eminent domain

eminent domain

eminent domain, the right of a government to force the owner of private property sell it if it is needed for a public use. The right is based on the doctrine that a sovereign state has dominion over all lands and buildings within its borders, which has its origins in the landholding system under feudalism. Eminent domain is implicitly enshrined in the U.S. Constitution, which in the Fifth Amendment requires that private property not be taken for public use without just compensation. The process of acquiring private property by eminent domain is known as condemnation.

Eminent domain traditionally has been used by governments to condemn land for building roads, schools, goverment buildings, and the like. The right of eminent domain may also be assigned to public and private corporations engaged in activities regarded as benefiting the public, such as the development of port facilities, the building of a canal or railroad, or the redevelopment of a blighted area. In 2005 the U.S. Supreme Court, in Kelo v. the City of New London, ruled that the Connecticut city had the right to condemn unblighted private property and transfer it to another private owner for development even if the only public benefit might be increased employment and tax revenues. Public outcry over the decision subsequently led most states to adopt legislation or constitutional amendments that limited, in varying degrees, the ability of state and local governments to use eminent domain to condemn private property for use by a private corporation. At the same time, some government officials and private developers raised concerns over how the laws and amendments would affect their ability to undertake large-scale development projects.

See also public ownership.

Government power to take private property for public use without the owner's consent. Constitutional provisions in most countries, including the U.S. (in the 5th Amendment to the Constitution), require the payment of just compensation to the owner. As a power peculiar to sovereign authority and coupled with a duty to pay compensation, the concept was developed by such 17th-century natural-law jurists as Hugo Grotius and Samuel Pufendorf. Seealso confiscation.

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Eminent domain (United States), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia) or expropriation (South Africa and Canada) in common law legal systems is the inherent power of the state to seize a citizen's private property, expropriate property, or rights in property with due monetary compensation, but without the owner's consent. The property is taken either for government use or by delegation to third parties who will devote it to public or civic use or, in some cases, economic development. The most common uses of property taken by eminent domain are for public utilities, highways, and railroads. Some states require that the government body offer to purchase the property before resorting to the use of eminent domain.

The legal doctrine of eminent domain, like the doctrine of seizure of contraband, allows expropriation of property within the existing system of law. Otherwise, expropriation may imply either a criminal or a revolutionary act.

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 real property, generally a building, has become so dilapidated as to be legally unfit for human habitation due to its physical defects. This type of condemnation of buildings (on grounds of health and safety hazards or gross zoning violation) usually does not deprive the owners of the title to the property condemned but requires them to rectify the offending situation or have the government do it for the owner at the latter's expense.

Condemnation via eminent domain indicates the government is taking ownership of the property or a lesser interest in it, such as an easement. In most cases the only thing that remains to be decided when a condemnation action is filed is the amount of just compensation, although in some cases the right to take may be challenged by the property owner on the grounds that the attempted taking is not for a public use, or has not been authorized by the legislature, or because the condemnor has not followed the proper procedure required by law.

The exercise of eminent domain is not limited to real property. Governments may also condemn personal property, such as supplies for the military in wartime, franchises; this includes intangible property such as contract rights, patents, trade secrets, and copyrights.

History

After his victory in 1066, William the Conqueror seized virtually all land in England. Although he maintained absolute power over the land, he granted fiefs to landholders who served as stewards, paying fees and providing military services. During the Hundred Years War in the 13th century, Edward III used the Crown's right of purveyance for massive expropriations. Chapter 28 of the Magna Carta required that immediate cash payment be made for expropriations. As the king's power was broken down in the ensuing centuries, tenants were regarded as holding ownership rights rather than merely possessory rights over their land. In 1427, a statute was passed granting commissioners of sewers in Lincolnshire the power to take land without compensation. After the early 1500s, however, Parliamentary takings of land for roads, bridges, etc. generally did require compensation. The common practice was to pay 10 per cent more than the assessed value. However, as the voting franchise was expanded to include more non-landowners, the bonus was eliminated.

The practice of condemnation was transplanted into the American colonies. 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. 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.

Terminology

At the time the United States was created, it and the several states continued to use the British common law, including the principle of eminent domain. The term "eminent domain" was taken from the mid-19th century from the legal treatise, De Jure Belli et Pacis, written by the Dutch jurist Hugo Grotius in 1625, who used the term dominium eminens (Latin for supreme lordship) and described the power as follows:

"... 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, including New York and Louisiana use the term appropriation as a synonym for the exercising of eminent domain powers.

The term compulsory purchase, also originating in the mid-19th century, is used primarily in England and Wales (see compulsory purchase order), and some other jurisdictions that follow the elements of English law. Originally, the power of eminent domain was assumed to arise from natural law as an inherent power of the sovereign.

Allodial versus feudal title

Allodial title is the title to land generally held in fee simple by an individual or group that is sovereign on that land. Thus, in English law, only the monarch holds allodial title. All others are tenants of the sovereign through their feudal vassalages. Sovereigns generally gain allodial title either by grant of another sovereign to such title, or through right of conquest.

In the United States and other democratic republics, the people are the sovereign and delegate the power to exercise sovereign powers to their representatives in government. As in English law, what private parties own is not the land itself, but an interest in the property, and it is that interest for which they are entitled to compensation if the government exercises its eminent domain power.

United States

In the United States, the power of governments to take private real or personal property predates the Constitution, being a part of the common law inherited from England. 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 so 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 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.

The U.S. Supreme Court has consistently upheld the rights of states to make their own definitions of public use. For instance, in 1832 the Supreme Court ruled that eminent domain could be used to allow a mill owner to expand his dam and operations by flooding an upstream neighbor. The court opinion stated that a public use does not have to mean public occupation of the land; it can mean a public benefit. 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 right-of-way (here an irrigation ditch from a river) on another farmer's land (with compensation), because that farmer was entitled to the "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. 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 did not to the states. That view ended in 1896 when in the Chicago B. & Q. Railroad v. 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. This was the beginning of what is 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 structures that were primarily--but not entirely--blighted, 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 condos, private office buildings and a shopping center. The Supreme Court ruled against the owners of non-blighted properties 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.

The Supreme Court's decision in Kelo v. City of New London, 545 U.S. 469 (2005) affirmed New London’s authority to take non-blighted private property by eminent domain, and then sell the property to a private developer solely for the purpose of increasing municipal revenues. This 5-4 decision received heavy press coverage because the Court sided with the city's argument that this sort of taking and private redevelopment was a public benefit. Kelo inspired a public outcry that eminent domain powers were too broad. This resulted in several states enacting or considering state legislation that would further define and restrict the state's own power of eminent domain. The Supreme Courts of Illinois, Michigan (County of Wayne v. Hathcock(2004)) and Ohio (Norwood, Ohio v. Horney(2006)) have recently ruled to disallow such takings under their state constitutions.

The redevelopment in New London, that was the subject of the Kelo decision, proved to be a failure and as of the summer of 2008 (three years after the court's decision) the redeveloper has not been able to obtain financing for the project and nothing has been built on the taken land in spite of the expenditure of some $80 million in public funds.

American libertarians argue that eminent domain is unnecessary. Bruce L. Benson notes that utilities, for instance, have a variety of methods at their disposal, such as option contracts and dummy buyers, to obtain the contiguous parcels of land needed to build pipelines, roads, and so forth. These methods are routinely used to acquire land needed for shopping malls and other large developments. Defending the Undefendable argues that the problem of recalcitrant landowners (i.e. "the curmudgeon") who refuse reasonable offers for the sale of their land is solved in the long term by the fact that their failure to accumulate wealth through such trades will give them a relative disadvantage in attempting to accumulate more land. Thus, the vast majority of land will tend to ultimately end up in the control of those who are willing to make profitable exchanges.

Bush Executive Order

On June 23, 2006 - on the one-year anniversary of the Kelo decision (see above), President George W. Bush issued an executive order stating in Section I that the federal government must limit its use of taking private property for "public use" with "just compensation", which is also stated in the constitution, for the "purpose of benefiting the general public." He 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". However, eminent domain is more often exercised by local and state governments, albeit often with funds obtained from the Federal government.

Examples

Typo in the U.S. Constitution

Europe

In many European nations, the European Convention on Human Rights provides protection from appropriation of private property by the state. Article 8 of the Convention provides that "Everyone has the right to respect for his private and family life, his home and his correspondence" and prohibits interference with this right by the state, unless the interference is in accordance with law and necessary in the interests of national security, public safety, economic well-being of the country, prevention of disorder or crime, protection of health or morals, or protection of the rights and freedoms of others. This right is expanded by Article 1 of the First Protocol to the Convention, which states that "Every natural person or legal person is entitled to the peaceful enjoyment of his possessions." Again, this is subject to exceptions where state deprivation of private possessions is in the public interest, is in accordance with law, and, in particular, to secure payment of taxes.

France

In France, the Declaration of the Rights of Man and of the Citizen similarly mandates just and preliminary compensation before expropriation.

England and Wales

In England and Wales, and other jurisdictions that follow the principles of English law, the related term compulsory purchase is used. The landowner is compensated with a price agreed or stipulated by an appropriate person. Where agreement on price cannot be achieved, the value of the taken land is determined by the Lands Tribunal, a court consisting of one barrister and two appraisers (called "chartered surveyors" in England). The operative law is a patchwork of statutes and case law. The principal Acts are the Lands Clauses Consolidation Act 1845, the Land Compensation Act 1961, the Compulsory Purchase Act 1965, the Land Compensation Act 1973, part IX of the Town and Country Planning Act 1990, the Planning and Compensation Act 1991, and the Planning and Compulsory Purchase Act 2004.

Germany

The Basic Law for the Federal Republic of Germany states in its Article 14 (3) the "an expropriation is only allowed for the public good" and just compensation must be made. It also provides for the right to have the amount of the compensation checked by a court.

Australia

In Australia, section 51, subsection xxxi of the Constitution permits the Commonwealth (federal government) to make laws with respect to "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws." This has been construed not necessarily to mean just compensation as a just term might not of necessity be monetary or proprietary recompense, as was particularly notable in The Castle. However, it is for the court to determine what is just and it may be necessary to imply a need for compensation in the interests of justice, lest the law be invalidated (Andrews v Howell (1941) 65 CLR 255). The property is not restricted to real estate. The precedent established by the federal court (Smith v Harrison (1981) 135 CLR 280) extended the states' power to any form of physical property. The court ruled that animals under the federal Marsupial Protection Act (MPA) could be expropriated from private owners and reestablished in reservations.

For the purposes of section 51, subsection xxxi, money is not property which may be compulsorily acquired; the Commonwealth must also derive some benefit from the property acquired and not merely seek to extinguish the previous owner's title (Mutual Pools and Staff Pty Ltd v Commissioner of Taxation (1992) 173 CLR 450). A statutory right to sue has been considered "property" under this section (Smith v ANL Ltd (2000) 176 ALR 449).

The term resumption is a reflection of the fact that all land was owned by the crown in 1788, and that the crown is resuming ownership.

Canada

In Canada expropriation is governed by federal or provincial statutes. Under these statutory regimes public authorities have the right to acquire private property for public purposes, so long as the acquisition is approved by the appropriate government body. Once property is taken, an owner is entitled to "be made whole" by compensation for: the market value of the expropriated property, injurious affection to the remainder of the property (if any), disturbance damages, business loss and special difficulty relocating. Owners can advance claims for compensation above that initially provided by the expropriating authority by bringing a claim before the court or an administrative body appointed by the governing legislation.

India

The Constitution originally provided for the right to property under Articles 19 and 31. Article 19 guaranteed to all citizens the right to acquire, hold and dispose of property. Article 31 provided that "no person shall be deprived of his property save by authority of law." It also provided that compensation would be paid to a person whose property has been taken for public purposes.

The provisions relating to the right to property were changed a number of times. The 44th amendment act of 1978 deleted the right to property from the list of Fundamental Rights. A new article, Article 300-A, was added to the constitution which provided that "no person shall be deprived of his property save by authority of law". Thus, if a legislature makes a law depriving a person of his property, there would be no obligation on the part of the State to pay anything as compensation. The aggrieved person shall have no right to move the court under Article 32. Thus, the right to property is no longer a fundamental right, though it is still a constitutional right. If the government appears to have acted unfairly, the action can be challenged in a court of law by citizens.

with the Liberalization of the economy and govt's initiative to setup special economic zones has led to many protest by farmers and have thrown the fundamental right to private property reinstatement.

Chile

Art. 19, Nº 24, of the Chilean Constitution establishes that "No one, in any case, can be deprived of its ownership, the property of such ownership or any of the essential attributes or faculties of the ownership, except by a general or special law that authorizes the expropriation by the cause of public utility or national interest, as qualified by the legislator. The expropriated will be able to claim over the legality of the expropriatorial act before regular Courts and will always have the right to an indemnification for the patrimonial damage effectively caused, which will be established by an amiable agreement o by a sentence handed down according to law for said Courts."

The vast majority of expropriated owners accept the amount of the indemnification, which usually is in line with real estate market values.

Other countries

Many countries recognize eminent domain to a much lesser extent than the English-speaking world or do not recognize it at all. Japan, for instance, has very weak eminent domain powers, as evidenced by the high-profile opposition to the expansion of Narita International Airport, and the disproportionate amounts of financial inducement given to residents on sites slated for redevelopment in return for their agreement to leave, one well-known recent case being that of Roppongi Hills.

There are other countries such as the People's Republic of China that practice eminent domain whenever it is convenient to make space for new communities and government structures. Singapore practices eminent domain under the Land Acquisitions Act which allows it to carry out its Selective En bloc Redevelopment Scheme for urban renewal. The Amendments to the Land Titles Act allowed property to be purchased for purposes of urban renewal against an owner sharing a collective title if the majority of the other owners wishes to sell and the minority did not. Thus, eminent domain often invokes concerns of majoritarianism.

Most recently (and infamously) in Zimbabwe, the government of Robert Mugabe seized a great deal of land and homes of mainly poor villagers thought to be political opponents of his regime.

See Also

Notes

Further reading

  • Dana Berliner, Opening the Floodgates; Eminent Domain Abuse in a Post-Kelo World, Institute for Justice, June 2006. Available online
  • Redevelopment Wrecks; 20 Failed Projects Involving Eminent Domain Abuse, Institute for Justice, June 2006. Available online
  • Myths and Realities of Eminent Domain Abuse, Institute for Justice, June 2006. Available online
  • Steven Greenhut, Abuse Of Power: How The Government Misuses Eminent Domain, Seven Locks Press, June, 2004, trade paperback, 312 pages, ISBN 1-931643-37-7
  • Joshua U. Galperin, A Warning To States, Accepting this Invitation May be Hazardous to Your Health (Safety and Public Welfare): An Analysis of Post-Kelo Legislative Activity. 31 Vermont Law Review 663 (2007).
  • Aaron Pirnack, So Long, and Thanks for Playing: Small Business Fair Compensation and Eminent Domain
  • Dana Berliner, Public Power, Private Gain, Institute for Justice, April 2003. Available online
  • A.J. Hazarabedian, California Eminent Domain Handbook, California Eminent Domain Law Group, June 2005. Available free online
  • John Ryskamp, The Eminent Domain Revolt: Changing Perceptions in a New Constitutional Epoch, New York: Algora Publishing, 2006.
  • Just Compensation, A Monthly Report on Condemnation Cases, Gideon Kanner, Editor, Published monthly since 1957.
  • Property Owners' Rights Handbook: Your Rights and Remedies Under the Eminent Domain Law, Sullivan, Workman & Dee, LLP, 2005. Available online
  • Bulldozed: 'Kelo,' Emiment Domain and the American Lust for Land, Carla T. Main, Encounter Books, August 2007.
  • NCSL: Eminent Domain. Available online
  • NCSL: State Case Law Prohibiting Eminent Domain for Economic Development, August 2005. Available online
  • New Jersey Eminent Domain Law

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