Michael Rikon
Michael Rikon ()

New York’s Eminent Domain Procedure Law (EDPL) §404 provides that a condemnor, when engaged in work connected to a proposed public project, shall have the right to enter upon any real property for the purpose of making surveys, test pits and borings, or other investigations and also for temporary occupancy during construction. But is this statutory right to enter to inspect and test constitutional?

The condemnor is required to deliver notice to the owner stating the necessity for entry.

EDPL §404 also provides that the condemnor shall be liable to the owner for any damages caused by the condemnor.

If the owner will not consent to entry to test or measure, the condemnor would be prudent to move by order to show cause to obtain a court order allowing entry. We are unaware of any case where a court denied the request. The court may, upon the request of an owner direct that the condemnor post a bond to cover any damages which may be created by its contractor. Sun Co. v. City of Syracuse Indus. Dev. Agency, 197 AD2d 912 (4th Dept. 1993).

The pre-vesting tests include environmental examination of the soils and testing for asbestos which might affect valuation or require an owner to remediate.

California Law

California’s Eminent Domain Law has a similar entry statute. In Property Reserve v. Superior Court, 224 Cal. App. 4th 828 (3d App. Dist. 2014), the court examined a provision similar to New York’s statute. The State of California sought to build a tunnel to transport water from the north part of the state to the south. Before condemning the land needed for the project, the state studied the environmental and geological suitability of hundreds of properties on which the tunnel may be constructed.

The state petitioned the trial court for an order allowing the entry of the properties to conduct the studies. Included within the geological study was a request to do borings and drillings in the ground that would leave permanent columns of cement in the bored holes up to depths of 200 feet.

The trial court denied the request for the geological activities. It ruled these activities constituted a taking and could only be authorized in a direct condemnation. The trial court did, however, grant the request to enter the parcels to conduct environmental studies. It conditioned permission on the deposit of money into court. The state appealed and so did the owners.

The court concluded that both activities, geological and environmental, will work a taking. It is not surprising that the proposed boring and concrete cores would constitute a taking. But the holding that the performance of the environmental activities works a taking was surprising because California’s law is so similar to New York’s law.

The geological activities clearly result in a permanent physical occupation by the government removing earth from the parcels and filling the holes with permanent columns of cement. “A permanent physical occupation authorized by government is a taking without regard to the public interest that it may serve.” Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426 (1982). This is, of course, a violation of the Fifth Amendment.

The California court stated that the entry for environmental activities works a taking of a compensable property interest in the nature of a temporary easement which is an interest in property. Unlike the geological activities, the environmental activities are not a taking per se. Rather, the court stated, a “more complex balancing process” must be performed to determine whether the entry to perform the tests constitutes a taking. Four factors were considered.

1. The degree to which the invasions are intended;

2. The character of the invasions, which includes the consideration of exclusive ownership, and the right to exclude strangers;

3. The amount of time the invasions will last; and,

4. The invasions’ economic impact on the landowners and interference with their distinct investment-backed expectations.

Thus, the court concluded that all of the factors weigh in favor of finding a temporary taking. The invasion and its consequences were intended by the state similar to a direct condemnation for a temporary easement.

There was a long dissenting opinion. Since the case involves a critical issue in California’s water supply, it should be expected that further review will be made by the California Supreme Court.

Property Reserve does not provide a bright-line test for ascertaining whether government can proceed under entry statutes. But it is clear that any pre-condemnation investigation that will have significant impact on the property, or the owner’s ability to exclude, provides a basis for challenge which will enable a property owner to object to pre-vesting entry to conduct tests.

Many states have similar right-to-enter statutes including the right to do soil borings and test for contamination. The provisions were modeled after the Uniform Eminent Domain Code, which has been renamed the Model Eminent Domain Code. In New York, the right to enter was found in the Highway Law, Section 30, Subdivision 17. The significant change was the notice requirement.

Relying on Other Jurisdictions

New York courts have in the past paid heed to important decisions in other jurisdictions. In Matter of City of New York (Mobil Oil Corporation), 12 AD3d 77 (2d Dept. 2004), the Appellate Division, Second Department, relied on decisions rendered by the New Jersey Supreme Court. In a case of first impression, the Second Department held that a condemnee’s liability for environmental contamination should not be adjudicated in an eminent domain proceeding without the safeguards that are set forth in the appropriate proceedings. The Second Department cited Housing Auth. v. Suydam Investors, 177 NJ 2 (2003) and stated, “In the case at bar, we concur with our colleagues in New Jersey and conclude that it would be ‘fundamentally unfair’ to allow the City to value the property as contaminated for condemnation purposes, and yet still recover the remediation costs.”

Another example is Criscuola v. Power Auth., 81 NY2d 649 (1993) where the Court of Appeals changed New York’s law in finding that proof of reasonableness is not required to establish a fear or perception of danger or health risks from exposure to high-voltage power lines. Thus, consequential damages from “cancer phobia” need not be established by scientific proof. In making this decision, the Court of Appeals relied on decisions from California, Florida and Kansas.

Warrantless Search

New York’s EDPL §404 may well violate the Constitution in other ways. The statute provides the right to enter upon any real property to do “test pits and borings, or other investigations, and also for temporary occupancy during construction.” This should be unconstitutional insofar as it effectively authorizes a warrantless inspection of the property, which violates the Fourth Amendment. See Sokolov v. Freeport, 52 NY2d 341 (1981); ATM, One, LLC v. Incorporated Vil. of Hempstead, 91 AD3d 585 (2d Dept. 2010). In ATM, property owners, in order to rent their property, were required to apply for a permit which required the inspection of each rental dwelling unit. The ordinance was struck down as unconstitutional for the warrantless inspection.

Other examples exist. In Village of Fairport v. Teremy, 266 AD2d 909 (4th Dept. 1999), apl dism. 94 NY2d 898 (2000), a civil penalty for construction of a deck without a permit was dismissed because the code enforcement officer conducted a warrantless search of the property and thereby violated the Fourth Amendment.

The subject of dealing with government investigatory demands is discussed in detail in Daniel Riesel’s book, Environmental Enforcement, Law Journal Press (1997). Riesel, a founding partner at Sive, Paget & Riesel, wrote:

The Fourth Amendment of the United States Constitution prohibits ‘unreasonable searches and seizures,’ and its statement of standards on which a warrant can be issued is clear. However, the Amendment left a hole for judges, legislators and administrators to attempt to fill through voluminous case law, statutes and regulations, on the issues of whether, when, and for what purpose a search warrant must be obtained before a search can be conducted. Ibid, Sec. 303 (2), Pages 3-5 – 3-6.

Inspection Prior to Vesting

Another section of the EDPL—Section 302—provides that in order to adequately prepare such appraisal upon which the condemnor’s offer is based, the condemnor shall have the right to inspect such property prior to vesting. The provision also states that the failure of the owner to comply with this section shall suspend the condemnor’s obligation to make an offer. This too is questionable. The U.S. Supreme Court has held “the right to continue the exercise of privilege granted by the State cannot be made to depend upon the grantee’s submission to a condition prescribed by the State which is hostile to the provisions of the Federal Constitution.” United States v. Chicago, M., S.P. & P.R. Co, 282 U.S. 311, 328-329.

There are other issues. Why should a property owner assist a condemnor in determining whether the property is blighted? As was made clear from the recent cases, Matter of Goldstein v. New York State Urban Dev. Corp., 13 NY3d 511 (2009) and Matter of Kaur v. New York State Urban Dev. Corp., 15 NY3d 235 (2010), cert. den. 131 S. Ct. 822 (2010), judges may not substitute their views as to the agency’s findings of blight, even if the finding of blight is strained and pretextual.

Time for Review

New York’s EDPL was drafted in 1973-1975 and adopted in 1977. It has not undergone any substantial study or modification since then. In March 2006, the New York State Bar Association Special Task Force on Eminent Domain published a report which mainly provided legal analysis and recommendation about appropriate legislative and regulatory considerations in the practice of eminent domain in the aftermath of the U.S. Supreme Court ruling in Kelo v. City of New London, 545 US 469 (2005).

The report stated that since enactment of the EDPL, little recodification has occurred. Nothing has changed. It was noted that there is a critical need for codification in the substantive law of eminent domain. The Legislature should review the entire law now.

Michael Rikon is a partner of Goldstein, Rikon, Rikon & Houghton.