Public Purpose Doctrine

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The doctrine of public purpose has been used, in the course of American constitutional history, as a standard by which courts have determined the legitimacy of state eminent domain and taxation legislation. In different periods the doctrine has been mobilized to advance divergent ideological causes and varying constitutional interpretations.

The first distinct phase in the doctrine's history ran from the early nineteenth century to the 1870s, when it was prominent as a justification for new and often far-reaching uses of eminent domain and taxation. During that period the doctrine was a bulwark of positive government. From the 1870s to the world war i period, the doctrine became something quite different in the hands of conservatives who sought to enshrine laissez-faire policy as constitutional law. Arguments treating the public purpose doctrine as a limitation on government action were often prominent, in the new constitutional view of vested rights, as arguments based on freedom of contract. a third phase began in the 1930s, when state and federal courts were confronted with challenges to urban slum clearances and redevelopment projects that involved new uses of both eminent domain and taxation powers. Again the doctrine of public purpose found a prominent place in constitutional law, with legal opinion and judicial rulings seriously divided for a time as to what view of public purpose ought to prevail.

Formulation of a "public purpose" standard as a canon for testing the legitimacy of governmental action first became prominent in American decisions when states began to expand the reach of their transportation policies in the early nineteenth century. Projects such as the great Erie Canal enterprise in New York, and similar public works in other states, required powers of eminent domain for the agencies responsible for construction. When legislatures devolved the eminent domain power upon private chartered corporations that built bridges, roads, canals, and railroads, there was widespread agreement that some constitutional limitation should be formulated to prevent indiscriminate delegation of such high sovereign powers. Legal commentators and judges often invoked the Fifth Amendment's reference to public use as a limitation upon eminent domain takings of property by state authority; many state constitutions used the same phrase in their takings clauses, and even when no express constitutional limitation referred to public use the state courts read it into their law as a fundamental principle of justice. Was a privately owned turnpike corporation engaged in a "public" activity, however? How was the distinction between "public" activities and those merely "private" to be drawn?

Gradually the phrase "public purpose" assumed nearly the same standing, as a measure of legitimacy, as "public use." One of the early decisions on turnpikes, for example, acknowledged the uniquely "public" character of such roads. They were, a New York judge declared in 1823, "the most public roads or highways that are known to exist, and in point of law, they are made entirely for public use, and the community has a deep interest in their construction and preservation." A few years later, New York's chancery court upheld the exercise of eminent domain powers by a privately owned railroad corporation. It was legitimate for the state to devolve the power to expropriate, on payment of compensation, the court declared, "not only where the safety but also where the interest or even the expediency of the state is concerned." In west river bridge v. dix (1848), the earliest Supreme Court case during the first sixty years of the Republic's history where the eminent domain power was ruled upon directly, it was a direct taking by a state—not devolution of the power on a corporation—that was challenged; but the opinions in the case left no doubt that states enjoyed wide discretion in deciding what activities should qualify as "public" in use or purpose, hence were eligible to exercise the eminent domain power if vested in them by the legislatures.

A parallel development in legal doctrine reinforced the impact of the foregoing line of decisions. This other development was in riparian law and its relationship, which changed over time, to public law in the states. As the state legislatures enacted a growing body of law regulating interests in streams—fisheries, navigation, shoreline development, damming of waters for millpower—the courts were called upon to rule on the legitimate reach of the regulatory power. The courts derived from English common law distinctions between streams owned by the sovereign; streams "private in ownership but public in use" and so subject to broad regulatory control; and streams strictly private in ownership and in use, whose private character immunized owners against loss from regulation or taking without compensation. Repeatedly, lawyers and judges drew the analogy between waterways in public use and the chartered railroad, canal, bridge, and road companies that were private in ownership, yet "public" in purpose and use. The analogy lent additional legitimacy to "public purpose" as a doctrine which supported state action that forced private rights to yield to communal needs. Private companies were given special privileges in promotion of drainage, wharf facilities, supply of water to urban centers, and transportation facilities, as the Ohio Supreme Court declared in 1836, "because the public has an interest in them." Hence it was consistent to force private owners to yield to takings, for purposes of such enterprises, under eminent domain.

Although the doctrine had been used initially to support a large view of eminent domain power, it was soon employed also in support of tax-financed subsidies to private business firms. As enthusiasm for railroad construction swept the country in the middle decades of the nineteenth century, voters in hundreds of local communities and many state legislatures proved willing to extend cash subsidies—money raised through taxation—to private railroads, to guarantee railroad bonds, or to purchase stock in such railroads. Again, "public purpose" proved to be the vehicle for legitimation of such use of public funds. The Michigan high court, for example, in 1852 turned back a challenge to the constitutionality of such tax-supported aid on the ground that railroad corporations were "created for public benefit" and so were distinguishable from "strictly private corporations … [in which] private advantage is the ultimate as well as the immediate object of their creation." The landmark state case, widely followed, was Sharpless v. Philadelphia, decided by the Pennsylvania court in 1853. Termed in the court's decision "beyond all comparison, the most important cause that has ever been in this Court," the case was decided in favor of the constitutionality of state subsidies. Taxation must be for a public purpose, the court emphasized, and despite private ownership the railroad companies receiving aid represented such a purpose.

The spreading practice of extending public aid to corporations alarmed many jurists, however; and by the late 1860s, opposition to such a broad reading of "public purpose" and "public use" concepts had grown strong. Emblematic of the issue was the policy of Wisconsin, where the legislature by 1874 had authorized public, tax-supported aid to telegraph, steamship, hotel, waterworks, gas, construction, bridge, canal, river improvement, and dry-dock corporations. The constitutions of the newly admitted western states commonly designated as "public purpose" enterprises firms engaged in logging, road building, irrigation and reclamation, railroads, river improvement, and drainage for mining or agriculture. Such enterprises were routinely granted eminent domain power, and many of them received subsidies. In the East and Midwest, several states allowed manufacturing corporations of all kinds to condemn and flood lands for power sites. Such laws were defended as aid to companies with an important public purpose, comparable to the grants of similar eminent domain powers to gristmills in colonial Massachusetts. In a few states—among them Georgia, New York, Alabama, and Vermont—the courts invalidated such grants of power. In most state tribunals, however, the broad view of "public purpose" continued to prevail.

Indicative of the emerging conservative jurisprudence on the issue were decisions of Judge thomas m. cooley's Michigan court in 1870 against public aid to railroads and in 1877 against a milldam flooding act. In Cooley's view, set forth more systematically in his treatise, Constitutional Limitations (1868), "Everything that may be done under the name of taxation is not necessarily a tax; and it may happen that an oppressive burden imposed by the government, when it comes to be carefully scrutinized, will prove, instead of a tax, to be an unlawful confiscation of property, unwarranted by any principle of constitutional government." Further distinguished authority for the same view came from the Iowa Supreme Court. Chief Justice john f. dillon—like Cooley, a treatise writer who pressed his concern for vested rights on the legal profession and the courts in the late nineteenth century—wrote an opinion for the Iowa court in 1862 that struck down railroad bond aid as a confiscation of citizens' property without compensation and a violation of due process.

The conservative assault led by Dillon and Cooley soon enlisted the aid of the Supreme Court. In loan association v. topeka (1874) the Court declared unconstitutional a Kansas municipal bond issue in aid of a bridge-manufacturing company. Justice samuel f. miller's opinion for the majority denounced the use of tax funds for a "private interest instead of a public use"; and he termed it robbery to exercise the taxing power in this way. It was a sudden and surprising use of the public purpose doctrine to limit state legislative power—in contrast with its earlier use to enlarge state power and legitimate new activities.

The conservative version of public purpose did not carry the day altogether, even as the jurisprudence of vested rights was gaining ascendancy. Thus the Supreme Court repeatedly turned back assaults on state aid to railroads, with a solid majority maintaining that transportation had always been considered a "public purpose" activity and so eligible for eminent domain power and aid with tax funds. Olcott v. The Supervisors (1873) upheld the validity of local bonds issued to aid railroads in a Wisconsin municipality, in the face of efforts to repudiate them. In language squarely in the line of doctrine that had come down from james kent's views on turnpikes half a century earlier, the Court asserted that railroads had a "public highway character.… Though the ownership is private, the use is public." Use of tax funds to subsidize manufacturing companies suffered a different fate, however, in light of the Loan Association decision. Thus Clyde Jacobs calculated that from 1870 to 1910 some forty public purpose cases challenging tax aid to businesses came before the federal courts and state high courts. In thirty-nine of the forty, public aid was found invalid on the ground that it was not for a public purpose. Moreover, numerous state courts interpreted the "public purpose" provisions in state constitutions to forbid subsidies or relief payments to the blind, for example, or to farmers who had suffered from weather or crop failure.

In the Supreme Court, however, a manifest softening of the commitment to public purpose as a limiting doctrine became evident in decisions on the constitutionality of grants of taxing and eminent domain power to special-purpose irrigation districts. The Court ruled in Fallbrook Irrigation District v. Bradley (1896) that local geographical and climatic conditions required a considerable legislative discretion as to what constituted public purpose. In other cases that tested the constitutionality of using tax revenues to finance state enterprises such as public utilities and even grain warehouses, the Court moved still further toward allowing legislatures to do so. By the early 1920s public purpose as a national constitutional doctrine was no longer a major support for vested property rights or limitation upon governmental power, even though the Court, beginning with Fallbrook, explicitly treated public purpose as a fourteenth amendment issue.

The Supreme Court also abandoned in 1916 a residual doctrine that had enjoyed considerable judicial respect in many jurisdictions since the 1850s, the doctrine that "public use" (justifying takings by the state) should be interpreted as "use by the public" and not in broad "public purpose" terms. In Mt. Vernon-Woodberry Company v. Alabama Power Company (1916), Justice oliver wendell holmes, writing for the Court, declared flatly that "the inadequacy of the use by the general public as a universal test is established."

The deep economic crisis in the 1930s and the social dislocations it generated led to the third distinct phase of the public purpose doctrine's history. The application, throughout the nation, of federal aid to urban slum clearance and housing development produced challenges in both federal and state courts to the constitutionality of using eminent domain and taxation powers for such purposes. Especially where private real-estate and financial interests were given a key role in housing, the public purpose of takings and public expenditures for such programs was questioned. By 1940 such objections had been rejected, and the public programs upheld, in the courts of twenty-eight states. Many of these opinions concluded that where "public welfare" was served the public purpose test was met—a broad concept of legitimacy for eminent domain (and taxation) that found expression also in United States ex rel. Tennessee Valley Authority v. Welch (1946), a leading Supreme Court decision validating takings by a federal agency for purposes of regional development. It was for Congress to decide what was a public use, the Court declared; no "departure … [from] judicial restraint," with deference to the legislative branch, was warranted.

The language of the Welch decision was imported into state and federal courts' review of another wave of urban slum clearance programs in the 1940s and 1950s, following world war ii. In this later period, more than mere slum clearance was at issue; the urban programs often embraced comprehensive "urban redevelopment" objectives, typically employed private financial and entrepreneurial interests in the projects, and often involved sweeping condemnation programs that took land and buildings that did not fit the "slum" classification. Rejecting a public purpose challenge to comprehensive redevelopment, in which some of the property taken ended up in the hands of private developers, not government itself, a federal district court in a landmark 1953 ruling, Schneider v. District of Columbia, declared: "the term 'public use' has progressed as economic facts have progressed, and so projects such as railroads, public power plants, the operation of mines under some conditions, and, more recently, low-cost housing have been held to be public uses for which private property may be seized. Moreover, … the variation in the term from '[public] use' to '[public] purpose' indicates a progression in thought." So long as the taking is necessary to the public purpose that the legislature has determined and defined, the court concluded, eminent domain powers necessary to accomplishment of that purpose must be deemed legitimate.

The valedictory came in Berman v. Parker (1954), when the Supreme Court affirmed that public purpose was a concept coterminous with "public welfare," hence embraced objectives across a broad spectrum that included "public safety, public health, morality, peace and quiet, law and order," to list only "some of the more conspicuous examples." Once pursuit of public purpose in these terms was accepted, then eminent domain, taxation, or the state police power might be used to accomplish the goals set forth. Judicial review under the Fifth and Fourteenth Amendments was not out of the question, at least in some jurists' views. Justice felix frankfurter, for example, in a concurring opinion in Welch, wrote: "But the fact that the nature of the subject matter gives the legislative determination nearly immunity from judicial review does not mean that the power to review is wanting." In the subsequent history of taking, however, it was the eminent domainpolice power distinction, and not the public purpose doctrine, on which constitutional challenges to regulation would turn. The purposes for which eminent domain or taxation could be used did seem "nearly immune," in light of modern constitutional interpretation of the general welfare clause.

Harry N. Scheiber


Jacobs, Clyde E. 1954 Law Writers and the Courts: The Influence of Thomas M. Cooley, Christopher G. Tiedman, and John F. Dillon upon American Constitutional Law. Berkeley and Los Angeles: University of California Press.

Nichols, Philip, Jr. 1940 The Meaning of Public Use in the Law of Eminent Domain. Boston University Law Review 20: 615–624.

Scheiber, Harry N. 1971 The Road to Munn: Eminent Domain and the Concept of the Public Purpose in the State Courts. Perspectives in American History 5:327–402.

Woodbury, Coleman, ed. 1953 Urban Redevelopment: Problems and Practices. Chicago: University of Chicago Press.

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Public Purpose Doctrine

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Public Purpose Doctrine