The Best Class

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The Best Class
nor shall private property be taken for public
use without just compensation.

• The Last Class

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The Process of Eminent Domain

• Public Necessity and Just Compensation

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Eminent Domain Legal Theory

• Eminent Domain is an ancient power
• It is the pre-eminent power of government
• Assuming that all land and land rights devolve
  from the King the sovereigns power extends to
  the re-possession of any land upon showing of a
  pubic necessity
• Under our 5th Amendment nor shall property be
  taken by the government except for a public
  purpose and upon payment of just compensation

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Blackstone On Property and Takings

• So great moreover is the regard of the law for
  private property, that it will not authorize the
  least violation of it no, not even for the
  general good of the whole community. If a new
  road, for instance, were to be made through the
  grounds of a private person, it might perhaps be
  extensively beneficial to the public but the law
  permits no man, or set of men, to do this without
  consent of the owner of the land. In vain may it
  be urged, that the good of the individual ought
  to yield to that of the community for it would
  be dangerous to allow any private man, or even
  any public tribunal, to be the judge of this
  common good, and to decide whether it be
  expedient or no.

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Blackstone II

• Besides, the public good is in nothing more
  essentially interested, than in the protection of
  every individual's private rights, as modeled by
  the municipal law
• In this, and similar cases the legislature alone
  can, and indeed frequently does, interpose, and
  compel the individual to acquiesce
• But how does it interpose and compel? Not by
  absolutely stripping the subject of his property
  in an arbitrary manner but by giving him a full
  indemnification and equivalent for the injury
  thereby sustained. The public is now considered
  as an individual, treating with an individual for
  an exchange.

6
Blackstone

• All that the legislature does is to oblige the
  owner to alienate his possessions for a
  reasonable price and even this is an exertion of
  power, which the legislature indulges with
  caution, and which nothing but the legislature
  can perform.

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What Is Condemnation?

• The government may take in three ways
• Eminent Domain
• Regulatory or Categorical Taking of All or
  Practically All Value Related to Use
• Inverse Condemnation When the government, by
  its actions, makes the use of private property
  untenable
• Airport Cases
• Military Bases
• Damage resulting from flooding or dam projects
• A project which undermines nearby structural
  foundations

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What is Just Compensation

• Just compensation is based on value
• Value can have many faces but fair market value
  is the standard used in Eminent Domain
• This is classically define as what a willing
  seller with take and a willing buyer offer
• Justice Butler defined just compensation as
• The owner is entitled to the full money
  equivalent of the property taken, and thereby to
  be put in as good a position pecuniarily as he
  would have occupied, if the property had not been
  taken

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Value The Principles

• Courts talk in terms of present market value and
  not future or speculative value unless the
  probability of such future value affects present
  value
• If the special adaptability of the land for the
  projected use creates a special demand by
  ordinary purchasers, this may be included in
  present value
• The market value is not all of the just
  compensation picture.
• It is only a payment for strict money value on a
  well define parcel

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Damages And Value

• Consequential Damages
• Term used to describe the personal injuries such
  as the expense of moving, inconvenience,
  interruption of business, loss of good will and
  under rare circumstances, pain and suffering
• The major principle is that the owner should only
  be compensated for those things of value that
  cannot be taken with him
• Severance Damage
• The damage resulting from diminution in market
  value of the owners remainder the relationship
  of the part to the whole

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Public Purpose

• Public purpose is shown when the holder of a
  certificate of necessity demonstrates a
  compelling need (under their corporate purpose)
  to acquire real property to increase the benefit
  to the public in general
• Thus, there is a general benefit in
• Building roads
• Supplying electrical power
• Removing and redeveloping blighted areas
• Creating flood control

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Case Examples
Public Roads
Sidewalks
Parking Lots
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Riley v District of Columbia Redevelopment
Corporation, 1956

• The District of Columbia instituted eminent
  domain against 45 parcels of land for the purpose
  of clearance for a public building
• Mrs. Riley was given 3 appraisals
• 6,500
• 7,000
• 6,200
• The jury returned an award of 7,000

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This is A Case About Mrs. Riley
She is not the sharpest tack on the bulletin board
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Background

• Mrs. Riley bought the house in 1951 for a total
  of 9,950
• She added 877 worth of improvements
• When it was seized in 1954 she owned a total of
  8,902 for the mortgage
• Thus the award was 3,800 less than the purchase
  price and about 1,900 less than her total
  investment
• Mrs. Riley was ticked off and appealed the award

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Appeals Court

• The Court begins by saying that just compensation
  means the full and perfect equivalent in money of
  the property taken
• The Court then examines two key questions
• The nature of the property in 1951
• The nature of the purchase in 1951
• The Court found the house to be solidly built and
  in good condition for its 50 years of age
• Mrs. Riley purchased the home for her daughter
  and her elderly Mother it was conveniently
  located within walking distance of the Civil
  Service where Mrs. Riley worked
• It was all she could afford

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Can You See Whats Coming?
18
Real Estate and Appraisers

• A real estate agent testified for Mrs. Riley. He
  had sold a large amount of homes in the area for
  10,000
• A neighbor purchased a home adjacent to Mrs.
  Riley in 1952 for 10,800
• The appraisers said the house was approximately
  40 percent depreciated and could be built today
  for 9,355. It had no income producing properties
• The appraisers felt that the purchase price bore
  no relation to the fair value. She paid too much
  for it almost stupidly excessive

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And The Court

It is the ordinary rule that the burden of proof
in a commendation case rests with the owner But
this is not ordinary Mrs. Riley seeks nothing
the government here is taking her private
property her home To take it is the highest
form of power and requires the highest form of
justice unequivocal just compensation
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God Strikes Down For Mrs. OReily
21
The Lone Ranger Rides Again
22
Inverse Condemnation and The Rule of Remnants
23
Martin v Port of Seattle, 1964

• In this case 196 property owners seek damages
  arising from inverse condemnation against the
  Seattle-Tacoma Airport
• The damage is from low altitude flights of
  jetliners over their property
• The essential legal question is whether the
  property owners actually have a claim for damage
  from the noise of aircraft

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Background

• The property in question forms a rectangular area
  about one mile long and ½ mile wide directly
  south of the primary runway
• Jetliners in the process of landing pass over
  this area at approximately 500 feet in altitude
• Basic problems
• Vibration is sufficient to throw dishes from
  shelves
• Conversation is interrupted from noise
• Sleep is disrupted, and the noise painful to many
• Many cannot sell their homes

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Primary Runway
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The Airport Responds

• Congress has placed all navigable airspace within
  the public domain
• The damage is incidental and does not constitute
  a physical invasion
• At most, it damages but does not take the
  property
• If a property owner can prove a diminution of
  value we should pay for that increment only not
  be required to take the entire property

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The Trial Court

• The trail court found that the interference
  amounted to a physical invasion of the air
  easement and constituted an inverse commendation
• When the noise and vibration deprives the land
  owner of an essential element of their land the
  result should be the same as if the airport
  operator brings the condemnation of the property

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Appeals Court

• This is no different that it would be if the land
  in question would have been condemned by the
  State when the airport land was acquired
• If the damage is slight then an owner should be
  entitled to payment for the increment of
  diminishment of enjoyment even a slight burden
  must be paid
• If the damage is substantial, then the owner
  should be entitled to full and perfect recovery
  of property under formal condemnation

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Remnants
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City of Crookstown v Erickson Minn. 1955

• The City condemned land for a sewerage treatment
  plant, discharge system, and administration
  building from a Mr. Erickson
• They did not take all the land Erickson owned and
  left a remnant of 1.3 acre plus the house
• Erickson appealed the judgment and claimed that
  the contemplated use would damage his remainder

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The Erickson Tract Taking
Sewer Plant Office
Erickson House
Erickson Tract Remainder
Area of Taking Formerly Erickson Tract
Waste Water Treatment Plant
32
Appeals Court

• The Court sets out important rules in this case
• When no part of an owners land is taken, and the
  use of adjoining land causes damage, the damage
  is not compensable unless it is peculiar to the
  adjoining land and not the type suffered by the
  public in general
• Where there is a partial taking, the injured
  owner is required to show damage peculiar to the
  remaining property and this becomes part of the
  compensation
• When the use of the land taken constitutes and
  integral and inseparable part of the single use,
  the government will be required to take the
  entire whole

33
Why Not Future Value?

• In Board of Education v Baczewski (1992) a
  Michigan School District condemned 110 acres of
  land for a future school
• The Board admits that it may continue to use the
  present High School for another 30 years
• It admits that it took the land to save money
  because of increased prices in the future
• Should the Board have paid on future value rather
  than current fair market value?

34
Court Rule

• School Board officials would not have been
  performing their duties had they waited for the
  present school to deteriorate before they
  purchased land
• Fair market value is all that is required

35
Eminent Domain An Analysis of Kelo v. New London

• For violent fires soon burn out themselves.
  Source W Shakespeare The Tragedy of King
  Richard the Second (Gaunt at II, i)

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Outline

• Background
• Analysis
• Implications
• Conclusion

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Eminent Domain

• Defined by Webster's as the right of the
  government to take property from a private owner
  for public use by virtue of the superior dominion
  of its sovereignty over all lands within its
  jurisdiction

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Background

• New London is in a long economic recession
• Kelo purchased a house in the Fort Trumbull
  neighborhood
• Pfizer builds a multimillion dollar research
  facility adjacent to the neighborhood
• New London Development Corporation, a private,
  non-profit organization, is reactivated
• The City of New London calls for complete
  redevelopment of the entire deactivated Fort
  Trumbell Area housing parks businesses

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The Actions

• After the development plan was approved by the
  city, the NLDC began negotiations with the
  landowners of the area for the purchase of their
  property
• The development area consists of 115 parcels in
  addition to the 32 acres of land formerly
  occupied by the U.S. Naval base.

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Background

• NLDC plans a mixed use development with a high
  end hotel, condos, and retail development
• Area contains approximately
• Of the115 privately owned parcels, 15 parcels are
  owned by the seven petitioners who are unwilling
  to sell
• City of New London initiates condemnation at the
  request of the NLDC

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Suzette Kelo et al Take Exception
"There is no amount of money that could replace
our homes and our memories. This is where we
chose to settle, and this is where we want to
stay. This is America, the home of the free,
isn't it?
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(No Transcript)
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Brief of the Petitioners

• Want a bright line rule prohibiting eminent
  domain for economic development
• Condemnation was unconstitutional
• Economic development is not a valid public use
  under the Fifth Amendment
• Affirming the condemnations will promote more
  cities to condemn property

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Brief of the Petitioners

• Argues that the use of eminent domain amounts
  subsidizing private projects
• Relies on their interpretation of Berman and
  Midkiff in their arguments
• Want a reasonable certainty of success for any
  property condemned

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Brief of the Respondents

• Court should adhere to its deference to
  legislatures and hold that economic development
  constitutes a public use
• Exercise of eminent domain authority by the
  respondents in this case satisfies the public use
  requirement
• Courts opinion in Berman and Midkiff validate the
  condemnation

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Brief of the Respondents

• Economic development constitutes a public use
  because it is rationally related to a conceivable
  public purpose
• Respondents feel that there is no need for
  greater oversight on the part of the judiciary

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Opinion of the Court

• Court ruled for the respondent by a 5-4 margin
• The court upheld the ruling that the proposed
  development was a public use within the takings
  clause.
• NLDC had a carefully formulated development plan
• Area was judged to be sufficiently distressed to
  justify economic rejuvenation
• Economic development is a governmental function
  that cannot be separated from other functions

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Opinion of the Court

• Supreme Court ruled that economic development
  constitutes a public use
• Consequently, eminent domain can be used to
  assemble parcels and eliminate holdouts
• Court reminded the parties that individual states
  can enact legislation either prohibiting or
  allowing eminent domain for economic development

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Implications

• The use of eminent domain as a major tool for
  public/private alliances in local economic
  development
• State and Federal legislation prohibiting eminent
  domain for economic development
• Pending legislation that will limit or prohibit
  the powers of condemnation.

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Comment/Observations

• Berman v Parker, 1954
• n 1945, the United States Congress passed the
  District of Columbia Redevelopment Act of 1945 to
  address the vast blighted area found in the
  District of Columbia
• The Act created a commission of five members
  called the District of Columbia Redevelopment
  Land Agency and granted it the power to redevelop
  blighted areas and eliminate any "blighting
  factors or causes of blight." The act granted the
  Agency the power of eminent domain if necessary

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Findings

• After five years of planning, the Planning
  Commission published its results and determined
  that in one blighted area, Area B "64.3 of the
  dwellings were beyond repair, 18.4 needed major
  repairs, only 17.3 were satisfactory 57.8 of
  the dwellings had outside toilets, 60.3 had no
  baths, 29.6 lacked electricity, 82.2 had no
  wash basins or laundry tubs, 83.8 lacked central
  heating
• The population of Area B amounted to 5,012
  persons, of whom 97.5 were Negroes

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The Supreme Court Weighs In

• Justice Douglas
• We do not sit to determine whether a particular
  housing project is or is not desirable. The
  concept of the public welfare is broad and
  inclusive. The values it represents are spiritual
  as well as physical, aesthetic as well as
  monetary. It is within the power of the
  legislature to determine that the community
  should be beautiful as well as healthy, spacious
  as well as clean, well-balanced as well as
  carefully patrolled. In the present case, the
  Congress and its authorized agencies have made
  determinations that take into account a wide
  variety of values. It is not for us to reappraise
  them. If those who govern the District of
  Columbia decide that the Nation's Capital should
  be beautiful as well as sanitary, there is
  nothing in the Fifth Amendment that stands in the
  way.

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And

• On public use
• Here one of the means chosen is the use of
  private enterprise for redevelopment of the area.
  Appellants argue that this makes the project a
  taking from one businessman for the benefit of
  another businessman. But the means of executing
  the project are for Congress and Congress alone
  to determine, once the public purpose has been
  established.
• The public end may be as well or better served
  through an agency of private enterprise than
  through a department of government - or so the
  Congress might conclude. We cannot say that
  public ownership is the sole method of promoting
  the public purposes of community redevelopment
  projects. What we have said also disposes of any
  contention concerning the fact that certain
  property owners in the area may be permitted to
  repurchase their properties for redevelopment in
  harmony with the over-all plan. That, too, is a
  legitimate means which Congress and its agencies
  may adopt, if they choose

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Actions

• The Commission's plans made "detailed provisions
  for the types of dwelling units and provides that
  at least one-third of them are to be low-rent
  housing with a maximum rental of 17 per room per
  month." The Commission then held a public
  hearing, after which the plan was approved
• After approval of the plan, owners of a
  department store in the area designated to be
  redeveloped brought suit to the court. The
  landowners claimed that because the department
  store itself was not blighted, its redevelopment
  was not necessary and would not constitute a
  public use. The owners further argued that taking
  the land under eminent domain and giving it to
  redevelopers amounted to "a taking from one
  businessman for the benefit of another
  businessman

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Bermans 704 S.W. 4th Washington DC
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Conclusion

• TAKE HOME POINTS
• Coverage by popular media is incomplete
• Given the precedent set in Berman and Midkiff,
  the decision was predictable
• Eminent domain for economic development is
  constitutionally valid
• State Legislatures are free to do as they wish

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Questions? Comments?