9th Circuit Avoids Takings Lawsuit

The Ninth Circuit has declined to decide a takings case brought by developers whose property the Los Angeles Community Redevelopment Agency (CRA) has acquired through eminent domain for economic development.

M&A Gabaee, a partnership of real estate developers, owns the two properties on East Slauson Avenue where the CRA wants to develop a shopping center. However, in December 2003, CRA signed a development agreement with Slauson Central to develop the sites. The CRA then started separate eminent domain processes for the two properties.

M&A Gabaee responded by suing in federal court, arguing that taking the property for economic development was not a valid use of eminent domain authority. (In June, the U.S. Supreme Court issued its most controversial land use decision in years when it ruled that the government may use eminent domain for economic development purposes.)

However, the Ninth Circuit declined to hear M&A Gabaee’s argument, ruling that the federal courts should abstain because there is a parallel action in state court.

The landowner pointed out that it filed a second federal lawsuit one day before the CRA commenced its second eminent domain action, and it filed its first federal lawsuit before anything of substance had happened yet with the CRA’s first eminent domain suit.

The court essentially turned those arguments around. What mattered, the court ruled, was that state court action was ongoing with regard to one property, and nothing of substance had happened in the second federal lawsuit when the CRA started condemnation proceedings for the second property. Because that was the situation, federal courts must abstain, the Ninth Circuit ruled.

The case is , No. 04-55888, 05 C.D.O.S. 7332, 2005 DJDAR 9993. Filed August 17, 2005.