The primary impact of AB 408 centers around how compensation offers are evaluated in eminent domain litigation. Under the existing law, defendants could recover litigation costs if the plaintiff’s offer was deemed unreasonable. AB 408 strengthens this provision by stipulating that if a plaintiff's offer is lower than 90% of the awarded compensation, the court must include the defendants' litigation costs in the allowable costs. This change is expected to incentivize fair compensation offers by plaintiffs, potentially leading to more reasonable settlement discussions and reducing litigation over compensation disagreements.
Summary
Assembly Bill 408, introduced by Assembly Member Chen, seeks to amend Section 1250.410 of the California Code of Civil Procedure, which governs eminent domain proceedings. The bill aims to modify the conditions under which defendants in these proceedings can recover litigation expenses associated with their legal representation. The proposed changes will provide clarity on the threshold for what constitutes a reasonable settlement offer succeeding the court's decision regarding compensation awarded in eminent domain cases.
Contention
Notable points of contention surrounding the bill may arise from concerns about how the amendments could influence settlements and the dynamics of negotiation in eminent domain disputes. Some may argue that the new thresholds for cost recovery could encourage defendants to reject reasonable offers in hopes of a larger settlement, thus prolonging litigation. Conversely, proponents of the bill argue that it will discourage plaintiffs from making unreasonably low offers, thereby safeguarding defendants against excessive legal costs when claims are not handled fairly.