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State v. Eighth Judicial Dist. Court of Nevada

Supreme Court of Nevada

June 25, 2015

THE 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 A.D. AMERICA, INC., A NEVADA CORPORATION, Real Party in Interest

Page 737

Original petition for a writ of mandamus or prohibition challenging a district court partial summary judgment in an inverse condemnation proceeding.

Petition granted.

Adam 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.

DOUGLAS, J. We concur: Hardesty, C.J. Parraguirre, J. Cherry, J. Saitta, J. Pickering, J. GIBBONS, J., concurring.

OPINION

Page 738

BEFORE THE COURT EN BANC.

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

Page 739

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 ...


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