City of Oakland v. Oakland Raiders

• Decision Date: 21 June 1982
• Docket Number: S.F. 24363
• Court: California Supreme Court
• Parties: Previously published at 31 Cal.3d 656 31 Cal.3d 656, 32 Cal.3d 60, 646 P.2d 835, 30 A.L.R.4th 1208 CITY OF OAKLAND, Plaintiff and Appellant, v. OAKLAND RAIDERS, et al., Defendants and Respondents.

Page 673

183 Cal.Rptr. 673

Previously published at 31 Cal.3d 656

31 Cal.3d 656, 32 Cal.3d 60, 646 P.2d 835, 30 A.L.R.4th 1208

CITY OF OAKLAND, Plaintiff and Appellant, v. OAKLAND RAIDERS, et al., Defendants and Respondents.

S.F. 24363.

Supreme Court of California In Bank.

June 21, 1982.

As Modified Aug. 5, 1982.

David A. Self, Oakland, John D. Rogers, Rogers, Vizzard & Tallett, San Francisco, Michael W. Stamp, Oakland, Laurence P. Horan, Horan, Lloyd & Karachale, Monterey, Richard Winnie, City Atty., Jeffrey N. Haney, Acting City Atty., and Theodore R. Lakey, Asst. City Atty., for plaintiff and appellant.

Moses Lasky, R. Stewart Baird, Lasky, Haas, Cohler & Munter, San Francisco, Barrie Engel, Hardin, Cook, Loper, Engel & Bergez, Oakland, and William Mathews Brooks, San Leandro, for defendants and respondents.

RICHARDSON, Justice.

The City of Oakland (City) appeals from a summary judgment dismissing with prejudice its action to acquire by eminent domain the property rights associated with respondent Oakland Raiders' (the Raiders) ownership of a professional football team as a franchise member of the National Football League (NFL). We conclude that the trial court erred in granting the summary judgment and we reverse and remand the case for a full evidentiary trial of the issues on the merits.

The Raiders limited partnership is comprised of two general partners, Allen Davis and Edward W. McGah, and several limited partners, all of whom are individual respondents herein. In 1966 the Raiders and the Oakland-Alameda County Coliseum, Inc., a nonprofit corporation, entered into a five-year licensing agreement for use of the Oakland Coliseum by the Raiders. Having been given five three-year renewal options, the Raiders exercised the first three, and failed to do so for the football season commencing in 1980 when contract negotiations for renewal terminated without agreement. When the Raiders announced its intention to move the football team to Los Angeles, City commenced this action in eminent domain.

The trial court granted summary judgment for all respondents and dismissed the action. The legal confrontation between the parties is sharply defined. City insists that what it seeks to condemn is "property" which is subject to established eminent domain law. City contends that whether it can establish a valid "public use" must await a determination of the court after a full trial at which all relevant facts may be adduced. In answer, respondents argue that the law of eminent domain does not permit the taking of "intangible property not connected with realty," thereby rendering impossible City's condemnation of the football franchise which respondents describe as a "network of intangible contractual rights." Further, respondents claim that the taking contemplated by City cannot as a matter of law be for any "public use" within City's authority. Thus, two issues are herein presented, the first dealing with the intangible nature of the property proposed to be taken, and the second focusing on the scope of the condemning power as limited by the doctrine of public use. We consider them sequentially after acknowledging some accepted eminent domain principles of broad application.

We have held that "The power of eminent domain is an inherent attribute of sovereignty." (County of San Mateo v. Coburn [1900] 130 Cal. 631, 634, 63 P. 78; accord City of Anaheim v. Michel [1968] 259 Cal.App.2d 835, 837, 66 Cal.Rptr. 543; Anaheim Union High Sch. Dist. v. Vieira [1966] 241 Cal.App.2d 169, 171, 51 Cal.Rptr. 94.) This sovereign power has been described as "universally" recognized and "necessary to the very existence of government." (1 Nichols on Eminent Domain (3d ed. 1980) §§ 1.11, 1.14, pp. 1-10, 1-22.) When properly exercised, that power affords an orderly compromise between the public good and the protection and indemnification of private citizens whose property is taken to advance that good. That protection is constitutionally ordained by the Fifth Amendment to the United States Constitution, which is made applicable to the states by nature of the Fourteenth Amendment (Chicago, Burlington R.R. v. Chicago [1897] 166 U.S. 226, 233-241, 17 S.Ct. 581, 583-586, 41 L.Ed. 979) and by article I, section 19 of the California Constitution.

Because the power to condemn is an inherent attribute of general government, we have observed that "constitutional provisions merely place limitations upon its exercise." (People v. Chevalier [1959] 52 Cal.2d 299, 304, 340 P.2d 598.) The two constitutional restraints are that the taking be for a "public use" and that "just compensation" be paid therefor. (Ibid.; City of Anaheim, supra, 259 Cal.App.2d at p. 837, 66 Cal.Rptr. 543.) No constitutional restriction, federal or state, purports to limit the nature of the property that may be taken by eminent domain. In contrast to the broad powers of general government however, "a municipal corporation has no inherent power of eminent domain and can exercise it only when expressly authorized by law. (City of Menlo Park v. Artino [1957] 151 Cal.App.2d 261, 266, 311 P.2d 135 ....)" (City of Anaheim, supra, at p. 837, 66 Cal.Rptr. 543.) We examine briefly the source of City's statutory power.

In 1975, California's eminent domain statutes received extensive revision and recodification. (See Code Civ.Proc., § 1230.010 et seq., all further statutory references are to this code unless otherwise indicated; see also, e.g., Gov.Code, § 37350.5.) These changes were recommended by the California Law Revision Commission after it studied our existing eminent domain law and reviewed similar laws of every jurisdiction in the United States, pursuant to legislative direction. (See Eminent Domain Law, 13 Cal.Law Revision Com.Rep. (1975) pp. 1009-1011.) In the words of the commission, the new law was intended "to cover, in a comprehensive manner, all aspects of condemnation law and procedure" and to produce "a modern Eminent Domain Law within the existing California statutory framework." (Id., at pp. 1010-1011.)

Certain provisions of the recodified law are particularly relevant to the issues before us. Government Code section 37350.5, as amended, provides: "A city may acquire by eminent domain any property necessary to carry out any of its powers or functions." (Italics added.) As newly defined, " 'Property' includes real and personal property and any interest therein." (§ 1235.170.) In implementation of the foregoing right to take, the new code also authorizes any "person" empowered to take property for a particular use to exercise certain additional power to condemn other property "necessary to carry out and make effective the principal purpose involved ...." (Id., § 1240.120, subd. (a); see id., § 1240.110.) Within this context, "person" includes "any public entity" (id., § 1235.160); and "public entity," in turn, includes a "city." (Id., § 1235.190.) The constitutional obligation to pay compensation for property so taken also is codified. (See id., § 1263.010, subd. (a).)

The new law appears to impose no greater restrictions on the exercise of the condemnation power than those which are inherent in the federal and state Constitutions. Further, the power which is statutorily extended to cities is not limited to certain types of property. In discussing the broad scope of property rights which are subject to a public taking under the new law, the Law Revision Commission comment notes that "Section 1235.170 is intended to provide the broadest possible definition of property and to include any type of right, title or interest in property that may be required for public use." (See Cal.Law Revision Com. com. to Code Civ.Proc., § 1235.170, Deering's Ann.Code Civ.Proc. (1981 ed.) p. 20.) To that end the commission eliminated the "duplicative listings of property types and interests subject to condemnation" which had appeared in the earlier eminent domain statutes. (Ibid.)

Despite the apparent lack of any constitutional or statutory restrictions, respondents nonetheless assert that "intangible property" such as the contractual and other rights involved in the instant action has never before been taken by condemnation and that such taking should not be sanctioned now.

Initially, we note that the lack of precedent does not establish that the legal right to take intangibles is lacking. Further, while there is little applicable California law on the point, the Raiders, in our view, overstates its case.

Over 125 years ago, the United States Supreme Court rejected a similar claim that intangible property could not be condemned. In The West River Bridge Company v. Dix et al. (1848) 6 How. 507, 47 U.S. 507, 533, 12 L.Ed. 535, the high court carefully explained: "A distinction has been attempted ... between the power of a government to appropriate for public uses property which is corporeal ... and the like power in the government to resume or extinguish a franchise. The distinction thus attempted we regard as a refinement which has no foundation in reason, and one that, in truth, avoids the true legal or constitutional question in these causes; namely, that of the right in private persons, in the use or enjoyment of their private property, to control and actually to prohibit the power and duty of the government to advance and protect the general good. We are aware of nothing peculiar to a franchise which can class it higher, or render it more sacred, than other property. A franchise is property, and nothing more; it is incorporeal property ...."

A century later, the high court reaffirmed the principle. Reasoning that "the intangible acquires a value ... no different from the value of the business' physical property," it concluded that such intangibles as trade routes of a laundry were condemnable, upon payment of just compensation therefor, when properly taken for a public use. (Kimball Laundry Co. v. U. S. [1949] 338 U.S. 1, 10-11, 16, 69 S.Ct. 1434, 1440, 1443, ...