Eminent domain is the power of a government to take private property and use it for public purposes. Here in the states, the power of eminent domain is recognized in the United States Constitution, which prohibits the taking of private property "without just compensation." Although the power of eminent domain has been traditionally used to acquire land, the government has extended the law to acquire other forms of property. The federal government procedure is established in something called the Federal Rules of Civil Procedure.

To complicate matters, each state in America has their own statute or statutes that establish how the power of eminent domain is exercised. Naturally these statutes will vary from state to state. For example, in some states, the government is required to negotiate with the property owner before instituting eminent domain proceedings. In others, the government may institute the proceedings without prior notice to the property owner.

The federal constitutional provision that recognizes the power of eminent domain implies the requirement that the property being taken must be taken for "public use". This has been broadly interpreted to include uses which are generally beneficial to the public. "Public use" includes traditional government activities such as the building of roads, the construction of government buildings, parks, and more generally beneficial activities such as protection of scenic areas, wetlands, and historic landmarks. Under really broad interpretation, the government taking of property for redevelopment by private parties has been upheld.

On to the subject of "just compensation."

The standard for "just compensation" is usually the fair market value that the owner of the property would receive if the property were being sold in an ordinary transaction. Here's where it gets a little sticky. If the government and the owner cannot agree on the fair market value, a court proceeding including testimony of "expert" witnesses is often required. There have been many cases where property owners disagree with the decisions of the court on the determination of fair market value and have had to be physically removed from their property, sometimes at gunpoint.

Last but not least, under federal law, if the property is being condemned for a project using federal funds, the state or the federal government must also pay moving and relocation expenses to the displaced owners and provide relocation and other services to the property owners and tenants.

If there is one case on the docket of the United States Supreme Court this year (October Term 2004), which really tests their mettle as the defenders of our liberties, it would be Kelo v. City of New London. At first blush this is just another obscure case involving what lawyers call eminent domain: the power of the government to take private property for public use. A closer look reveals the Court will have to decide whether we still live under a government "of the people, for the people, and by the people" as Lincoln said, or whether we live in a plutocracy where the government serves the needs and desires of its wealthiest citizens.

The basic rule for eminent domain in the United States is embedded in a terse clause of the Fifth Amendment, known as the "Takings Clause":

... nor shall private property be taken for public use without just compensation.
The Takings Clause suggests two things, first that private property can be taken for public use, and second, if it is taken, it must be paid for. A typical example of eminent domain is condemning land for a highway. Every entity with eminent domain (initially only the States, but they can delegate their powers to local governments or private corporations, such as electric utility companies) has to develop procedures for appraising property and either try to convince the owners to take the money, or forcibly evict them and get a court order fixing the value of the property.

Where it gets tricky is when the government takes private property from one person and gives it to another private person for a private use. Let me make one thing clear from the outset: I have no problem with the idea of eminent domain in general nor even the situations where property is turned over to private developers for commercial development. I am a lawyer, and I have represented developers in cases like this. In one case I was involved with, there was a large area of vacant land in the middle of the rapidly growing city of Rio Rancho, New Mexico. This land had been subdivided into one-acre lots, and had been sold to individual investors to either hold for investment or build retirement homes. The expected development never happened, even when houses started sprouting up all around the area like mushrooms, because it has never been economically feasible to develop this land one house at a time, in relatively low-density chunks, without the infrastructure that people want and expect in suburbia today: roads, parks, hiking and equestrian trails, schools, and convenient mixed commercial zones to locate amenities such as gas stations, fast food, dry cleaners, etc. etc.. The only way to get building started was to assemble all the land into bigger parcels, and set aside some for the infrastructure, and pack the residential lots more densely (a quarter-acre or less). The landowners welcomed the declaration that the area was "blighted", because it meant they could liquidate their investments. (The legal dispute was about who was going to get the contract to do the building, not whether the area was going to be condemned). Similar cases have arisen in city centers where the land is undergoing a slow decay from run-down tenements to piles of rubble. In those cases, the question is always how much compensation is "just", not whether the bulldozers should start clearing the way.

There is one crucial difference, however, between the Kelo case and the ones I have worked on: there are people living there. They have been there for decades, living in single-family dwellings on small lots, in a neighborhood known as the "Fort Trumbell" area. Fort Trumbell is a classic example of mid-20th century American suburbia. Like most Americans of my generation, I grew up in neighborhoods more or less identical to Fort Trumbell. It's not an upscale neighborhood, where Pfizer executives or real estate developers or New London City councillors might want to live today, but it's not a decaying slum, either. It in no way fits any reasonable definition of "blighted area" such that New London might be justified in razing it as part of a slum-clearing project or kind of classic urban redevelopment.

Unfortunately for the residents of this neighborhood, their old middle-class neighborhood is right next to a brand spanking new pharmaceutical "global research facility" constructed by Pfizer, Inc. on the site of the old New London Mills. It's a prime location for high-density office parks, which will generate more tax income for the City and attract yet more development and commercial investment. It's a sound theory. Projects like this really do increase the commercial value of the city as a whole, creating a better tax base for the city which in generates money for an enhanced quality of life for all its citizens: better schools, public hospitals, parks, libraries and a whole host of city services. The burden for this public benefit, however, falls disproportionally on the homeowners of Fort Trumbell.

Even if they get "just compensation" as the law defines it, they won't get the benefit of the enhanced value of their land after redevelopment. The law of eminent domain has evolved in an environment where unscrupulous speculators with inside information have purchased land they know the government is interested in, in order to turn it around and make a quick windfall profit on an inflated "just compensation" price. To prevent this sort of thing, "just compensation" is determined by the fair market value of property before the government announces its intent to condemn. For the homeowners of Fort Trumbell, this precedent ensures they will get screwed by the process. Whatever your idea of "fair" or just might be in this situation, the fact remains that the profits from the project will go to the private developers, not the current homeowners

There is more at stake here, however, than money. Unlike in the usual "takings" case, some of the Plaintiffs in the case of Susette Kelo et al. v. City of New London and New London Development Corp., don't want any amount of compensation. They just want to keep their homes. They first complained to a state court in Connecticut that their property wasn't being taken for "public use". At the trial level, the district court found that the scope of the condemnation was excessive, and that some of the land wasn't really needed for the development, the developers just wanted it to enhance the overall value of the deal. The trial court therefore concluded that there was not a sufficient "nexus" (connection) between the purported "public use" or public purpose, and at least a few lots the City wanted to condemn. Both sides then appealled to the Supreme Court for the State of Connecticut, which decided that the scope of the entire project was reasonable, and rejected the district court's one small concession to the homeowners.

The Connecticut Supreme Court decision (which, along with many briefs, is linked here) reeks of "plutocracy". It says, in essence, "If our brothers in the government of New London, and the board rooms of Pfizer and the development companies have all agreed this is a good project, who are we to disagree?" And indeed, this is the majority position of precedent from around the country: when it comes to the question whether a property is being reasonably taken for "public use", it is better for judges to defer to the wisdom of elected officials. This deference to the powerful is excused on the theory that elected officials represent the will of the "majority", and when it is pointed out to them that the people calling the shots are really unelected businessmen or "captains of industry" as we used to call them, the more honest among them fall back on a sort of Calvinism in which the fact that these men are rich and powerful on the Earth indicates that they have the sanction and approval of Heaven. After all, if it were up to these silly people who stand in the way of progress, rather the ladies and gents who run Pfizer, to decide the future of the town, New London would still be a decaying former mill town, wouldn't it?

Class politics aside, it is unescapably true that eminent domain cases are "fact-intensive": the difference between the Rio Rancho case I have described and this one in New London has nothing to do with legal rules, and everything to do with history and circumstances. Theoretically at least, it is always better to leave factual questions to elected officials to decide, since they supposedly have broader input and are more accountable for their decisions. That is democracy.

As is so often the case in United States law, however, these deferential, majoritarian ideas run us smack into the brick wall of our anti-majoritarian Bill of Rights. It is a credit to the United States Supreme Court that they even acknowledged there was an issue worth debating in this case. (The Court assigned this case No. 04-108 and granted certiorari on September 28, 2004).

American property law evolved from feudal origins. In England, all the land initially belonged to William the Conquerer, who earned it and his name by invading England in 1066, and defeating the Saxon king Harold Godwinsson at Hastings. This royal ownership was no mere technicality: vast tracts were set aside as royal game preserves, which involved removing entire villages. Poaching on the king's land was a capital crime. William, in turn, assigned rights in his land to his generals, knights, closest friends and allies. These persons became the feudal aristocracy. Everyone who lived and worked on the land (and thus in the view of John Locke thereby became entitled to "own" the land) was deprived of ownership and became serfs: the labor component of the property of the feudal lords. The King's assignment of ownership to his vassals was inheritable and for most practical purposes permanent and absolute (we lawyers say, "fee simple absolute" to distinguish ownership from rental) but in a technical legal sense it was not. If a lord died without heirs, the property would "escheat": revert back to royal ownership. And if the King wanted to use someone's land for some royal purpose, such as building a road, he was perfectly within his rights as the "true" owner to use it as he saw fit.

English law gradually evolved limits on what the King could do with land which had been assigned to others, to the point where theorists such as Locke could speak intelligibly and sensibly about "private" property rights. By the time of the American Revolution, the framers of the Constitution of the United States of America were ready to make a theoretical break with the feudal past and enshrine certain of those rights into positive law. The most explicit constitutional principle was embedded in the Fifth Amendment, as follows:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

While it seems strange to modern lawyers that the Framers would tack the Due Process and Takings clauses onto an enumeration of the procedural rights of criminals, these were men who were well aware that the Crown could, at any time, remove them from their exalted stations in life and reduce them to the level of common criminals, facing the death penalty. These are the guys who said things like "Give me Liberty or give me Death!" and "We must, indeed, all hang together or, most assuredly, we shall all hang separately. ". Liberty and private property were, in their minds, inextricably connected.

The existence of "private property", however, does not guaranty that ordinary people will be free. We don't hand out some property to each citizen as a birthright. When my ancestors emigrated to Pennsylvania from Germany in the 19th Century, they faced a choice. They could get a job in the steel mills and live in a company town like Reading, Pennsylvania, which had the advantage of secure, reliable source of income and an improved standard of living (compared to being a serf in Germany) or borrow money for a farm or shop and try to make it on their own. My ancestors chose the latter, which may be one of the reasons why, generations later, I enjoy a higher level of education and better standard of living than most Americans. Not only were we spared the more blatant discrimination in housing and education suffered by racial minorities, we had the credit, the collateral, the "where-with-all" to avoid the more subtle discrimination suffered by the modern-day serfs: the mill workers, the white trash, the trailer trash, the Okies, the great unwashed masses who rent everything they own and constantly have their pockets picked by the rich.

The foundation for "getting ahead" in this country was, and remains, owning your own home. Whether or not you literally own your own home and can mortgage it to pay for your children's college education, the fact that great numbers of people can do this has created a "middle class" with its own culture and sense of entitlement. In fact, my parents were never homeowners (they were transients who always rented) but I grew up in middle class neighborhoods and went to the "better" public schools and always felt entitled to higher education in the very best private colleges (even if we really couldn't afford that, and I had to work and borrow and take government handouts to do it). Which brings me back to Fort Trumbell.

There is a lot of recent precedent on the Takings Clause, but not much of it helps here. We know, for example, that the Fifth Amendment "takings" clause applies to physical appropriations of land by the government: bulldozing your house and paving over your land for a highway, for example. There is no question that when one person's property is taken like this for the benefit of all, that one person is entitled to compensation. What the Supreme Court struggled with through most of the 20th Century were the kinds of regulatory appropriations that did not involve physical takings. Generally this means the imposition of a regulation, or the denial of a permit, depriving the land owner of some valuable use of the land. For example, a Pennsylvania statute prohibited the practice of "robbing the pillars" –taking so much coal from a coal mine that it created a danger that the mine would collapse, causing the land above to subside, destroying buildings or even consuming entire streets. The Supreme Court decided that even though the government was not physically occupying or appropriating the coal in the coal mine, and it technically still belonged to the coal company, that nonetheless a "taking" had occurred because the coal company had been deprived of an economically significant use of their property, and should be compensated. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). This case established the “regulatory taking” concept. Justice Holmes stated that “if regulation goes too far, it will be recognized as a taking.”

The Supreme Court had extended this kind of thinking to nebulous or dubious property rights such as the right to tear down a small historic landmark and build a big skyscraper on the land, Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978); to de minimus intrusions such as condemning really small amounts of property to set up cable TV networks, Loretto v. Teleprompter Manhattan CATV Corp. 458 U.S. 419 (1982), and even to the government's attempt to condition building permits on giving up something for the public, like a public easement to the beach on private beach property, Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). None of these cases, however, or the dozens of similar cases, address the issue of "public use", or more broadly, what to do when the owner refuses to sell.

We don't have a lot of law on this issue because these situations are often resolved politically. Recently the city fathers of the City of Albuquerque condemned a big chunk of the old Hispanic barrio (village) of Barelas to build the National Hispanic Cultural Center. One old Hispanic lady living in the century-old adobe house she was born in, however, refused to budge. While the City had the power to evict her, the irony of bulldozing an old Hispanic home for the Hispanic Cultural Center was just too much, and they decided it would be political suicide to force her out. So they built the thing around her. Now her house sits in the middle of the parking lot.

At a more theoretical level, however, all this precedent presupposes that the judiciary must roll up its collective sleeve and strike a balance between public and private interests. As Justice Holmes put it Pennsylvania Coal Co. v. Mahon:

We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change. As we already have said, this is a question of degree -- and therefore cannot be disposed of by general propositions.

It is "not enough", then, to defer to the majority will, or rely on rigid legal formulas. The Constitution requires more. The Supreme Court has, for decades now, bucked the tide of lower court opinions which would allow property to be taken. All of the cases I have cited here came as a surprise to the legal community and overruled volumes and volumes of legal precedent. It remains to be seen whether the Court is still up to the challenge of being the ultimate refuge of the citizen and last, lonely defender of the Bill of Rights.

================================================================= Update, June 23, 2005. Guess what? We do live in a plutocracy. Scotus affirms Conn. court in 5-4 decision.

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