RealClearPolitics - Commentary - How Eminent Domain Ran Amok by Carla T. Main

PAGE 2 OF 5
Go Back

Now that the economic development takings have been blessed by the high court, they may well increase in number despite all the huffing and puffing about putting a stop to them in the aftermath of Kelo.

Of course, if you are wealthy, or even upper middle class, there is little chance this sort of catastrophic taking will befall you. The logic of an economic development taking is that knocking down what exists now and building something fancier will increase the municipality’s tax base. Not surprisingly, economic development takings disproportionately affect the poor and the working class. That has been the observation of Jane Jacobs, the doyenne of urban planning who submitted an amicus brief in support of the Kelo petitioners.

Indeed, the Kelo case brought together an odd coalition of political bedfellows. The petitioners were represented by the Institute for Justice, which has been waging a vigorous anti-eminent domain and property-rights agenda for some years now. They were supported by two dozen amicus curiae briefs from groups as diverse as the naacp, the Goldwater Institute, aarp, the Cato Institute, and the Becket Fund for Religious Liberty. They argued, each in turn, that the practice of taking private property with the sole aim of turning it over to another private party who will put it to a higher revenue-producing use unfairly affects the poor, the elderly, racial and ethnic minorities, and religious organizations (because their properties don’t produce revenue). The outrage over the decision has been equally surprising in the way it has cut across political lines.

It is fair to ask how we got here. Like many other stories that end in tragedy, this one began with the best of intentions.

The fifth amendment includes at its tail end a passage known as the takings clause: “. . . nor may private property be taken for public use without just compensation.” The takings clause is not an express grant of power. It is a limitation on an implied right of the government to take private property. The Constitution doesn’t tell us much about how government is to be constrained in its exercise of this power. It tells us only that the taking must be for a “public use” and that “just compensation” must be paid. Like much in the Constitution, the term “public use” is maddeningly vague. Nonetheless, the term did not constitute fighting words until quite recently. But whether it is the province of tweedy academics — as it was for much of the twentieth century — or incitement to riot, as it may soon become, its definition is crucial, for it is the litmus test of what is and is not a constitutionally permissible taking.

Wading in the waters of the eminent domain debate is an exercise in cognitive dissonance, with opinions about the necessity for eminent domain (and, by extension, economic development takings) in real estate development at polar extremes. To those who favor its vigorous use — primarily urban planners, municipal government officials, and real estate developers — eminent domain is a matter of land assemblage, plain and simple. Land assemblage without it, they argue, is impossible. Improving outdated or even dangerous buildings and infrastructures is the goal, and private owners are the obstacle. Eminent domain is an efficient and orderly way to clear large, contiguous parcels of land. It is the only way to deal with the problem of holdouts. There is nothing to be ashamed of in using eminent domain to improve communities. The legislatures that vote for economic development takings see the improvement of the tax base as a natural extension of the public use clause. In the end, it all boils down to the price paid for the land. Moreover, the use of eminent domain often means, as a practical matter, that the local municipality underwrites a substantial portion of the acquisition costs, making it an attractive alternative to developers.1

At the other end of the spectrum is the libertarian position. In these circles one hears eminent domain described as the “despotic power,” overused and mired in greed and corruption. The public use clause of the Constitution was never meant to be taken this far, they argue. Public use means actual, perpetual ownership by the government for a clear and unequivocal public purpose. Examples would include a public road, where people have a permanent right of way, or a fort or post office permanently maintained and used exclusively by government actors (with exceptions for private entities that run public utilities).

Such a strict interpretation is a far cry from the definition of public use to be found in the case law, which gave way long ago in American jurisprudence — well before the Kelo decision — to a far mushier idea of public benefit or public purpose. The federal government has been taking private property and turning it over to other private parties for a variety of uses since the early days of the republic. As far back as the early part of the nineteenth century, the government recognized that, on occasion, private interests must give way where the greater good is concerned, even when this means compromising one party’s private property interests so that another’s may dominate. This doctrine first emerged in connection with the Mill Acts, statutes passed in many states to allow grist mills to operate. The mills were privately owned, but the government closely regulated their fees. Takings related to these early mills were deemed justified in much the same way that we view takings related to public utilities today.2 The involvement of the government, plus the widespread and immediate benefit to the public, softened the blow of a taking in which the ultimate owner was to be another private party. The United States was a rural economy, and the farmers, after all, had to get their corn ground up somewhere in order to take it to market or to consume it themselves.

Later on, some mills began to cause greater consternation for their neighbors. Private owners who happened to have land on a river set up dams to harness the power of water for use not only in grist mills, but also for saw and iron mills (whose advantage to the general public was less obvious), or even just to be ready should a local need for water power arise. In the process, though, they flooded their upstream neighbors.

Americans being Americans, lawsuits ensued. In those cases, we find nineteenth-century discussions of public use that by no means rely on a physical occupation of the land by the government or by the public in order to justify a taking. As early as 1832, the court in Boston and Roxbury Mill Corp. v. Newman ruled that a Mill Act that allowed a landowner to flood his upstream neighbors — so long as he compensated them — was constitutional. The court in the Newman case ruled that public use did not necessarily require direct use by the public so long as the use of the land conferred a benefit to the public.

Since Mill Acts were a matter of state law, the results when they were challenged differed from state to state. For example, in Ryerson v. Brown, the Michigan Supreme Court in 1877 hewed to a very narrow application of public use, requiring that the statute provide for a “use to be public in fact . . . contain[ing] provisions entitling the public to accommodations.”3 In an ironic twist, the same court 100 years later would be among the first in the nation to cast such strictures to the wind, ushering in an age of economic development takings that would sweep across the country with its 1981 decision in a notorious case known as Poletown, discussed below.

CONTINUED... 1 | 2 | 3 | 4 | 5 |

1 Samuel R. Staley and John P. Blair, “Eminent Domain, Private Property, and Redevelopment: An Economic Development Analysis,” Policy Study 331 (Reason Foundation, February 2005).

2 Henry J. Munneke, “Eminent Domain: Lessons From the Past,” Office of Real Estate Research Letter, (University of Illinois at Urbana-Champaign, Spring 1991). Available at www.business.uiuc.edu/orer.v5-2-1-pdf.

3 Ryerson v. Brown, 35 Mich. 333, 338 (1877).