Since
the Supreme Court’s June decision in the Susette
Kelo v. City of New London case (see www.findlaw.com/casecode,
click “Supreme Cour,t” then click “recent
decisions”), much has been reported in the media
about the eminent domain concept and the government’s
right to seize private property for urban renewal or
economic development purposes. It makes people wonder
if the Colonial or condo they buy today will become a
big-box store tomorrow. Here’s a brief overview:
Eminent
domain is guaranteed by the Constitution’s Fifth
Amendment and has made possible the building of highways,
schools, power plants, and other public works projects
across the country. For more than 200 years, the Constitution
has given the government the right to take public property
(after providing fair and equitable compensation) for
the public good. The Fifth Amendment reads, in part, “.
. . nor shall private property be taken for public use,
without just compensation.” The urban renewal aspect
of eminent domain began in 1954, when the Supreme Court
ruled in Berman v. Parker that cities can apply eminent
domain to demolish crime-ridden or decrepit areas for
private purposes, and has troubled homeowners ever since.
The
Kelo case, however, was not a typical eminent domain
situation. The Fort Trumbull area in economically-depressed
New London, Connecticut, where Pfizer Pharmaceuticals
wished to build a $300 million research/manufacturing
facility surrounded by hotels, shopping, and private
residences, was an older riverfront area that was neither
decrepit nor crime-ridden. Homes were well-cared-for
and occupied by long-time homeowners. Nine of the homeowners
refused to sell to the City, and, with the aid of the
property rights foundation The Institute of Justice,
took their case to the Supreme Court. Just compensation
was not an issue since the owners refused to sell at
any price. The homeowner plaintiffs argued that the public
would only benefit if the private business venture succeeded
and generated the jobs and economic impact that the City
and developers promised. In its opinion, the Supreme
Court wrote that “because [the City’s] plan
unquestionably serves a public purpose, the takings challenged
here satisfy the public use requirement of the Fifth
Amendment.”
Under
eminent domain, the government generally notifies owners
that a property is being considered for a public use,
and it makes an offer for that property after surveys
and appraisals. If the owner does not consider the price
to be fair, or if he is unwilling to give up his property
at any price, then the government can take the land.
The owner is free to negotiate for a higher price for
the property before the actual taking, but under most
rules, the owner can contest the price in court only
after actual condemnation.
While the Supreme Court’s decision broadens government’s
eminent domain powers, it does not “make it possible
for the government to take your home,” as announced
in the media. The Court left room for citizens to fight
eminent domain proceedings against their properties, such
as in cases where the taking is meant to benefit private
entities rather than the public. However, there are roadblocks
to challenging an eminent domain proceeding:
(1)
An owner must be properly compensated for his property,
but cannot contest the price in court after condemnation
has actually occurred.
(2)
Eminent domain legal challenges are often beyond the
financial wherewithal of most property owners, especially
those in poorer areas.
(3)
Eminent domain proceedings can take years, making owners
unable to sell or refinance their properties and unwilling
to remodel or maintain their homes.
So,
after Kelo, is your home still your castle, or do you
have to build a legal moat around it? Only time and future
court challenges will tell.
Karen A. Jackson, PLS, is a legal administrative
assistant at Venable LLP in Washington, D.C., and is
a member of the NALS @Law Editorial Committee.
