Two cert petitions have recently been filed in the US Supreme Court on eminent domain. 

Didden v. Village of Port Chester, is a Kelo follow up.  The case is detailed on the Institute for Justice’s web site, which includes links to the petition and amicus briefs urging granting of the petition.  The Question Presented in the case raises two interesting issues. 

The first is whether Kelo precludes judicial review of public use claims if a condemnation takes place “within an integrated development plan.”  Recall that in Kelo, the majority took great pains to highlight the fact that the condemnation of Mrs. Kelo’s house took place within a detailed and apparently comprehensive plan.  The majority opinion relied on the Rosetta Stone zoning case, Euclid v. Ambler Realty Co., and implied (if not held) that the Kelo taking was just fine because of the detailed process that allegedly preceded it.  Like zoning, it appeared that the majority was trusting the result of the procedures that resulted in a taking simply because it was comprehensive, thus equating public use analysis with substantive due process analysis.  The Questions Presented:

     In Kelo v. City of New London, this Court held that economic development within an integrated development plan was a “public use” under the meaning of the Fifth Amendment to the U.S. Constitution.  Does Kelo therefore completely preclude all claims of private purpose takings within an integrated development plan area, including a claim that eminent domain was used for financial extortion and the purely private financial gain of a single party?

     What limits if any do the Fifth and Fourteenth Amendments to the U.S. Constitution place on demands for cash in exchange for refraining from the use of eminent domain?

The second issue is a convergence of Nollan and Kelo, asking the Court what standards should apply to extortionate demands, backed up by eminent domain, rather than permit denial.  The amicus brief I filed in Kelo anticipated this issue somewhat, since it suggested the Court apply the Nollan-Dolan standard for examining monetary exactions, to public use analysis:

     In undertaking the review of public use issues reserved to the judiciary in Midkiff, 4687 U.S. at 240, this Court should adopt the same heightened scrutiny for exercises of the eminent domain power justified by promises of a better economy as it has established for suspect regulatory takings: a taking justified only by economic development is invalid if it fails to substantially advance a legitimate state interest.

The second eminent domain petition was filed in Detroit International Bridge Co. v. United States.  The Questions Presented in that petition do not involve public use, but rather the other main issue in eminent domain cases, that of Just Compensation:

1.  Whether requiring courts to apply the interest rate set in the Declaration of Taking Act 40 U.S.C. § 3116, to determine the compensation due when the government delays payment of compensation for private property taken under the Act violates the Just Compensation Clause and the separation of powers when applying the statutory interest rate would materially undercompensate the landowner.

2.  Whether a court’s reduction of the amount of compensation paid to a property owner based on the fact that the intended taking had been made public at the time the owner purchased the property contravenes this Court’s repeated holding that the just compensation due to a landowner under the Fifth Amendment is not to be affected by the government’s decision to condemn the property. 

At oral argument in Kelo, several justices, most notably Justice Kennedy expressed their concern that the Court should examine the fairness of the compensation rules in eminent domain, perhaps as a way of counterbalancing the grossly inequitable law that favors the condemnor in public use questions.  We’ll see.

     Continue Reading ▪ Two New Eminent Domain Cert Petitions

Professor Ilya Somin has posted a summary of a recent Fifth Circuit decision upholding an exercise of eminent domain for economic development because it was in accordance with an integrated plan.

Justice Stevens’ Kelo opinion took great effort to analogize New London’s exercise of eminent domain with the Euclidean zoning process.  Those of us who practice land use law know that in order to pass Constitutional muster, zoning must be neutral, transparent, and comprehensive, or else it is subject to a due process challenge. The case that gave us this standard and upheld zoning, and is still the touchstone of comprehensive planning, is the 1926 case Village of Euclid v. Ambler Realty Co., upholding citywide zoning against a due process challenge.

The limitation on the government’s power, and the basis for a court’s deferral to the legislative judgment of the legislative branch, is that zoning of property is supposedly comprehensive and part of a larger plan.  In the absence of comprehensiveness, zoning would violate due process.  Justice Stevens refers to Euclid expressly as a reason why the taking in Kelo was for a public use/purpose.  Look to the language in his recitation of the facts, where he repeatedly emphasizes the “neighborhood meetings,” the “integrated development plan,” the “carefully considered development plan,” and that “The City has carefully formulated an economic development plan,” etcetera.

Property owners can still challenge a zoning ordinance as a due process violation, or as “spot zoning,” which has constitutional overtones.  A good example is the 1996 case from the New York Court of Appeals, Town of Orangetown v. Magee, 665 N.E.2d 1061, where the court held that public opposition to a vested development project was the reason for the town’s behavior, not comprehensive planning.

In the post-Kelo world will property owners have to prove “spot takings” in order to prevail under the Public Use clause of the Fifth Amendment?

     Continue Reading ▪ Spot Takings and Kelo

An earlier version of this commentary was published in the Honolulu Advertiser

Do you mean to tell me, Katie Scarlett O’Hara, that Tara, that land, doesn’t mean anything to you? Why, land is the only thing in the world worth working for, worth fighting for, worth dying for, because it’s the only thing that lasts!

– “Gone With the Wind”

Maybe not. In June 2005, the U.S. Supreme Court approved the radically un-American notion that you own your property only as long as someone more influential doesn’t want it.

In Kelo v. City of New London, the Court allowed a Connecticut redevelopment agency to use eminent domain to seize perfectly good homes in a working-class neighborhood and turn them over to a private developer. The homes will be demolished, replaced by a fashionable hotel, health club and marina to support a neighboring facility for the pharmaceutical company, Pfizer.

Eminent domain is the government’s power to confiscate private property against the will of the property owner. Using eminent domain, completely innocent families can be forced from their homesteads and established businesses shut down against their will. Incredibly, a property owner is nearly powerless to prevent it. It is, quite literally, the “offer you can’t refuse,” and it is most often the elderly, the poor, minorities, and others who lack money and political pull whose property ends up targeted for eminent domain.

This power is exercised not only by elected officials, but also by those who have no incentive to listen to the voice of the voters, such as redevelopment agencies, utility companies, and even private developers. Once they set their sights on property, the mere threat of eminent domain is usually enough to make an unwilling owner accept a “Godfather” offer – agree to our fire sale terms or we’ll have the government take your land.

Scarlett O’Hara thankfully never met Don Corleone.

To limit this potential for abuse, the U.S. Constitution’s Fifth Amendment permits eminent domain only if the owner receives “just compensation” and only if the property is taken for “public use.”

Common sense and tradition tell us that “public” uses are schools, roads, parks, and military bases, while hotels, health clubs and corporate parks are private uses.

But in the Kelo case, the redevelopment agency hypothesized that even though the homeowners’ property ended up in a developer’s hands, evicting the homeowners and upscaling the neighborhood would increase the city’s tax revenues and “create jobs.” And the mere promise of incidental public benefit, the Court agreed, is all the U.S. Constitution requires for “public use.”

If economically modest but still viable homes and small businesses can be bulldozed whenever politicians and their friends can put your property to more grandiose use, is it now open season on property owners?

Not quite, and state and county bureaucrats and those eyeing property still must exercise restraint for two reasons.

First, the Court left open the possibility that a taking of property which results from a bogus process will not pass “public use” scrutiny. Property owners remain free to show where claims of “public use” have been unduly influenced by private interests. “A court . . . should strike down a taking that, by a clear showing, is intended to favor a particular private party, with only incidental or pretextual public benefits.” Backroom deals to take another’s property are not in the public interest.

Second, Kelo at best only reduces federal involvement in the equation. The U.S. Constitution sets minimum standards, and state constitutions and the state courts which enforce them, remain free to provide greater protection to homeowners and others threatened with eminent domain.

And many do just that. Six states have already recognized their citizens have more rights under their constitutions. Last year, for example, the Michigan Supreme Court struck down an attempted taking justified by economic development. Property owners in Michigan have more rights than property owners in Connecticut.

So Kelo simply shifts the focus away from federal law and federal courts. State constitutions and state courts are now the primary forums to protect property rights from eminent domain abuse.

The stage is already set. Hawaii’s Constitution requires “public use,” and when applying that restriction, Hawaii state courts are not bound by restrictive federal interpretations of the U.S. Constitution. The U.S. Supreme Court’s failure in Kelo presents Hawaii courts with the opportunity to join Michigan, Arizona, Washington, and other states and enforce our own “public use” requirement in the manner plainly intended.

But individual rights such as property should not be dependent upon a court’s interpretation, and the ultimate power to prevent eminent domain abuse remains with the people. Local officials must understand that the type of action taken by New London’s redevelopment agency is not acceptable to the people of Hawaii. And if officials do not respond, the people have the power to clarify our state constitution to expressly prohibit eminent domain from being used to take private property from one owner and give it to another.

Home ownership, and the ability to protect your property from forced sale to the highest bidder under government cover is an issue that everyone – regardless of means or political persuasion – can and should get behind.

   Continue Reading ▪ Eminent Domain: The Offer You Can’t Refuse