April 25, 2012

Eminent Domain Vs. Economic Development

Over the past few weeks, I’ve had some questions asked about my view on the use of eminent domain for the purpose of private economic development. As someone who has been on the receiving end of such an attempted action, I can tell you I’m not sold on the concept, regardless of whether or not it is technically “legal” in the eyes of the courts. It’s a slippery slope and one I would prefer NOT to slide down.

Before I get too involved, let’s go back and look at some history. The concept of eminent domain isn’t new. The idea is mentioned in the Fifth Amendment of the U.S. Constitution. That amendment contains a number of protections related to abuse of government authority. From it we gain protections dealing with double jeopardy, the need for a grand jury, protections from self-incrimination, the idea of due process, and our topic today, “improper takings”. The last words of the amendment “…nor shall private property be taken for public use, without just compensation” give the basis for the concept (and restrictions) specific to eminent domain.

Court decisions over the years have attempted clarified our founding father’s ideas. The words “just compensation” have never really been a problem. The U.S. Supreme Court has repeatedly held that such compensation is usually “fair market value” at the time of the taking (with some rare exceptions). That’s pretty straight forward. In simply terms, if the government “takes” your land, you’re going to get paid for what is taken. That’s certainly the right thing to do. But the bigger issue (and to some, the concern) relates more to what is meant by the words “public use”.

In my research, that term public use has historically been about benefiting the public interest or the public welfare. Things such as schools, highways, bridges, etc. typically come to mind when people refer to public use. That’s pretty straight forward. And while none of us ever “want” our land taken, I think we can certainly agree those would be areas where “public use” applies and could be justified as a last resort.

But in 2005, the U.S. Supreme court, in a 5-4 decision, expanded the concept and ruled that the powers of state and local governments could in fact take private property for “private” commercial development if that planned development has a “public purpose” (such as new jobs or increased tax revenue). It’s that ruling that has some concerned that by expanding “public use” to mean “public purpose”, it may open the door to abuse. As an example, using eminent domain to take land for a private strip mall is not something I’d view as having a “public purpose” - it goes too far – even if members of the “public” can use it and such use could create jobs or expand tax revenues. To me, that is NOT what our founding fathers intended. If a land owner doesn’t want to sell to another private individual or group for such a development, move on and find land elsewhere. Having government intervene isn’t the solution.

The good news is that most eminent domain actions will continue to involve land where “public use” is purely the issue. But just knowing the potential is there, I understand the reason some have a concern.

So to again answer the question posed to me in the first paragraph - I believe the 2005 ruling opens the door for abuse. And unless a very good case is made and a clear “public” benefit is shown, I’m not one to believe such an action is proper – even if it’s technically “legal”. Free markets and private negotiations are the best solution to settling those types of disputes. Going to the government for “help” isn’t an option I’d recommend.

Thanks again to all of you for your continued support. I hope to see some of you at the Bright Futures golf tournament Friday or at the Duck’s Unlimited banquet Saturday. Until next time, stay the course, keep the faith, and God bless Neosho!