Eminent domain in the United States

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Eminent domain in the United States refers to the power of a state or the federal government to take private property for public use while requiring "just" compensation to be given to the original owner. It can be legislatively delegated by the state to municipalities, government subdivisions, or even to private persons or corporations, when they are authorized to exercise the functions of public character. [1]

United States Federal republic in North America

The United States of America (USA), commonly known as the United States or America, is a country comprising 50 states, a federal district, five major self-governing territories, and various possessions. At 3.8 million sq mi (9.8 million km2), the United States is the world's third or fourth largest country by total area and is slightly smaller than the entire continent of Europe's 3.93 million sq mi (10.2 million km2). With a population of more than 327 million people, the U.S. is the third most populous country. Most of the country is located contiguously in North America between Canada and Mexico. The extremely diverse geography, climate, and wildlife of the United States make it one of the world's 17 megadiverse countries.

Contents

Property taken by eminent domain may be for government use or by delegation to third parties, who will devote it to public or civic use or, in some cases, to economic development. The most common uses are for government buildings and other facilities, public utilities, highways and railroads. However, it may also be taken for reasons of public safety, as in the case of Centralia, Pennsylvania, where land was taken due to an underground mine fire. [2] Some jurisdictions require that the condemnor make an offer to purchase the subject property, before resorting to the use of eminent domain. [3]

Eminent domain, land acquisition, compulsory purchase, resumption, resumption/compulsory acquisition (Australia), or expropriation is the power of a state, provincial, or national government to take private property for public use. However, this power can be legislatively delegated by the state to municipalities, government subdivisions, or even to private persons or corporations, when they are authorized by the legislature to exercise the functions of public character.

A party is a person or group of persons that compose a single entity which can be identified as one for the purposes of the law. Parties include: plaintiff, defendant, petitioner, respondent, cross-complainant, or cross-defendant. A person who only appears in the case as a witness is not considered a party.

Public utility an organization that maintains the infrastructure for a public service

A public utility company is an organization that maintains the infrastructure for a public service. Public utilities are subject to forms of public control and regulation ranging from local community-based groups to statewide government monopolies.

Terminology

The term "eminent domain" was taken from the legal treatise De Jure Belli et Pacis , written by the Dutch jurist Hugo Grotius in 1625, [4] which used the term dominium eminens (Latin for supreme lordship) and described the power as follows:

Netherlands Constituent country of the Kingdom of the Netherlands in Europe

The Netherlands is a country located mainly in Northwestern Europe. The European portion of the Netherlands consists of twelve provinces that border Germany to the east, Belgium to the south, and the North Sea to the northwest, with maritime borders in the North Sea with Belgium, Germany and the United Kingdom. Together with three island territories in the Caribbean Sea—Bonaire, Sint Eustatius and Saba—it forms a constituent country of the Kingdom of the Netherlands. The official language is Dutch, but a secondary official language in the province of Friesland is West Frisian.

Jurist Legal scholar or academic, a professional who studies, teaches, and develops law

A jurist is someone who researches and studies jurisprudence. Such a person can work as an academic, legal writer or law lecturer. In the United Kingdom, Australia, New Zealand, South Africa, and in many other Commonwealth countries, the word jurist sometimes refers to a barrister, whereas in the United States of America and Canada it often refers to a judge.

Hugo Grotius Dutch philosopher and jurist

Hugo Grotius, also known as Huig de Groot or Hugo de Groot, was a Dutch jurist. Along with the earlier works of Francisco de Vitoria and Alberico Gentili, he laid the foundations for international law, based on natural law. A teenage intellectual prodigy, he was born in Delft and studied at Leiden University. He was imprisoned for his involvement in the intra-Calvinist disputes of the Dutch Republic, but escaped hidden in a chest of books. Grotius wrote most of his major works in exile in France.

... The property of subjects is under the eminent domain of the state, so that the state or he who acts for it may use and even alienate and destroy such property, not only in the case of extreme necessity, in which even private persons have a right over the property of others, but for ends of public utility, to which ends those who founded civil society must be supposed to have intended that private ends should give way. But it is to be added that when this is done the state is bound to make good the loss to those who lose their property.

Some U.S. states use the term appropriation (New York) or "expropriation" (Louisiana) as synonyms for the exercise of eminent domain powers. [5] [6]

Condemnation

The term "condemnation" is used to describe the formal act of the exercise of the power of eminent domain to transfer title to the property from its private owner to the government. This use of the word should not be confused with its sense of a declaration that property is uninhabitable due to defects. Condemnation via eminent domain indicates the government is taking ownership of the property or some lesser interest in it, such as an easement, and must pay just compensation for it. After the condemnation action is filed, the amount of just compensation is determined in trial. However, in some cases, the property owner challenges the right to take because the proposed taking is not for "public use", or the condemnor is not legislatively authorized to take the subject property, or has not followed the proper substantive or procedural steps as required by law. Also, in some cases the right to take may be denied by the courts for lack of public necessity for the taking (required by statute), but this is quite rare.

An easement is a nonpossessory right to use and/or enter onto the real property of another without possessing it. It is "best typified in the right of way which one landowner, A, may enjoy over the land of another, B". It is similar to real covenants and equitable servitudes; in the United States, the Restatement (Third) of Property takes steps to merge these concepts as servitudes.

Other property

The exercise of eminent domain is not limited to real property. Governments may also condemn personal property. Governments can even condemn intangible property such as contract rights, patents, trade secrets, and copyrights. Even the taking by a city of professional sports team's franchise has been held by the California Supreme Court to be within the purview of the "public use" constitutional limitation, although eventually, that taking was not permitted because it was deemed to violate the interstate commerce clause of the U.S. Constitution. [7]

Contract agreement having a lawful object entered into voluntarily by multiple parties

A contract is a legally binding agreement which recognises and governs the rights and duties of the parties to the agreement. A contract is legally enforceable because it meets the requirements and approval of the law. An agreement typically involves the exchange of goods, services, money, or promises of any of those. In the event of breach of contract, the law awards the injured party access to legal remedies such as damages and cancellation.

Patent Intellectual property conferring a monopoly on a new invention

A patent is a form of intellectual property that gives its owner the legal right to exclude others from making, using, selling, and importing an invention for a limited period of years, in exchange for publishing an enabling public disclosure of the invention. In most countries patent rights fall under civil law and the patent holder needs to sue someone infringing the patent in order to enforce his or her rights. In some industries patents are an essential form of competitive advantage; in others they are irrelevant.

A trade secret is a type of intellectual property in the form of a formula, practice, process, design, instrument, pattern, commercial method, or compilation of information not generally known or reasonably ascertainable by others by which a business can obtain an economic advantage over competitors or customers. In some jurisdictions, such secrets are referred to as confidential information.

Constitutional powers and limits

The practice of condemnation was transplanted into the American colonies with the common law. In the early years, unimproved land could be taken without compensation; this practice was accepted because land was so abundant that it could be cheaply replaced. When it came time to draft the United States Constitution, differing views on eminent domain were voiced. Thomas Jefferson favored eliminating all remnants of feudalism, and pushed for allodial ownership. [8] James Madison, who wrote the Fifth Amendment to the United States Constitution, had a more moderate view, and struck a compromise that sought to at least protect property rights somewhat by explicitly mandating compensation and using the term "public use" rather than "public purpose," "public interest", or "public benefit". [9]

The Fifth Amendment includes the Public Use Clause and the Takings Clause. Some historians have suggested that these limitations on the taking power were inspired by the need to permit the army to secure mounts, fodder and provisions from local ranchers and the perceived need to assure them compensation for such takings. Similarly, soldiers forcibly sought housing in whatever homes were near their military assignments. To address the latter problem, the Third Amendment was enacted in 1791 as part of the US Constitution's Bill of Rights. It provided that the quartering of soldiers on private property could not take place in peacetime without the landowner's consent. It also required that, in wartime, established law had to be followed in housing troops on private property. Presumably, this would mandate "just compensation," a requirement for the exercise of eminent domain in general per the Fifth Amendment. [10] All U.S. states have legislation specifying eminent domain procedures within their respective territories. [11]

The power of governments to take private real or personal property has always existed in the United States, as an inherent attribute of sovereignty. This power reposes in the legislative branch of the government and may not be exercised unless the legislature has authorized its use by statutes that specify who may use it and for what purposes. The legislature may take private property directly by passing an Act transferring title to the government. The property owner may then seek compensation by suing in the U.S. Court of Federal Claims. The legislature may also delegate the power to private entities like public utilities or railroads, and even to individuals for the purpose of acquiring access to their landlocked land. Its use was limited by the Takings Clause in the Fifth Amendment to the U.S. Constitution in 1791, which reads, "... nor shall private property be taken for public use, without just compensation." The Fifth Amendment did not create the national government's right to use the eminent domain power, it simply limited it to public use. [12]

The U.S. Supreme Court has consistently deferred to the right of states to make their own determinations of public use. In Clark vs. Nash (1905), the Supreme Court acknowledged that different parts of the country have unique circumstances and the definition of public use thus varied with the facts of the case. It ruled a farmer could expand his irrigation ditch across another farmer's land (with compensation), because that farmer was entitled to "the flow of the waters of the said Fort Canyon Creek ... and the uses of the said waters ... [is] a public use." Here, in recognizing the arid climate and geography of Utah, the Court indicated the farmer not adjacent to the river had as much right as the farmer who was, to access the waters. [13] However, until the 14th Amendment was ratified in 1868, the limitations on eminent domain specified in the Fifth Amendment applied only to the federal government and not to the states. That view ended in 1896 when in the Chicago, Burlington & Quincy Railroad Co. v. City of Chicago case the court held that the eminent domain provisions of the Fifth Amendment were incorporated in the Due Process Clause of the Fourteenth Amendment and thus were now binding on the states, or in other words, when the states take private property they are required to devote it to a public use and compensate the property owner for his loss. [4] This was the beginning of what is now known as the "selective incorporation" doctrine.

An expansive interpretation of eminent domain was reaffirmed in Berman v. Parker (1954), in which the U.S. Supreme Court reviewed an effort by the District of Columbia to take and raze blighted structures in order to eliminate slums in the Southwest Washington area. After the taking, held the court, the taken and razed land could be transferred to private redevelopers who would construct condominiums, private office buildings and a shopping center. The Supreme Court ruled against the owners of a non-blighted property within the area on the grounds that the project should be judged on its plans as a whole, not on a parcel by parcel basis. In Hawaii Housing Authority v. Midkiff (1984), the Supreme Court approved the use of eminent domain to transfer a land lessor's title to its tenants who owned and occupied homes built on the leased land. The court's justification was to break up a housing oligopoly, and thereby lower or stabilize home prices, although in reality, following the Midkiff decision, home prices on Oahu escalated dramatically, more than doubling within a few years.[ citation needed ]

The Supreme Court's decision in Kelo v. City of New London , 545 U.S. 469 (2005) went a step further and affirmed the authority of New London, Connecticut, to take non-blighted private property by eminent domain, and then transfer it for a dollar a year to a private developer solely for the purpose of increasing municipal revenues. This 5–4 decision received heavy press coverage and inspired a public outcry criticizing eminent domain powers as too broad. In reaction to Kelo, several states enacted or are considering state legislation that would further define and restrict the power of eminent domain. The Supreme Courts of Illinois, Michigan (County of Wayne v. Hathcock [2004]), Ohio ( Norwood, Ohio v. Horney [2006]), Oklahoma, and South Carolina have recently ruled to disallow such takings under their state constitutions.

The redevelopment in New London, the subject of the Kelo decision, proved to be a failure and as of ten years after the court's decision nothing was built on the taken land in spite of the expenditure of over $100 million in public funds. The Pfizer corporation, which owned a $300 million research facility in the area, and would have been the primary beneficiary of the additional development, announced in 2009 that it would close its facility, and did so shortly before the expiration of its 10-year tax abatement agreement with the city. [14] The facility was subsequently purchased in 2010 for just $55 million by General Dynamics Electric Boat. [15]

Compensation

The term "Severance Damages" is used in partial takings of land. It is the award paid to the land owner for the diminution in value of the part of the property that is not taken and remains in the owner's hands. [16] American courts have held that the preferred measure of "just compensation" is "fair market value," i.e., the price that a willing but unpressured buyer would pay a willing but unpressured seller in a voluntary transaction, with both parties fully informed of the property's good and bad features. [17] Also, this approach takes into account the property's highest and best use (i.e., its most profitable use), which is not necessarily its current use or the use mandated by current zoning if there is a reasonable probability of zone change.

Tax implications

When private property is destroyed, condemned, or disposed of, the owner may receive a payment in property or money in the form of insurance or a condemnation award. [18] If property is compulsorily or involuntarily converted into money (as in eminent domain) the proceeds can be reinvested without payment of capital gains tax provided it is reinvested in property similar or related in service or use to the property so converted, no capital gain shall be recognized. [19] [20]

Bush executive order

On June 23, 2006, the first anniversary of the Kelo decision (see above), President George W. Bush issued Executive Order 13406, which stated in Section I that the federal government must limit its use of taking private property to "public use" with "just compensation" (both of which are phrases used in the U.S. Constitution) for the "purpose of benefiting the general public." The order limits this use by stating that it may not be used "for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken." [21] However, eminent domain is more often exercised by local and state governments, albeit often with funds obtained from the federal government.

Related Research Articles

Regulatory taking is a situation in which a government regulation limits the uses of private property to such a degree that the regulation effectively deprives the property owners of economically reasonable use or value of their property to such an extent that it deprives them of utility or value of that property, even though the regulation does not formally divest them of title to it.

In United States constitutional law, police power is the capacity of the states to regulate behavior and enforce order within their territory for the betterment of the health, safety, morals, and general welfare of their inhabitants. Under the Tenth Amendment to the United States Constitution, the powers not delegated to the Federal Government are reserved to the states or to the people. This implies that the Federal Government does not possess all possible powers, because most of these are reserved to the State governments, and others are reserved to the people.

Berman v. Parker, 348 U.S. 26 (1954), is a landmark decision of the United States Supreme Court that interpreted the Takings Clause of the Fifth Amendment to the United States Constitution. The Court voted 8–0 to hold that private property could be taken for a public purpose with just compensation. The case laid the foundation for the Court's later important public use cases, Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984) and Kelo v. City of New London, 545 U.S. 469 (2005).

Kelo v. City of New London, 545 U.S. 469 (2005), was a case decided by the Supreme Court of the United States involving the use of eminent domain to transfer land from one private owner to another private owner to further economic development. In a 5–4 decision, the Court held that the general benefits a community enjoyed from economic growth qualified private redevelopment plans as a permissible "public use" under the Takings Clause of the Fifth Amendment.

Just compensation is required to be paid by the Fifth Amendment to the U.S. Constitution when private property is taken. Usually, the government (condemnor) files an eminent domain action to take private property for "public use.", but when it fails to do so and pay for the taking, the owner may seek compensation in an action called "inverse condemnation." For reasons of expedience, courts have been generally using fair market value as the measure of just compensation, reasoning that this is the amount that a willing seller would accept in a voluntary sales transaction, and therefore it should also be payable in an involuntary one. However, the U.S. Supreme Court has repeatedly acknowledged that "fair market value" as defined by it falls short of what sellers would demand and receive in voluntary transactions.

Inverse condemnation is a term used in the law to describe a situation in which the government takes private property but fails to pay the compensation required by the 5th Amendment of the Constitution, so the property's owner has to sue to obtain the required just compensation. In some states the term also includes damaging of property as well as its taking. In inverse condemnation cases the owner is the plaintiff and that is why the action is called inverse – the order of parties is reversed, as compared to the usual procedure in direct condemnation where the government is the plaintiff who sues a defendant-owner to take his or her property.

Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), was a case in which the United States Supreme Court held that a state could use eminent domain to take land that was overwhelmingly concentrated in the hands of private landowners and redistribute it to the wider population of private residents.

Kohl v. United States, 91 U.S. 367 (1875), was a court case that took place in the Supreme Court of the United States. It invoked the Fifth Amendment to the United States Constitution and is related to the issue of eminent domain.

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), was a case in which the Supreme Court of the United States held that whether a regulatory act constitutes a taking requiring compensation depends on the extent of diminution in the value of the property.

Oregon Ballot Measure 37 is a controversial land-use ballot initiative that passed in the U.S. state of Oregon in 2004 and is now codified as Oregon Revised Statutes (ORS) 195.305. Measure 37 has figured prominently in debates about the rights of property owners versus the public's right to enforce environmental and other land use regulations. Voters passed Measure 49 in 2007, substantially reducing the impact of Measure 37.

2006 Arizona Proposition 207

Arizona Proposition 207, a 2006 ballot initiative officially titled the "Private Property Rights Protection Act", requires the government to reimburse land owners when regulations result in a decrease in the property's value, and also prevents government from exercising eminent domain on behalf of a private party. It was approved by a 64.8% margin. The land use portion of this proposition is similar to Oregon's 2004 Ballot Measure 37, and the eminent domain portion is similar to initiatives advanced in numerous states following the United States Supreme Court's Kelo v. City of New London decision.

The Castle Coalition is a network of U.S. homeowners and citizen activists determined to stop the abuse of eminent domain in their communities, that is, the taking of private property by the government in order to give it to another private individual. The organization takes its name from the principle that Americans' homes or businesses should be their castles, that is, places where they are safe and free from abusive government power. The principle has been part of Anglo-American legal tradition since Edward Coke famously stated, "... a man's house is his castle".

Kimball Laundry Co. v. United States, 338 U.S. 1 (1949), affirmed the principle set forth in The West River Bridge Company v. Dix et al., 47 U.S. 507 (1848); that is, that intangible property rights are condemnable via the eminent domain power, and that just compensation must be given to the owners of such rights.

Commonwealth v. Alger, 61 Mass. 53, was decided by the Supreme Judicial Court of Massachusetts in 1851. The majority opinion was written by Justice Lemuel Shaw.

Empress Casino Joliet Corporation v. Giannoulias, 231 Ill.2d 62 (2008), is a case from Supreme Court of Illinois in which four casinos challenged a tax imposed by Public Act 94-804. The Act was challenged on the grounds that it was an unconstitutional taking. The Court held categorically that a tax could never be a taking within the meaning of the Fifth Amendment to the Constitution.

Public use is a legal requirement under the takings clause of the Fifth Amendment of the U.S. Constitution, that owners of property seized by eminent domain for "public use" be paid "just compensation."

Chicago, Burlington & Quincy Railroad Co. v. City of Chicago, 166 U.S. 226 (1897), incorporated the Takings Clause of the Fifth Amendment into the Due Process Clause of the Fourteenth Amendment by requiring states to provide just compensation for seizing private property. It was the first Supreme Court case that incorporated part of the Bill of Rights and applied it to a state or local government. Until then, the entire Bill of Rights was considered by the Supreme Court to apply only to the federal government, not state governments.

United States v. Jones, 109 U.S. 513 (1883), is an important decision by the United States Supreme Court which provides the power to take private property for public uses, in the exercise of the right of eminent domain, to the government of the United States. However, once the government exercises of the right of eminent domain and after a fair determination of the amount of compensation, any unforeseen damage to the property as a result of activities prior to the purchase but realized only afterwards is to be compensated by the government per any legislative decree.

Knick v. Township of Scott, Pennsylvania, No. 17-647, 588 U.S. ___ (2019), was a case before the Supreme Court of the United States dealing with compensation for private property owners when the use of that property is taken from them by state or local governments, under the Due Process Clause of the Fifth Amendment to the United States Constitution. The immediate question asks if private land owners must exhaust all state-offered venues for mediation before seeking action in the federal courts. The case specifically addresses the Court's prior decision from the 1985 case Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, which had previously established that all state court venues must be exhausted first, but which has since resulted in several split decisions among circuit courts. The Supreme Court ruled in June 2019 to overturn part of Williamson County that required state venue action be taken first, allowing taking-compensation cases to be brought directly to federal court.

References

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  2. "Final Centralia, Pa., residents can live out lives in town atop burning mine". Associated Press. 31 Oct 2013. Retrieved 17 May 2017.
  3. "State of Texas Landowner's Bill of Rights" (PDF). The Attorney General of Texas. Office of the Attorney General of Texas. Retrieved 17 May 2017.
  4. 1 2 Nowak, John E.; Rotunda, Ronald D. (2004). Constitutional Law (Seventh ed.). St. Paul, MN: Thomson West. p. 263. ISBN   0-314-14452-8.
  5. "New York Code, Public Lands, Art. 2, Sec. 27, Appropriations". NYSenate.gov. The New York Senate. Retrieved 17 May 2017.
  6. "Louisiana Revised Statutes, Title 19, Expropriation". Louisiana State Legislature. Retrieved 17 May 2017.
  7. City of Oakland v. Oakland Raiders, 32 Cal. 3d 60 (1982).
  8. Jefferson, Thomas. "A Summary View of the Rights of British America". Liberty Online. Retrieved 12 June 2017.
  9. Benson, Bruce L. (Winter 2008). "The Evolution of Eminent Domain" (PDF). The Independent Review. XII (3): 423.
  10. "Takings of Private Property". Constitutional Conflicts. University of Missouri-Kansas City. Retrieved 12 June 2017.
  11. Larson, Aaron. "Eminent Domain". ExpertLaw. Retrieved 12 June 2017.
  12. "National Eminent Domain Power". FindLaw. Thomson Reuters. Retrieved 12 June 2017.
  13. "Clark v. Nash (1905), 198 U.S. 361, 25 S.Ct. 676, 49 L.Ed. 1085". Google Scholar. Retrieved 12 June 2017.
  14. "Eminent Domain Outrage in Connecticut: Pharmaceutical Giant Pfizer to Leave New London, Site of Major Housing Battle". Democracy Now!. 13 November 2009. Retrieved 12 June 2017.
  15. "Pfizer sells NL headquarters to Electric Boat". The Day Publishing Company. 30 December 2010.Missing or empty |url= (help)
  16. Della-Pelle, Anthony F.; DeAngelis, Richard P. (May 2015). "Severance Damages in Partial Takings Cases: Lessons Learned and Future Considerations" (PDF). The Practical Real Estate Lawyer. American Bar Association. Retrieved 12 June 2017.
  17. Osborne M.Reynolds, Local Governments Law, Second Edition, West Group, Min 2001, ISBN   0-314-23738-0, p. 505
  18. Legal Information Institute at Cornell Law School. "United States Code: Title 26,1033. Involuntary Conversions" . Retrieved 20 July 2010.
  19. "26 CFR 1.1033(a)-1 - Involuntary conversions; nonrecognition of gain". Legal Information Institute. Cornell Law School. Retrieved 12 June 2017.
  20. Ravencraft, Brian (28 August 2015). "Understanding eminent domain". Ohio's Country Journal. Retrieved 12 June 2017.
  21. "Executive Order 13406: Protecting the Property Rights of the American People". 2006-06-23., 71 FR 36973

Further reading