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Eminent Domain: A Threat, But Reasons to Be Optimistic

Published on: 08:58AM Feb 12, 2013

Eminent domain is a necessary evil in modern society.  Governments need to acquire land to build highways, sewage systems, and water delivery systems.  Utilities need eminent domain power to deliver electricity and telephone services.  We allow eminent domain takings to serve public purposes.  In exchange, the Fifth and Fourteenth Amendments of the U.S. Constitution guarantee that landowners receive just compensation for land that is condemned in eminent domain proceedings.

However, what constitutes a "public purpose" has been the subject of much debate in recent years.  It is generally accepted that governments can take property for public purposes such as building roads, schools, and government offices.  Utilities are also provided the right to take land or easements to provide necessary services.  More controversially, governments often provide themselves the ability to condemn property deemed as "blighted" and sell it to developers to encourage gentrification and urban revitalization. 

By far, the most controversial definition of a public purpose is "economic development."  Economic development is a vague purpose that is capable of justifying nearly any taking as suitable for a public purpose.  In 2005, the U.S. Supreme Court was faced with deciding the constitutionality of a taking for economic development reasons in Kelo v. City of New London.  In the Kelo case, a Connecticut town condemned several homes surrounding a public park.  The privately-owned land was condemned with the intention of handing it over to another private party.  The condemnations were part of a larger scheme to entice Pfizer to locate some office buildings in New London.  To the chagrin of property rights proponents, the Supreme Court held that economic development could be considered a proper public purpose in a 5-4 decision.  (Unfortunately, the property was condemned in vain.  Pfizer was not enticed and the property now serves as a landfill for yard waste).

A Reason for Optimism

Unsurprisingly, the Supreme Court’s decision in Kelo was met with nearly universal outrage.  States quickly sprang into action to re-write their statutes and constitutions to provide stronger protection for private property owners.  Prior to the Kelo decision, only 8 states barred themselves from using economic development as a basis for eminent domain condemnation.  Now, awakened to the potential disaster posed by the Kelo decision, 44 states have limited their eminent domain laws to exclude economic development as a basis for condemnation.

Virginia (apologies for bragging on my home state) may be at the forefront of providing property owners protection in cases of eminent domain.   In 2012, 74% of Virginians voted to amend their constitution to dramatically change how eminent domain is conducted in the state.  Not only did the constitutional amendment permanently enshrine the prohibition of Kelo-like takings, it also requires governments and utilities to only condemn portions of property that are essential to carrying out the public purpose.  Furthermore, governments and utilities are required to compensate landowners for "lost profits and access" resulting from a condemnation.  This means that governments must not only compensate a landowner for the actual land, but also account for what the land meant to a particular individual or business.  Faced with these higher costs, governments and utilities are going to make more calculated decisions regarding what is actually necessary to satisfy a public purpose.  Also, the total costs of an eminent domain condemnation will be properly borne by the responsible party, not an innocent landowner.

While eminent domain is often thought of as an issue affecting land on the urban fringe, individual farmers often find themselves in a situation where eminent domain condemnations and easements drastically alter the functionality of their property.  For example, construction of greenways and public trails often involves takings of private lands.  While these trails certainly provide a public good, they do so at the expense of private property owners.  I look for more states to take such strong actions similar to Virginia’s amendment to stand up for landowner’s rights.  Idaho’s senate recently failed to prevent their state government from protecting landowners from takings for this purpose.  However, it is encouraging that this matter is attracting the attention of voters and legislators.  In time, the will of the people will force governments to recognize stronger private property rights.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer

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