D.C. No. 3:05-cv-01137-DMS-WMC Appeal from the United States District Court for the Southern District of California Dana M. Sabraw, District Judge, Presiding
The opinion of the court was delivered by: Gould, Circuit Judge:
Argued and Submitted March 8, 2012-Pasadena, California
Before: Harry Pregerson, Ronald M. Gould, and Richard C. Tallman, Circuit Judges.
The California State Lands Commission (the "Lands Commission") appeals the district court's final judgment in this eminent domain case, wherein the United States took a fee simple interest in about 32.42 acres of land (the "Property") on behalf of the Navy, which has continuously leased this parcel since 1949. In condemning the Property, the United States sought to extinguish California's public trust rights. The Lands Commission contends that California's public trust rights cannot be extinguished by the United States' power of eminent domain. The Lands Commission does not dispute the United States' power to take and use the land without trust restrictions. Instead, it asks us to hold that California's public trust rights become "quiescent" while the United States owns the land but will "re-emerge" if the United States seeks to transfer the Property to a private party.
The district court held that the United States' condemnation extinguished California's public trust on the entire parcel, and that the 27.54 acres which are filled can be conveyed to a private party free of any trust, but that the 4.88 acres that remained tidelands at the time of the taking are now subject to a federal public trust and may not be conveyed to a private party. The issue before us is whether the United States can extinguish California's public trust rights when exercising its federal power of eminent domain. We hold that it can, and affirm the judgment of the district court.
The Lands Commission is a unit of California's state government that provides stewardship of the lands, waterways, and resources entrusted to its care. The Lands Commission does this by economic development, protection, preservation, and restoration of lands. The Lands Commission has all jurisdiction remaining in the state as to tidelands and submerged lands granted in trust by the Legislature to local government entities. CAL. PUB. RES. § 6301.
The Property is located in the City of San Diego ("City") on the south side of North Harbor Drive at Nimitz Boulevard, and is now occupied by the Navy's Fleet Anti-Submarine Warfare Training Center. In 1850, the State of California acquired this land as an attribute of its sovereignty upon admission to the Union. In 1911, the California Legislature granted the Property to the City, subject to California's common law public trust. In 1949, the Property was leased to the Navy for 50 years, with a right to renew for an additional 50 years, as part of a land exchange with the City. In 1963, the City transferred the lands to the newly formed San Diego Port District ("Port") subject to the public trust and the Navy lease. Over time, the Property has been filled to expand the Navy's Training Station. Today only 15% of it (4.88 acres) is covered with water. But the entire parcel was subject to California's public tidelands trust at the time of the federal condemnation action because it was entirely underwater when California joined the Union in 1850.
When the Navy sought to exercise its exclusive option to renew the lease in 1996, the Port and the Lands Commission opposed the extension, and the United States brought a condemnation action to enforce its rights under the lease. See generally United States v. Polar Star, 668 F.3d 1119, 1124 (9th Cir. 2012) ("An eminent domain claim can be used by the Government to quiet title to its [leasehold] interest in a property"). The district court granted summary judgment in favor of the United States, but that order was later withdrawn as part of a settlement agreement dismissing California's appeal from that order and granting the United States a lease in the Property through August 2049. In 2005, the Navy decided that it wanted to own the Property in fee simple. In May 2005, the United States filed a complaint in condemnation and declaration of taking in the Southern District of California. The complaint explicitly lists "any tidelands trust rights of the State of California" as part of the estate to be taken.
The Port objected to the taking on many grounds. The district court overruled those objections and they are not part of this appeal. At issue is the Lands Commission's motion for summary judgment, wherein it contends that the United States could not extinguish California's public trust rights. The district court denied the Lands Commission's motion in April 2006, holding that the United States' condemnation of the Property extinguished California's public trust in the entire parcel, that the 27.54 acres of filled land are free of any public trust restrictions, but that the 4.88 acres that remain tidelands are now subject to a federal public trust. A trial followed to determine the amount of just compensation, estimated by the Untied States at $237,000, but ...