactly how a retroactive SB 326 would affect
the cases. Our legal analysis is not complete. It is the intent of this
letter that it assist the committee in its decision-making process, but
not be used as evidence against the County in any of the above cases.
The possibilities are as follows:
Evans Creek might move to dismiss the County’s eminent domain case
using a retroactive SB 326 as authority. Since open space constituted
a public use for which eminent domain could be used in 2004 under then-existing
law, the County would argue SB 326 is unconstitutional special legislation
that should not be given retroactive effect. Nev. Const. Art. 4, Section
20. Evans Creek participated in writing Section 1 of SB 326. To my knowledge,
this is the only condemnation case now pending in the State of Nevada
involving open space. Accordingly, the retroactivity would not have general,
state-wide application, but would apply only to help Evans Creek defeat
the public’s acquisition.
The County might also make other arguments, such as that the retroactive
legislation is unconstitutional because it invades the province of the
court, creating a separation of powers question. Normally, questions about
the legality of the eminent domain (public use and necessity) are addressed
to the trial judge.
If Judge Polaha honored a retroactive SB 326, the result might be dismissal
of the eminent domain case. This could trigger an appeal by the County
to the Nevada Supreme Court. If Judge Polaha refused to enforce a retroactive
SB 326, the trial would proceed, but Evans Creek might appeal thereafter
on SB 326 grounds. It appears SB 326 (if retroactive) could lead to more
litigation, not less.
The dismissal of the County’s eminent domain suit might affect the
federal case, but it is not clear exactly how. The possibilities include
that the federal case would proceed, leaving the County exposed to the
claim of $50 million in damages, but now without the remedy of acquiring
the land and perhaps without the remedy of defending on the legality of
the public use. Another possibility is that the federal judge would dismiss
the civil rights case as mooted by legislative directive to the State
Court to dismiss the eminent domain suit. A third possibility is that
Evans Creek could dismiss the suit and go forward with its development.
The amount of damages, and whether the federal case would survive the
eminent domain case dismissal, or whether Evans Creek would even pursue
it, also remain open questions. We have not heard, however, any commitment
from Evans Creek to drop the federal case in exchange for the legislatures’
help in the eminent domain case. Other possibilities may exist. Our research
is continuing.
The historical roads case might be the least affected of the suits. This
case would probably continue and be resolved on its merits. Even this
is not for sure. Our research is continuing.
Conclusion
Changing the law after the game has been played is very dangerous, because
it creates a multitude of legal and practical problems. It is difficult
to see how these can play out at this time. The statute should not be
made retroactive.
SB 326, even prospective only, ties the hands of local government and
puts the public in a difficult situation of either paying too much for
land or of not acquiring it. We believe it is better not to blanketly
forbid eminent domain in these cases, but to let each develop according
to its own facts in the future.
In the end, this is not a good subject for legislation, in our view. Not
only does it change existing law and create the problems outlined above,
but by disturbing orderly court processes already underway, it deprives
the courts of opportunities to resolve the issues via alternative dispute
resolution. Mr. Chairman, in your remarks in last week’s hearing,
you asked whether density transfer was a possibility. Just last week Evans
Creek mentioned developing 184 lots on the property. This is substantially
fewer lots than the County had previously understood were proposed for
the property. The proper forum for exploring whether this development
is consistent with the public’s open space needs is a judicially
supervised process, where the legal rights of the landowner and the taxpayers
can be worked out in a confidential manner and where the vested trial
positions of the parties will not be prejudiced.
We request the committee not to legislate the existing eminent domain
case. The committee’s encouragement and recommendation to the parties
to avail themselves of all judicial options is preferable to legislation.
Sincerely,
LAW OFFICE OF MICHAEL G. CHAPMAN, P.C.
Michael G. Chapman
Attorney at Law
MGC/JT
cc: Katy Singlaub
Karen Mullen
Melanie Foster
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