The concept of eminent domain
Overall, such a concept as an eminent domain can be defined as the power of the state to take or control the property of the citizens for the public benefit without the consent or wishes of the owners (Elliot, 99). As a rule, the expropriator can be the government or the third party that acts on behalf of the government. The phrase “public benefit” is crucial in this context because the state must prove that the seizure of the land will contribute to the well-being of the community. As a rule, the government exercises the right of eminent domain, when they intend to build interstates, railroads, or any other public utility.
Several procedures are compulsory for this legal process at least in Missouri;
- providing notification to the landowner when there is the likelihood that his/her land may be condemned;
- informing the land-owner about his/her rights;
- offering compensation that goes beyond the fair market value of the land;
- enabling the owner to obtain additional compensation if the use of the land has changed, for instance, if a certain public utility has been purchased by a private business.
These are the major steps of this process. When we are discussing the amount of reimbursement, paid to the citizen, we need to say that the government has to consider not only the value of the land but also those losses, incurred by the citizen in the course of resettlement. One of the most common examples is the losses incurred by small businesses. Overall, there is still a heated argument across the United States about the legal grounds for eminent debate, the rights of the landowners, and legal procedures. These issues are going to be discussed in this paper.
Trends in case law before 2005
The history of case law, relevant to the eminent domain can be split into two parts before 2005 and after 2005. If we are speaking about the trends in legislation before 2005, we need to say that the government exercised the right of eminent domain mostly for blight clearance and the development of infrastructure such as railroads, airports (Malloy, 68). This concept included not only these activities. In some circumstances, the government could transfer the land to a private company to boost the economic development of certain regions. Nevertheless, one should not assume that this term was well explained or defined.
The most distinguishing feature was that private businesses could easily become the main expropriators of the land and the main beneficiaries. They could be the contractors of the government and were engaged in the construction of new houses, railway stations, or airports (Malloy, 97). Yet, they could also seize the land for long-term use; in other words, they could derive considerable profit from the eminent domain.
Therefore, we can argue that the very concept of public use was not very limited or explained and there was much leeway for private businesses to participate in this process. One should take into account that at the moment at that time and nowadays there is no definitive legislative act that would explain the legitimacy requirements for the eminent domain. The only legal document that could help to resolve such conflicts was the Takings Clause of the Fifteenth Amendments to the US constitution (Brannon, 240). Nowadays, the situation has changed only at the level of the state legislature.
State and Supreme Court decisions
We can mention several cases when eminent domain was used to take private property and transfer it to private businesses for economic development and job creation. One of the most famous Supreme Court decisions as Hawaii Housing Authority v. Midkiff. The judges ruled that the private property (land) should be taken from a private owner and given to private citizens (Hawaii Housing Authority v. Midkiff. 467 U.S. 229).
This is one of those decisions that shaped the legislature, regulating the use of the eminent domain. The main objective which the government wanted to achieve by expropriating the land was to eradicate oligopoly in Hawaii. At that time a small group of landowners dominated the market and housing prices were constantly rising. Thus, the government attempted to distribute these lands to local residents. It appears that the judges supported this initiative because the public benefits were obvious. They ruled in favor of this decision even though it was a private taking.
Another case that illustrates how private organizations can participate in the eminent domain is the famous Poletown town case, which is also known as County of Wayne v. Edward Hathcock. (as cited in Staley & Blair, 13). This is one of those state court decisions that allowed the private property of a person to be transferred to a private business, allegedly for economic development. However, the main beneficiary was the company that was intending to open a new office in this area, but not the community. Soon that decision was overruled. These court decisions demonstrate that private bodies could easily become beneficiaries of eminent domain and that this expropriation was not always beneficial to the community, itself.
The case of Kelo v. City of New London
The decision of the Supreme Court regarding the Kelo case has played an important role in the development of the American legislature regarding the right of eminent domain. The Supreme Court ruled that the federal or municipal government could seize the property of the private citizens and give them to a private organization to create jobs and increase the revenues of the city; more importantly, the majority of judges concurred that the right to eminent domain includes both blighted and non-blighted territories (Malloy, 68). The concurring opinion was that the active participation of private businesses was quite compatible with the notion of public use1. It should also be mentioned that the court rejected the petitioner’s argument according to which “for takings of this kind the Court should require a “reasonable certainty” that the expected public benefits will accrue” (Kelo v. City of New London, 545 U.S. 469, unpaged).
This sentence is arguably the most crucial one; it means that the government does not have to provide solid proofs that expropriation of the land will benefit the community. In order to substantiate their decision, the judges referred to such cases as Hawaii Housing Authority v. Midkiff and Berman vs. Parker2 as they illustrated an idea that the government could not always provide evidence that eminent domain will contribute to the community.
One should not assume that this decision was supported by each of the judges. There was also a dissenting opinion, for example, the Supreme Justice Sandra O’Connor stated that this decision would “those citizens with disproportionate influence and power in the political process, including large corporations and development firms” to victimize the weak” (Kelo v. City of New London, 545 U.S. 469, unpaged). Those, judges, who disagreed with the decision of the majority, believed that this case would create a precedent for the seizure of private property without actually proving that eminent domain is necessary.
The dissenting judges also pointed out such an excuse as economic redevelopment can significantly weaken the limitation on the government authority. These are the most important moments of this case. This court decision raised public awareness about the concept of eminent domain, the potential conflicts that it may stir. Yet, the most important issue is how to define such notions as public use and public benefit because those, who are in the position of authority, can take advantage of them to promote private rather than public interests.
The implications of the case
This decision of the Supreme Court has several actual and potential implications for the state and federal legislation. First, we need to say that several states such as Arizona, California, Florida, Michigan have altered laws that regulate the use of an eminent domain (Lopez et al, unpaged). Each of these amendments forces the government to demonstrate that the land or any other type of property will be really in public use. Furthermore, the public benefits of the expropriation must be made clear.
Thus, eminent domain is viewed as legitimate, only if these requirements are met. In addition to that, the Senate introduced such laws as Protection of Homes, Small Businesses, and Private Property Act3. It prohibits the government to seize private property only for increasing municipal revenues. However, this act has yet to be signed into law. There are several potential impacts of the Kelo case:
- the US policymakers will have to define such terms as “public use” and “public benefit” as their ambiguity is often the underlying cause of conflict;
- the courts may have to review some of its previous decision of concerning the legitimacy of expropriation;
- the federal government tightens its supervision over local authorities that abuse the right for eminent domain.
These are the hypothetical effects of the Kelo case.
Eminent domain in Missouri
The State of Missouri also responded to this very controversial decision of the Supreme Court. First of all, the state government prohibits the condemning authorities to take private property for “solely economic purposes” (Leasure & Miller, unpaged). In this context, the economic purposes include the increase in the tax base and job creation (Leasure & Miller, unpaged). Instead, the key goal of such expropriation should be the improvement of living conditions in the area, and especially, the removal of blights. However, the most crucial changes concern compensation policies. Such notion as fair market value is now defined as “the value of the property taken after considering comparable sales in the area, capitalization of income and replacement costs” (Leasure & Miller, unpaged).
In other words, the local authorities must take into consideration not only the price of the property, but also the use of this property and the income that a person could have derived from it. This argument is particularly relevant if we are speaking about small businesses. However, even at this moment there are no legal definitions of such notions as blighted and non-blighted areas (Leasure & Miller, unpaged). The Kelo case has attracted so much attention because it enabled the government to seize the lands which are considered to be non-blighted, at this point, there are Missouri legislation does not distinguish these notions. So, technically there is a great probability that the Kelo case may repeat itself in this region.
Interstate expansion and Stuff-Mart distribution Center
As far as Bob’s situation is concerned, we can predict the following outcomes. The government will have a legal right to seize those parts of his lands that will be used for the construction of the interstate. It will be very difficult for him to protect his property in this case, as the development of infrastructure is one of the most common excuses for expropriation. Furthermore, this project falls under the category of public use, and the social benefits are conceivable. Bob should be primarily concerned with the amount of reimbursement that will be paid to him.
The construction of the Stuff-Mart center is a much more difficult legal conflict. It is expected that this undertaking will bring millions of revenue and create more than five hundred jobs. Yet, these are solely economic purposes; they do not directly contribute to the eradication of blights or unsanitary conditions. This is why it is possible to argue that eminent domain is not legal in this situation.
Berman vs. Parker. 348 U. S. 26 (1954). Web.
Brannon H. A Treatise on the Rights and Privileges Guaranteed by the Fourteenth Amendment to the Constitution of the United States. General Books LLC. 2009. Print.
Elliott Charles. The Principles of the Law of Public Corporations. NY Bibliobazaar. Print.
Hawaii Housing Authority v. Midkiff. 467 U.S. 229. Web.
Kelo v. City of New London. 545 U.S. 469. 2005. US. States. Web.
Leasure Stanley & Miller Carol. Eminent Domain – Missouri’s Response to Kelo. The Missouri Bar. 2007. Web.
Lopez, Edward J.; Jewell, R. Todd; and Campbell, Noel D. (2009) “Pass a Law, Any Law, Fast! State Legislative Responses to the Kelo Backlash,” Review of Law & Economics: Vol. 5 : Iss. 1, Article 5.
Malloy Robin. Private property, community development, and eminent domain. Ashgate Publishing, Ltd. 2008 Print.
Staley Samuel & Blair Jorn. EMINENT DOMAIN, PRIVATE PROPERTY, AND REDEVELOPMENT AN ECONOMIC DEVELOPMENT ANALYS. Reason Foundation. Web.
State of Missouri, Jefferson City. Final Report and Recommendations to the Eminent Domain Task Force. 2005. Web.
The United States. Protection of Homes, Small Businesses, and Private Property Act of 2005. Web.
- Refer to Kelo v. City of New London (unpaged).
- Please refer to The United States. Protection of Homes, Small Businesses, and Private Property Act of 2005.