No. 63179 

FILED 

JUN 2 5 2015 

7,1E N. LINDEMAN ,... juk 

CLERK 

BY 

CHIEE D 

131 Nev., Advance Opinion 41 

IN THE SUPREME COURT OF THE STATE OF NEVADA 

THE STATE OF NEVADA, ON 

RELATION OF ITS DEPARTMENT OF 

TRANSPORTATION, 

Petitioner, 

vs. 

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 

AD AMERICA, INC., A NEVADA 

CORPORATION, 

Real Party in Interest. 

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. 

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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. 

BEFORE THE COURT EN BMW. 

OPINION 

By the Court, 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 sixphase, 20- to 25-year freeway improvement project for the Interstate 

Highway 15 (I-15) corridor between Sahara Avenue and the U.S. Route 

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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 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." 

'In several instances, the City conditioned its approval of land-use 

applications on coordination with NDOT. In all but one of these cases, the 

City removed those conditions. The City also tabled three land-use 

continued on next page . . 

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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 development in the path of Project Neon. Based on 

this opinion, Ad America chose not to submit development applications for 

its property. 

In October 2007, Ad America began informing its tenants that 

its property would be acquired for Project Neon. Although Ad America's 

net rental income remained steady from 2007 to 2010, it decreased by 

approximately 37 percent in 2011. 2Ad America has not had its property 

appraised or attempted to sell it. As of August 2012, Ad America could no 

longer meet its mortgage commitments. 

. • . continued 

applications because of concerns for aesthetics and potential conflicts with 

Project Neon, among other things. 

2Ad America's tenant occupancy remained steady from 2007 to 2009, 

decreasing by approximately 36 percent (four tenants) in 2010. Ad 

America provided affidavits from two of its former tenants indicating that 

they did not renew their rental leases because of Project Neon. The record 

provides no data for net rental income or tenant occupancy for any period 

before 2007, making it impossible to assess any diminution of these values 

occurring between 2005 and 2007. 

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Procedural history 

Ad America filed an inverse condemnation action against 

NDOT in the District Court of Clark County, Nevada, seeking 

precondemnation damages for alleged economic harm and just 

compensation for the alleged taking of its property. 3Thereafter, NDOT 

filed a motion in the district court for a determination that the valuation 

date for purposes of the inverse condemnation action was May 3, 2011, the 

date Ad America served its summons and complaint. Ad America filed an 

opposition to that motion and included a countermotion to set a valuation 

date of October 24, 2007, the date it alleged that the acquisition of 

property for Project Neon began. NDOT interpreted Ad America's 

countermotion to include a motion for summary judgment on the takings 

issue and filed an opposition to Ad America's countermotion proposing the 

valuation date and a countermotion for summary judgment on the takings 

issue. 

Ultimately, the district court granted Ad America's summary 

judgment requests and denied NDOT's summary judgment requests. 4In 

its order, the district court attributed the City of Las Vegas' actions, 

3The City of Las Vegas was listed as a party to the action but never 

served. 

4Although the district court's order was somewhat opaque about its 

granting summary judgment in favor of Ad America on the takings issue, 

our review of the hearing transcripts confirms that this was the district 

court's intended disposition. See Oxbow Constr. v. Eighth Judicial Dist. 

Court, 130 Nev., Adv. Op. 86, 335 P.3d 1234, 1240 (2014) ("When a district 

court's order is unclear, its interpretation is a question of law that we 

review de novo."). 

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including its purchase of property and land-use decisions, to NDOT and 

determined that NDOT committed a taking of Ad America's property on 

October 24, 2007. 5At the time of this decision, it was undisputed that 

NDOT had not physically occupied Ad America's property, passed any 

regulation or rule affecting Ad America's property, or taken any formal 

steps to commence eminent domain proceedings against Ad America's 

property. In its writ petition, NDOT requests that we order the district 

court to grant summary judgment and dismissal in NDOT's favor. 

DISCUSSION 

Writ consideration 

A writ of mandamus is available "to control an arbitrary or 

capricious exercise of discretion." Int'l Game Tech., Inc. v. Second Judicial 

Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008). Generally, writ 

relief is available only when there is no "plain, speedy, and adequate 

remedy in the ordinary course of law." NRS 34.170; Westpark Owners' 

Ass'n v. Eighth Judicial Dist. Court, 123 Nev. 349, 356, 167 P.3d 421, 426 

(2007). An appeal from a final judgment or order is usually an adequate 

remedy, Ina Game Tech., 124 Nev. at 197, 179 P.3d at 558, and the court 

often declines to exercise its discretion to consider writ petitions 

challenging interlocutory district court orders. See Smith v. Eighth 

Judicial Dist. Court, 113 Nev. 1343, 1344, 950 P.2d 280, 281 (1997). The 

court has considered writ petitions, however, when "an important issue of 

law needs clarification and considerations of sound judicial economy and 

5We decline to address Ad America's precondemnation damages 

claim because the district court has not decided the issue. 

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administration militate in favor of granting the petition." Int'l Game 

Tech., 124 Nev. at 197-98, 179 P.3d at 559. 

We conclude that NDOT's writ petition merits our 

consideration. First, the petition raises an important issue regarding 

Nevada's takings law. Second, the petition presents an important 

question of policy about an agency's ability to engage in efficient, longterm planning dependent on federal funding. And third, given Project 

Neon's magnitude as a 20- to 25-year, six-phase freeway improvement 

project requiring multiple acquisitions of private property and the 

inevitability of other similar long-term projects in the future, addressing 

the issues raised in this petition will serve judicial economy. Accordingly, 

we exercise our discretion to consider this writ petition. 6 

We will only issue a writ of mandamus "to compel entry of a 

summary judgment when [the evidence on file viewed in a light most 

favorable to the nonmoving party shows] there is no genuine issue as to 

any material fact and the movant is entitled to judgment as a matter of 

law." Cnty. of Clark v. Bonanza No, 1, 96 Nev. 643, 650, 615 P.2d 939, 943 

(1980); In re Irrevocable Trust Agreement of 1979, 130 Nev., Adv. Op. 63, 

331 P.3d 881, 889 n.8 (2014). In making this determination, we consider 

legal questions de novo. In re Irrevocable Trust Agreement of 1979, 130 

Nev., Adv. Op. 63, 331 P.3d at 884-85. 

6We summarily deny Ad America's request for a writ of prohibition 

because it is not a proper vehicle to challenge the order at issue here. 

Oxbow Constr., 130 Nev., Adv. Op. 86, 335 P.3d at 1238 n.4; see also NRS 

34.320. 

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In its petition, NDOT argues that there was no taking here 

because there was no physical ouster, regulatory taking, or unlawful 

exaction. NDOT also contends that it cannot be held liable for the City's 

actions. According to NDOT, concluding that there has been a taking in 

these circumstances is unjustifiably speculative given the contingencies of • 

both federal funding and continued need for Ad America's property in 

2028 when Phase 5 of Project Neon begins. 

In response, Ad America contends that NDOT committed a 

taking of its property." Specifically, Ad America asserts that there was a 

de facto moratorium on development in Project Neon's path, Project Neon 

had moved from the planning to acquisition stage, and Ad America 

suffered substantial impacts. According to Ad America, it has been 

rendered an involuntary and indentured trustee of its property due to the 

effects of Project Neon. 

Takings 

Eight hundred years ago, the Magna Carta laid a foundation 

for individual property rights, including the protection of private property 

from unlawful government takings, which was incorporated into the U.S. 

Constitution. 8 See Bridget C.E. Dooling, Take it Past the Limit: 

7Ad America frames its arguments in terms of a "de facto taking." 

However, the U.S. Supreme Court has not explicitly defined "de facto 

taking." Accordingly, to avoid confusion with other takings terminology, 

we do not use this term. 

sBecause Article 1, Section 8, Clause 6 of the Nevada Constitution 

was partially derived from its counterpart in the U.S. Constitution, see 

Official Report of the Debates and Proceedings in the Constitutional 

Convention of the State of Nevada 60-63 (July 4, 1864) (Eastman 1866), 

that clause, too, is connected to the Magna Carta. 

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Regulatory Takings of Personal Property, 16 Fed. Cir. B.J. 445, 454-55 

(2007); Andrew S. Gold, Regulatory Takings and Original Intent: The 

Direct, Physical Takings Thesis "Goes Too Far," 49 Am, U. L. Rev. 181, 208 

(1999). Specifically, the Takings Clause in the Fifth Amendment of the 

U.S. Constitution provides that "private property [shall not] be taken for 

public use, without just compensation." Similarly, the Nevada 

Constitution provides that "[p]rivate property shall not be taken for public 

use without just compensation having been first made, or secured, except 

in cases of war, riot, fire, or great public peril, in which case compensation 

shall be afterward made." Nev. Const. art. 1, § 8, cl. 6. Our state 

constitution, however, also guarantees every individual's right to acquire, 

possess, and protect property. Nev. Const. art. 1, § 1. As we previously 

explained in McCarran International Airport v. Sisolak, 122 Nev. 645, 670, 

137 P.3d 1110, 1127 (2006), "our State enjoys a rich history of protecting 

private property owners against government takings," and "the Nevada 

Constitution contemplates expansive property rights in the context of 

takings claims." 

Although our federal and state constitutions provide 

significant protection of private property rights, these rights must be 

considered in light of the realities facing state and local government 

entities in their efforts to serve the public through long-term projects that 

require significant planning and extensive compliance with both state and 

federal law. Thus, these competing interests are balanced in takings 

jurisprudence. See Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 

„ 133 S. Ct. 2586, 2594-95 (2013) (explaining that there is a need to 

protect land-use permit applicants given their vulnerability in the face of 

government discretion granting or denying their application and a need to 

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protect the public from the burden of additional costs from the proposed 

development); see also Penn Cent. Transp. Co. v. City of New York, 438 

U.S. 104, 124 (1978) ("Government hardly could go on if to some extent 

values incident to property could not be diminished without paying for 

every such change in general law. . . ." (internal quotation omitted)). 

Federal takings jurisprudence 

Given "the nearly infinite variety of ways in which 

government actions or regulations can affect property interests," no "magic 

formula" exists in every case for determining whether particular 

government interference constitutes a taking under the U.S. Constitution. 

Arkansas Game & Fish Comm'n v. United States, 568 U.S. „ 133 S. 

Ct. 511, 518 (2012). Nevertheless, there are several invariable rules 

applicable to specific circumstances. Id. "[A] direct government 

appropriation or physical invasion of private property," for example, is a 

taking, as is a government regulation that authorizes a permanent 

physical invasion of private property or "completely deprive[s] an owner of 

all economically beneficial use of her property." Lingle v. Chevron U.S.A., 

Inc., 544 U.S. 528, 537-38 (2005) (internal quotation omitted). A taking 

also occurs when a government entity requires an unlawful exaction in 

exchange for approval of a land-use permit. See generally Koontz, 570 U.S. 

, 133 S. Ct. 2586. Nearly all other takings claims "turn on situationspecific factual inquiries." Arkansas Game, 568 U.S. at 133 S. Ct. at 

518. 

The parties agree that NDOT did not appropriate or physically 

invade Ad America's property. No unlawful exaction was possible because 

Ad America did not submit any land-use application. Moreover, the only 

government regulation identified by the parties—the City's amendment to 

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its General Plan—did not cause Ad America to suffer a permanent 

physical invasion of its property and, as evidenced by Ad America's stream 

of rental income and the continuing presence of commercial tenants, did 

not completely deprive Ad America of "all economically beneficial use" of 

its property. Accordingly, we are left to consider both regulatory and 

nonregulatory factual inquiries to decide whether actions attributable to 

NDOT amount to a taking. 

Regulatory analysis (Penn Central analysis) 

Generally, courts only consider ripe regulatory takings claims, 

and "a claim that the application of government regulations effects a 

taking of a property interest is not ripe until the government entity 

charged with implementing the regulations has reached a final decision 

regarding the application of the regulations to the property at issue." 

Williamson Ctny. Reg'l Planning Comm'n v. Hamilton Bank of Johnson 

City, 473 U.S. 172, 186 (1985); see also Hsu v. Cnty. of Clark, 123 Nev. 

625, 635, 173 P.3d 724, 732 (2007) (indicating that an owner need not 

exhaust her administrative remedies when a regulation authorizes a 

permanent physical invasion of her property). But when exhausting 

available remedies, including the filing of a land-use permit application, is 

futile, a matter is deemed ripe for review. See Palazzolo v. Rhode Island, 

533 U.S. 606, 625-26 (2001); see also State, Dep't of Taxation v. Scotsman 

Mfg. Co., 109 Nev. 252, 255, 849 P.2d 317, 319 (1993) (acknowledging that 

exhaustion of a taxpayer's administrative remedies is not required when 

doing so would be futile). 

Applying the general exhaustion rule, Ad America's regulatory 

takings claim is unripe for review for a failure to file any land-use 

application with the City. And although Ad America contends that 

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exhaustion was futile because there was a de facto moratorium on 

developing property within Project Neon's path, the record does not 

support this contention. The opinion of Ad America's political consultant, 

which was based on alleged statements from only one of seven City 

Council members, is• insufficient to establish the existence of such a 

moratorium. This is especially true given the context in which that 

opinion was provided, where the City had approved 19 land-use 

applications in proximity to Project Neon juxtaposed with having tabled a 

single entity's 3 applications for special-use permits. 

Even if we ignored the requirement of administrative 

exhaustion, Ad America still could not establish that the City's 

amendment to its General Plan constituted a regulatory taking. Three 

factors guide ad hoc analyses of potential regulatory takings. See Penn 

Cent., 438 U.S. at 124. These factors are (1) "the economic impact of the 

regulation on the claimant," (2) "the extent to which the regulation has 

interfered with distinct investment-backed expectations," and (3) "the 

character of the governmental action." Id. Here, the record does not 

support the proposition that the amendment had• an economic impact on 

Ad America. Additionally, because the road-widening amendment had no 

demonstrated nexus to Ad America's property, any impact on Ad 

America's investment-backed expectations to develop its property would 

be negligible. Finally, given the need to widen specific streets to ensure 

adequate access to private property and construction areas during Project 

Neon, the character of the government action is more akin to "adjusting 

the benefits and burdens of economic life to promote the common good" 

than to a physical invasion. Id. We therefore conclude that the 

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regulation's impact on Ad America's property does not constitute a 

regulatory taking. 

Nevertheless, even assuming that these factors favored a 

conclusion that Ad America's property was taken by the City's amendment 

to its Master Plan, NDOT was not directly or vicariously liable for the 

City's actions forming the basis of the hypothetical taking. There is no 

compensable taking in such circumstances "unless the government's 

actions on the intermediate third party have a direct and substantial 

impact on the plaintiff asserting the takings claim." Tex. State Bank v. 

United States, 423 F.3d 1370, 1377 (Fed. Cir. 2005) (internal quotation 

omitted). And despite Ad America's efforts to portray NDOT as a grand 

puppet master dictating the City's actions, the record does not support 

such a portrayal. A City's decision to amend its Master Plan in a 

coordinated effort to support both its residents' needs and the needs for a 

construction project that will benefit its residents does not satisfy the 

aforementioned legal standard. 9 

Nonregulatory analysis 

As Ad America's briefing intimates and Arkansas Game 

acknowledges, see 568 U.S. at , 133 S. Ct. at 518, an ad hoc approach 

outside of the regulatory takings context is possible. The U.S. Court of 

Appeals for the Federal Circuit, for example, has recognized that even 

where no government regulation is at issue, a taking occurs if the 

government has "taken steps that directly and substantially interfere H 

9Based on the record, the City's unilateral decision to purchase a 

parcel of land for the MLK Connector also cannot be attributed to NDOT. 

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with [an] owner's property rights to the extent of rendering the property 

unusable or valueless to the owner." Stueve Bros. Farms, LLC v. United 

States, 737 F.3d 750, 759 (Fed. Cir. 2013). This standard, however, only 

applies in extreme cases. Id. As an example of an extreme case, we 

consider the facts of Richmond Elks Hall Association v. Richmond 

Redevelopment Agency, 561 F.2d 1327 (9th Cir. 1977), wherein the Ninth 

Circuit concluded that a nonregulatory taking had occurred. 

The Richmond Elks Hall Association (Elks) owned property 

that it leased to commercial tenants. Richmond Elks, 561 F.2d at 1329. 

In 1959, the City of Richmond declared that a group of properties, 

including Elks', was blighted, created the Richmond Development Agency 

(Agency), and authorized Agency to exercise eminent domain. Id. By May 

1966, the City approved Agency's plan for redevelopment of the blighted 

area, which anticipated that Elks' property would be acquired within two 

years. Id. By the end of 1966, Agency had begun acquiring blighted 

properties. Id. 

In early 1967, Elks received a letter from Agency stating that 

Elks could only retain its property if it signed an agreement to rehabilitate 

the property at its own expense, which Elks declined to do. Id. By May 

1967, understanding that its property would soon be acquired, Elks 

refused to offer tenancies in excess of month-to-month. Id. Moreover, as a 

direct result of Agency's actions, Elks' commercial tenants suffered a 

decrease in their gross sales, causing most of the tenants to leave the 

property. Id. The exodus of tenants reduced Elks' rental income to less 

than one-third of what it was before Agency adopted its plan. Id. at 1329- 

30. 

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Later, in July 1968, Agency entered into an agreement with a 

developer obligating Agency to acquire optioned property, including that 

belonging to Elks, and then to convey it to the developer for construction of 

a shopping center. Id. at 1330. The option, aside from being publicly 

known, was extended from one year to two years. Id. By the end of 1969, 

after Agency had acquired 83 percent of the blighted properties, excluding 

Elks' property, federal funding was halted for the project. Id. Nearly 

three years later, despite Agency's redevelopment efforts flooding Elks' 

property on multiple occasions between 1970 and 1972 and its previous 

actions, Agency informed Elks that it would not acquire its property. Id. 

Based on these facts, the Ninth Circuit affirmed the lower court's 

determination that Agency's actions rendered Elks' property "unsaleable 

in the open market" and "severely limited" the property's use for its 

intended purposes. Id. at 1330-31. 

The circumstances in this case do not approach the extremity 

of the facts in Richmond Elks. Unlike Richmond Elks, Ad America's 

property is not anticipated to be needed for Project Neon until 2028, if at 

all. At the date that Ad America alleges that a taking occurred, October 

24, 2007, NDOT had not acquired a single parcel of property for Project 

Neon, and did not for another three years. And, even then, it acquired 

properties slotted for Phase 1 of the project, not Phase 5. 

Also different from Richmond Elks, NDOT had not created a 

contractual obligation or option with a private party guaranteeing future 

rights to Ad America's property. Instead, the only meaningful action 

NDOT had taken as of the alleged date of taking was continuing to 

produce its environmental assessment as required by NEPA, which it did 

not complete until 2009. Furthermore, based on the results of the 

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environmental assessment, NEPA required additional compliance in the 

form of an environmental impact statement, which NDOT did not 

complete until the middle of 2010. Only at this point was it possible to 

reasonably conclude that Ad America's property would likely be needed in 

the future-18 years later. 1° 

Even further, and in contrast to Richmond Elks, the loss of Ad 

America's tenants was theoretically influenced by Ad America 

highlighting NDOT's anticipated need of the property, as explained in Ad 

America's owner's affidavit, magnifying the effect of any generalized 

knowledge that the tenants might have had. Additionally, the reason 

there was public knowledge of Project Neon's anticipated need for Ad 

America's property was because NEPA required disclosure of the plans 

and the opportunity for public comment." Making NDOT's compliance 

with federal law a basis for compensation to Ad America in these 

°Although every development alternative publicly disclosed upon 

the completion of the environmental assessment required Ad America's 

property, federal funding—the means of making Project Neon a reality—

hinged on the completion and acceptance of NDOT's environmental impact 

statement. 

"NEPA requires projects to be submitted as a whole and not 

improperly segmented into subparts. See 40 CFR § 1502.4(a) ("Proposals 

or parts of proposals which are related to each other closely enough to be, 

in effect, a single course of action shall be evaluated in a single impact 

statement"); Defenders of Wildlife v. N.C. Dep't of Transp., 762 F.3d 374, 

394-95 (4th Cir. 2014); see also California ex rel. Imperial Cnty. Air 

Pollution Control Dist. v. U.S. Dep't of the Interior, 767 F.3d 781, 795 (9th 

Cir. 2014). Accordingly, NDOT could not have engaged in a piecemeal 

environmental assessment or impact process to avoid publicly disclosing 

the anticipated need for Ad America's property in the future. 

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circumstances would undermine long-term public projects by requiring 

comprehensive funding for all acquisitions at the planning stage, which 

would, in turn, unreasonably expedite the need for acquired property to be 

put to use. CI Nev. Const. art. 1, § 22, cl. 6 ("Property taken in eminent 

domain shall automatically• revert back to the original property owner 

upon repayment of the original purchase price, if the property is not used 

within five years for the original purpose stated by the government."). 

Finally, the record's minimal empirical evidence undermines 

Ad America's position. The decrease in Ad America's rental income in 

2011 did not approach the loss suffered by Elks, and certainly did not 

"render[ I the property unusable or valueless" to Ad America. Stueve 

Bros., 737 F.3d at 759. Additionally, Ad America provides no evidence of 

fair market values or rental charges for similarly situated properties with 

which to determine any real decrease in the fair market value or economic 

use of the property. Thus, based on our nonregulatory analysis, we 

conclude that NDOT did not take Ad America's property within the 

meaning of the Fifth Amendment of the U.S. Constitution. 

Nevada takings jurisprudence 

Ad America insists that NDOT's actions constitute a taking 

under the Nevada Constitution and that our case law supports this 

conclusion. According to Ad America, in City of Sparks v. Armstrong, 103 

Nev. 619, 748 P.2d 7 (1987), this court adopted an expanded takings 

approach that provides for just compensation when precondemnation 

activities are unreasonable or oppressive and diminish the market value of 

property. We now clarify that our decision in Buzz Stew, LLC v. City of N. 

Las Vegas, 124 Nev. 224, 181 P.3d 670 (2008), corrected Armstrong 

inasmuch as Armstrong used our precondemnation damages standard to 

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award just compensation for a taking based on precondemnation 

activities. 

The standard employed in Armstrong originated in our 

decision, Sproul Homes of Nevada v. State, Department of Highways, 96 

Nev. 441, 611 P.2d 620 (1980). In Sproul, the plaintiff-appellant's inverse 

condemnation action for damages was dismissed for failure to state a 

claim for relief. 96 Nev. at 442, 611 P.2d at 620. We explained that to 

state an inverse condemnation action for damages, "there must be an 

invasion or an appropriation of some valuable property right which the 

landowner possesses and the invasion or appropriation must directly and 

specially affect the landowner to his injury.'" Id. at 444, 611 P.2d at 621- 

22 (quoting Selby Realty Co. v. City of San Buenaventura, 514 P.2d 111, 

114-15 (Cal. 1973)). Acknowledging that "not every decrease in market 

value as a result of precondemnation activities is compensable," the court 

also stated that when such activities are "unreasonable or oppressive and 

the affected property has diminished in market value as a result of the 

governmental misconduct, the owner of the property may be entitled to 

compensation." Id. at 444-45, 611 P.2d at 622 (citing Klopping v. City of 

Whittier, 500 P.2d 1345, 1355 (Cal. 1972)). Thus, Sproul discussed• 

unreasonable or oppressive activities that diminished market value in the 

context of precondemnation damages only. Id. 

Sproul clarified that the standards it announced and relied on 

were for claims of damages related to unreasonable and oppressive 

precondemnation activities (now called precondemnation damages), and 

not for just compensation for the fair market value of a property due to a 

taking. Id. at 442-45, 611 P.2d at 620-22. That Sproul, and necessarily 

Armstrong, employed our standard for precondemnation damages is 

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confirmed not only by the California cases upon which they relied, namely 

Klopping and Selby, but also by our later decisions relying on this 

standard and citing to Sproul. See Buzz Stew, 124 Nev. at 231 n.17, 181 

P.3d at 674 n.17.; State, Dep't of Transp. v. Barsy, 113 Nev. 712, 720-21, 

941 P.2d 971, 976 (1997), overruled on other grounds by GES, Inc. v. 

Corbitt, 117 Nev. 265, 21 P.3d 11 (2001). We therefore will not apply this 

standard to Ad America's takings claim and conclude that NDOT did not 

commit a taking under the Nevada Constitution. 12 

CONCLUSION 

Based on our analysis, we conclude that the undisputed 

material facts, as a matter of law, do not demonstrate that NDOT 

committed a taking of Ad America's property warranting just 

compensation. Therefore, we grant NDOT's writ petition. Summary 

judgment in favor of NDOT is warranted, but summary judgment in favor 

of Ad America is not. The clerk of this court shall issue a writ of 

mandamus instructing the district court to vacate its previous order and 

12Given our conclusion that a taking did not occur, we do not address 

the parties' arguments concerning the valuation date for the taking. 

SUPREME COURT 

OF 

NEVADA 

19 

(0) 1947A 9/11e/(9 
enter a new order granting summary judgment in favor of NDOT on the 

inverse condemnation cause of action. 13 

J. 

Douglas 

We concur: 

Hardesty 

LA-4.3t1 , C.J. 

CIAA J. 

Parraguirre 

Saitta 

J. 

J. 

13We limit our holding to apply through December 14, 2012, the last 

date at which the district court heard arguments and considered evidence 

from the parties. 

SUPREME COURT 

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NEVADA 20 

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GIBBONS, J., concurring: 

While I concur with the majority that NDOT was not directly 

or vicariously liable for the actions of the City of Las Vegas, this writ• of 

mandamus only adjudicates the summary judgment motions of NDOT and 

Ad America. Any claims Ad America may have against the City of Las 

Vegas or any other third parties, together with any claims against NDOT 

which matured after December 14, 2012,remain outstanding. 

Gibbons 

SUPREME COURT 

OF 

NEVADA 

(0) 1947A ce