Eminent Domain Law

In affirming, the Appellate Division acknowledged that consequential damages are available when the state's taking of a part of a landowner's land diminishes the value of the remainder.  But the court held that consequential damages are not available when the taking of a neighbor's land diminishes the value of a landowner's land.  In this case, claimant had no ownership interest in the neighbor's land, and was therefore not entitled to consequential damages.

Comment

At least in cases where a government taking does not constitute a nuisance, denying consequential damages to neighbors puts the government on an equal footing with private landowners whose uses devalue neighboring land. In Campbell v. United States, 266 U.S. 368, 371, the Supreme Court denied a neighbor consequential damages arising from a government taking of nearby land for use as a nitrate plant, but granted the nearby landowner consequential damages resulting from the partial taking of his own land for use in the same project. The Court explained that had landowner decided to build a nitrate plant, the neighbor would not have been entitled to damages or an injunction, and concluded that the liability of United States should not be greater than that of a private landowner. While Campbell involves the actions of United States government and federal takings law, New York's parallel takings law suggests the same principles may be at play. Accordingly, in Lucas v. State, 44 A.D.2d 633, where the state condemned land from adjacent owners for construction of a highway, the court limited landowner's consequential damages to the noise and vibrations emanating from the portion of the highway constructed on the land that was formerly his, but denied recovery for those same harms emanating from the portion of the highway constructed on adjacent land.

Administrative concerns about the efficiency of litigation may also underlie the rule granting landowner consequential damages while denying them to neighbors. Under New York law, damages from a partial taking are calculated as the difference between the market value of the land before and after the appropriation. (See, Town of Brookhaven v. Gold, 89 A.D.2d 963, where the court calculated damages from a government road bifurcating landowner's property by comparing the market value of the property before the taking and the value of the remainder after the taking). Although courts often conflate the terms (See, In re City of N.Y., N.Y.S.2d 313, 339), two distinct harms can arise from a partial taking: severance damages, which arise from the remaining tract being less usable as a result of its smaller size; and consequential damages, which arise by virtue of the way the condemnor uses the appropriated property. “Condemnation Law and Procedures in New York,” Santemma, Jon, ed., New York State Bar Association (2005) at 196. The simple damage calculation (market-value before minus market-value after) would not be usable if landowner were entitled only to severance damages but not consequential damages.  By contrast, no judicial economy is achieved by awarding consequential damages to neighbors, who are not entitled to severance damages at the outset.

Additionally, granting neighbors a right to consequential damages might burden the judicial process by creating an unbounded class of parties who would claim compensation for often trivial losses, undermining eminent domain policy, which is to make every reasonable “expeditious effort to justly compensate persons for such real property by negotiation and agreement.” N.Y. Em. Dom. Proc. Law §301.