State v. Eighth Judicial Dist. Court of State

Decision Date25 June 2015
Docket NumberNo. 63179.,63179.
PartiesThe STATE of Nevada, on Relation of its Department of Transportation, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT OF the STATE of Nevada, in and for the COUNTY OF CLARK; and The Honorable Allan R. Earl, District Judge, Respondents, and Ad America, Inc., a Nevada Corporation, Real Party in Interest.
CourtNevada Supreme Court

Adam Paul Laxalt, Attorney General, and Dennis Gallagher, Chief Deputy Attorney General, Carson City; Lemons, Grundy & Eisenberg and Robert L. Eisenberg, Reno; Chapman Law Firm, P.C., and Michael G. Chapman and Erich N. Storm, Las Vegas, for Petitioner.

Law Offices of Brian C. Padgett and Brian C. Padgett and John P. Shannon, Las Vegas; Leach Johnson Song & Gruchow and Kirby C. Gruchow, Jr., Las Vegas, for Real Party in Interest.

Law Offices of Kermitt L. Waters and Kermitt L. Waters, James Jack Leavitt, Michael A. Schneider, and Autumn L. Waters, Las Vegas, for Amici Curiae People's Initiative to Stop the Taking of Our Land and Carrie L. Jenkins.

Before the Court En Banc.

OPINION

By the Court, DOUGLAS, J.:

In this opinion, we consider whether the district court erred by determining that Nevada's Department of Transportation (NDOT) owes just compensation for taking Ad America's property in conjunction with Project Neon, a freeway improvement plan, based on NDOT's and the City of Las Vegas' precondemnation activities. Specifically, we address whether a taking occurred under either the United States or Nevada Constitutions because NDOT publicly disclosed its plan to acquire Ad America's property to comply with federal law, the City independently acquired property that was previously a part of Project Neon, and the City rendered land-use application decisions conditioned on coordination with NDOT for purposes of Project Neon. We conclude that the district court erred by conflating Nevada's precondemnation damages standard with takings law, and that, after applying the correct law, no taking of Ad America's property occurred. Accordingly, we grant the petition.

FACTUAL AND PROCEDURAL HISTORY
Project Neon

Petitioner NDOT is the lead agency for Project Neon, a six-phase, 20– to 25–year freeway improvement project for the Interstate Highway 15 (I–15) corridor between Sahara Avenue and the U.S. Route 95/I–15 interchange in Las Vegas. With an estimated cost of between $1.3 and $1.8 billion dollars, the completion of Project Neon depends primarily on funding from the Federal Highway Association (FHWA). To procure this funding, NDOT complied with the National Environmental Policy Act (NEPA) by performing an environmental assessment of Project Neon between 2003 and 2009. NEPA required NDOT to publicly release all reasonable development alternatives it was considering for public comment. Each of these alternatives included the commercial rental property owned by real party in interest, Ad America.

Based on the results of the environmental assessment, NEPA also required NDOT to complete an environmental impact statement (EIS). In 2011, after the approval of the EIS, FHWA allocated $203 million to NDOT for Phase 1 of Project Neon. Notably, at that time, NDOT did not anticipate acquiring Ad America's property for another 17 years during Phase 5, assuming funding was available.

To reduce the impacts associated with Project Neon, NDOT coordinated efforts with the City of Las Vegas and other agencies. Anticipating the development of an arterial improvement (the MLK Connector) that is no longer a part of Project Neon, the City amended its Master Plan to allow for certain road widening and, on October 24, 2007, purchased a tract of land from a private party. Additionally, the City approved 19 land-use applications for development rights of properties in proximity to Project Neon.1

Ad America

Ad America acquired its property between 2004 and 2005, planning to redevelop existing business space into higher-end commercial offices with multilevel parking. To that end, Ad America hired a surveyor and architect, the latter having drafted a preliminary design. Ad America then retained a political consultant to obtain necessary development permits. After speaking with members of the City Planning Department and one City Council member, the consultant opined that there was a de facto moratorium on development in the path of Project Neon. Based on this opinion, Ad America chose not to submit development applications for its property.

In October 2007, Ad America began informing its tenants that its property would be acquired for Project Neon. Although Ad America's net rental income remained steady from 2007 to 2010, it decreased by approximately 37 percent in 2011.2 Ad America has not had its property appraised or attempted to sell it. As of August 2012, Ad America could no longer meet its mortgage commitments.

Procedural history

Ad America filed an inverse condemnation action against NDOT in the District Court of Clark County, Nevada, seeking precondemnation damages for alleged economic harm and just compensation for the alleged taking of its property.3 Thereafter, NDOT filed a motion in the district court for a determination that the valuation date for purposes of the inverse condemnation action was May 3, 2011, the date Ad America served its summons and complaint. Ad America filed an opposition to that motion and included a countermotion to set a valuation date of October 24, 2007, the date it alleged that the acquisition of property for Project Neon began. NDOT interpreted Ad America's countermotion to include a motion for summary judgment on the takings issue and filed an opposition to Ad America's countermotion proposing the valuation date and a countermotion for summary judgment on the takings issue.

Ultimately, the district court granted Ad America's summary judgment requests and denied NDOT's summary judgment requests.4 In its order, the district court attributed the City of Las Vegas' actions, including its purchase of property and land-use decisions, to NDOT and determined that NDOT committed a taking of Ad America's property on October 24, 2007.5 At the time of this decision, it was undisputed that NDOT had not physically occupied Ad America's property, passed any regulation or rule affecting Ad America's property, or taken any formal steps to commence eminent domain proceedings against Ad America's property. In its writ petition, NDOT requests that we order the district court to grant summary judgment and dismissal in NDOT's favor.

DISCUSSION

Writ consideration

A writ of mandamus is available “to control an arbitrary or capricious exercise of discretion.” Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008). Generally, writ relief is available only when there is no “plain, speedy, and adequate remedy in the ordinary course of law.” NRS 34.170 ; Westpark Owners' Ass'n v. Eighth Judicial Dist. Court, 123 Nev. 349, 356, 167 P.3d 421, 426 (2007). An appeal from a final judgment or order is usually an adequate remedy, Int'l Game Tech., 124 Nev. at 197, 179 P.3d at 558, and the court often declines to exercise its discretion to consider writ petitions challenging interlocutory district court orders. See Smith v. Eighth Judicial Dist. Court, 113 Nev. 1343, 1344, 950 P.2d 280, 281 (1997). The court has considered writ petitions, however, when “an important issue of law needs clarification and considerations of sound judicial economy and administration militate in favor of granting the petition.” Int'l Game Tech., 124 Nev. at 197–98, 179 P.3d at 559.

We conclude that NDOT's writ petition merits our consideration. First, the petition raises an important issue regarding Nevada's takings law. Second, the petition presents an important question of policy about an agency's ability to engage in efficient, long-term planning dependent on federal funding. And third, given Project Neon's magnitude as a 20– to 25–year, six-phase freeway improvement project requiring multiple acquisitions of private property and the inevitability of other similar long-term projects in the future, addressing the issues raised in this petition will serve judicial economy. Accordingly, we exercise our discretion to consider this writ petition.6

We will only issue a writ of mandamus “to compel entry of a summary judgment when [the evidence on file viewed in a light most favorable to the nonmoving party shows] there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law,” Cnty. of Clark v. Bonanza No. 1, 96 Nev. 643, 650, 615 P.2d 939, 943 (1980) ; In re Irrevocable Tr. Agreement of 1979, ––– Nev. ––––, ––––, 331 P.3d 881, 889 n. 8 (2014). In making this determination, we consider legal questions de novo. In re Irrevocable Tr. Agreement of 1979, ––– Nev. at ––––, 331 P.3d at 884–85.

In its petition, NDOT argues that there was no taking here because there was no physical ouster, regulatory taking, or unlawful exaction. NDOT also contends that it cannot be held liable for the City's actions. According to NDOT, concluding that there has been a taking in these circumstances is unjustifiably speculative given the contingencies of both federal funding and continued need for Ad America's property in 2028 when Phase 5 of Project Neon begins.

In response, Ad America contends that NDOT committed a taking of its property.7 Specifically, Ad America asserts that there was a de facto moratorium on development in Project Neon's path, Project Neon had moved from the planning to acquisition stage, and Ad America suffered substantial impacts. According to Ad America, it has been rendered an involuntary and indentured trustee of its property due to the effects of Project Neon.

Takings

Eight hundred years ago, the Magna Carta laid a foundation for individual property rights, including the protection of private property from unlawful government takings, which was incorporated into the U.S. Constitution.8 See Bridget C.E. Dooling, Take it...

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