Eminent Domain is the Constitutional authority for a government to take private property for public use. The process of this taking is called condemnation. Without this power, citizens would be able to refuse selling property that is needed for public use (e.g. building of an interstate), or raise prices extremely high. However, there are two limitations to eminent domain. First, the taking must be for public use. Second, the property owner must be justly compensated for the taking (fair market value). See U.S. Const. Amend. 5.
Defining Public Use
Taking for public use can be done in multiple ways. Obviously, a taking to turn property in to a park or interstate is easy to define. However, the real question arises when we consider whether public use includes taking private property and transferring it to another private ownership for the sake of growing the community. Thus, see the following case.
Hawaii Housing Authority v. Midkiff
467 U.S. 299 (1984).
Midriff was the plaintiff. They lost at trial but won on appeal. Hawaii then appealed to the Supreme Court.
Question
Can the government take private property and sell it to another private owner for public purposes?
Rule
As long as there is a governmental rational (rational basis test) to meet police power objectives, the taking may be justified for public use.
Holding
Here, the taking meets the rational basis test, reversed.
Facts
Hawaii, prior to colonization was owned by several oligarchy families. In other words, land was distributed to Hawaiian royalty. After colonization, nearly half of the state was owned by about 75 individuals. The cluster of such few owners thus drove the prices for purchase really high. As such, most property owners chose to lease single-family homes, rather than pay the federal taxes that would arise from a sale.
To address this issue, Hawaii passed a law that would allow leased families the opportunity to purchase the home or property instead of leasing. The goal was to diversify property ownership with the hope of decreasing property prices due to the more diverse ownership.
Analysis
Similar to zoning, the Court is willing to defer to the judgment of state legislatures as an exercise of their police powers.. As long as the state has a valid and rational reason for the taking, it may be considered public use. In the present case, the goal was to diversify ownership with the intent to decrease property costs. Even if the act is unlikely to meet the goal, the court is not in a position to speak about the advisability of the policy. Consequently, the taking was for a public use.
Additional Notes
The issue in this case is “can the government condemn property from private owner A and give it to private owner B.” Notice that the Constitution says that the taking must be for a public use.
Public use is defined as: “The ‘public use’ requirement is thus coterminous with the scope of a sovereign’s police powers.” In other words, the public use is defined as anything that the police powers would allow. Thus, the court applies the rational basis test.
A situation that would not satisfy the public use would be corruption (e.g. taking to give to one really influential individual).
Eminent domain statutes are passed by the legislature. Because the court applies a rational basis test, they strongly defer to the legislature, even if they believe the statute promotes bad policy.
Berman v. Parker
This earlier case allowed eminent domain to be used to clean up a slum area by selling it to other private developers.
Scope of Public Use
Kelo v. City of New London
545 U.S. 469 (2005).
At trial, some of the taking was allowed while others were not. Both parties appealed. On appeal, all the taking was allowed. As such, Kelo appealed.
Question
Can a government take property from citizen A and give to citizen B for economic development?
Rule
As long as there is a comprehensive plan, the public use clause is expansive enough to allow the government to take from citizen A and give to citizen B for economic development. State’s are allowed to pass more restrictive laws if they choose.
Holding
The condemnation here was for a public use, affirmed.
Facts
The City of New London was in economic distress. For decades, their economic situation became more dire. Desperate to spark new life into the city, the State and Local officials were able to develop a comprehensive plan that would include Pfizer to come into the community. This process would create jobs, increase tax revenues, and ultimately regain life in the community. As part of this comprehensive plan, there were 7 plots of land that was going to be used for a river walking trail, marina development, parking lots, and office buildings.
The Kelos and others lived on those 7 plots and wished to preserve their homes. As such, when the City approved the plan, the Kelos sued, saying that there was no public purpose, the property being taken for private development.
Analysis
Here, the majority is focused on previous cases that say private land may be taken and given to private individuals (see Midkiff). Ultimately, the plan is comprehensive and outlines the purposes for the development. Economic development is one of those purposes the would be a viable reason to condemn the property.
However, the concurrence agrees that the property in this case can be taken by eminent domain. The only caveat is that the property can be taken because it was not taken expressly to benefit a specific private owner.
Additionally, the dissent argues that this is too expansive of an interpretation of public use. Ultimately, the majority opinion allows a city to take for any reason at all as long as there is a slight upgrade to the use of the land. In other words, the dissent argues that the majority opinion takes out the public use requirement.
Additional Notes
The majority simply believes that they are applying Berman and Midkiff. In addition to the majority, the concurrence is saying that there should be a heightened sense of scrutiny when the plan is simply there for economic development. So, the concurrence would ask if the intention of the project is to benefit a specific party. If there is a specific party that is named, then the concurrence would ask if the public benefit was sufficiently high (balancing test).
However, the main argument from the dissent is that this case is not consistent with Midkiff. In Midkiff, the taking was to remove an inherent harm. Here, the ownership was doing no harm. Essentially, the majority’s opinion would expand public use to be applied in any situation as long as there was a slight improvement.
Takeaway:
- Economic development is a recognized public use.
- This opinion is controversial.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
