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Eminent Domain

EMINENT DOMAIN

The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.

Federal, state, and local governments may take private property through their power of eminent domain or may regulate it by exercising their police power. The fifth amendment to the U.S. Constitution requires the government to provide just compensation to the owner of the private property to be taken. A variety of property rights are subject to eminent domain, such as air, water, and land rights. The government takes private property through condemnation proceedings. Throughout these proceedings, the property owner has the right of due process.

Eminent domain is a challenging area for the courts, which have struggled with the question of whether the regulation of property, rather than its acquisition, is a taking requiring just compensation. In addition, private property owners have begun to initiate actions against the government in a kind of proceeding called inverse condemnation.

History

The concept of eminent domain is not new. It has existed since biblical times, when King Ahab of Samaria offered Naboth compensation for Naboth's vineyard. In 1789, France officially recognized a property owner's right to compensation for taken property, in the French Declaration of the Rights of Man and of the Citizen, which reads, "Property being an inviolable and sacred right no one can be deprived of it, unless the public necessity plainly demands it, and upon condition of a just and previous indemnity."

Shortly after the French declaration, the United States acknowledged eminent domain in the Fifth Amendment to the Constitution, which states, "… nor shall private property be taken for public use, without just compensation."

The Fifth Amendment grants the federal government the right to exercise its power of eminent domain, and the due process clause of the fourteenth amendment makes the federal guarantee of just compensation applicable to the states. State governments derive the power to initiate condemnation proceedings from their state constitutions, except North Carolina, which gains its power through statute. The constitutional and statutory provisions require federal, state, and local governments and subdivisions of government to pay an owner for property taken for public use at the time the property is taken.

The power of eminent domain was created to authorize the government or the condemning authority, called the condemnor, to conduct a compulsory sale of property for the common welfare, such as health or safety. Just compensation is required, in order to ease the financial burden incurred by the property owner for the benefit of the public.

Elements of Eminent Domain

To exercise the power of eminent domain, the government must prove that the four elements set forth in the Fifth Amendment are present: (1) private property (2) must be taken (3) for public use (4) and with just compensation. These elements have been interpreted broadly.

Private Property The first element requires that the property taken be private. Private property includes land as well as fixtures, leases, options, stocks, and other items. The rifle that was used to kill President john f. kennedy was

considered private property in an eminent domain proceeding.

Taking The second element refers to the taking of physical property, or a portion thereof, as well as the taking of property by reducing its value. Property value may be reduced because of noise, accessibility problems, or other agents. Dirt, timber, or rock appropriated from an individual's land for the construction of a highway is taken property for which the owner is entitled to compensation. In general, compensation must be paid when a restriction on the use of property is so extensive that it is tantamount to confiscation of the property.

Some property rights routinely receive constitutional protection, such as water rights. For example, if land is changed from waterfront to inland property by the construction of a highway on the shoreline, the owners of the affected property are to be compensated for their loss of use of the waterfront.

Another property right that is often litigated and routinely protected is the right to the reasonable and ordinary use of the space above privately owned land. Specifically, aircraft flights over private property that significantly interfere with the property owner's use may amount to a taking. The flights will not be deemed a taking unless they are so low and so frequent as to create a direct and immediate interference with the owner's use and enjoyment of the property.

Actions by the government that courts do not consider takings include the publication of plans or the plotting, locating, or laying out of public improvements, including streets, highways, and other public works, even though the publicity generated by such actions might hinder a sale of the land.

The courts have traditionally not recognized the regulation of property by the government as a taking. Regulating property restricts the property owner's use and may infringe on the owner's rights. To implement a regulation, the state exercises its police power and is able to control the use of the property. Although the courts recognized a regulation as a taking in 1922, they have been inconsistent in their later rulings on this issue. In Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922), the U.S. Supreme Court ruled that coal mining under an owner's property was not a taking, despite a subsidence, or settling, of the property's surface. In 1987, the Court stated that regulations that are excessive require compensation under the Fifth Amendment (First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 107 S. Ct. 2378, 96 L. Ed. 2d 250 [1987]). More recently, the Court determined that regulations that strip property of value or that do not substantially advance legitimate state interests are takings for which compensation is required (Nollan v. California Coastal Commission, 483 U.S. 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677 [1987]).

In a case examining a moratorium imposed on development in the Lake Tahoe area, the U.S. Supreme Court has decided that a moratorium on development is not necessarily a taking, and that regulatory takings cases must be decided on a case-by-case basis rather than on categorical rules, Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, 535 U.S. 302, 122 S. Ct. 1465, 152 L. Ed. 2d 517 (U.S., Apr 23, 2002) (NO. 00-1167). In that case, the Tahoe Regional Planning Agency had imposed a moratorium on construction and development that lasted almost three years while the agency devised rules to protect the water quality of Lake Tahoe on the California-Nevada border. Some of the property owners sued, claiming that the moratorium constituted a categorical taking because they were deprived of all economically beneficial use of the property during the period of the moratorium. In a 6–3 decision, the Court held that because the regulation was temporary, it could not constitute a categorical taking.

Public Use The third element, public use, requires that the property taken be used to benefit the public rather than specific individuals. Whether a particular use is considered public is ordinarily a question to be determined by the courts. However, if the legislature has made a declaration about a specific public use, the courts will defer to legislative intent (Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 104 S. Ct. 2321, 81 L. Ed. 2d 186 [1984]). Further, "[t]he legislature may determine what private property is needed for public purpose … but when the taking has been ordered, then the question of compensation is judicial" (Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S. Ct. 622, 37 L. Ed. 463 [1893]).

To determine whether property has been taken for public use, the courts first determined whether the property was to be used by a broad segment of the general public. The definition of public use was later broadened to include anything that benefited the public, such as trade centers, municipal civic centers, and airport expansions. The U.S. Supreme Court continued to expand the definition of public use to include aesthetic considerations. In Berman v. Parker, 348 U.S. 26, 75 S. Ct. 98, 99 L. Ed. 27 (1954), the Court ruled that slums could be cleared in order to make a city more visually attractive. The Court in Berman stated further that it is within legislative power to determine whether a property can be condemned solely to beautify a community.

State courts have also expanded the definition of public use. The Michigan Supreme Court even allowed property to be condemned for the private use of the General Motors Company, under the theory that the public would benefit from the economic revitalization a new plant would bring to the community (Poletown Neighborhood Council v. City of Detroit, 410 Mich. 616, 304 N. W. 2d 455 [1981]).

Just Compensation The last element set forth in the Fifth Amendment mandates that the amount of compensation awarded when property is seized or damaged through condemnation must be fair to the public as well as to the property owner (Searl v. School District No. 2 of Lake County, 133 U.S. 553, 10 S. Ct. 374, 33 L. Ed. 740 [1890]). Because no precise formula for determining it exists, just compensation is the subject of frequent litigation.

The courts tend to emphasize the rights of the property owner in eminent domain proceedings. The owner usually has not initiated the action but has been brought into the litigation because his or her property is needed for public use. The owner must participate in the proceedings, which can impose an emotional and financial burden.

The measure of damages is often the fair market value of the property that is harmed or taken for public use. The market value is commonly defined as the price that reasonably could have resulted from negotiations between an owner who was willing to sell it and a purchaser who wanted to buy it. The value of real property is assessed based on the uses to which it reasonably can be put. Elements for consideration include the history and general character of the area, the adaptability of the land for future buildings, and the use intended for the property after its taking. Generally, the best use of the land is considered to be its use at the time it was condemned, even though the condemnor might not intend to use the land in the same manner as the owner. Crops, grass, trees, minerals, rental income, and all other items that fairly enter into the question of value are taken into consideration when determining just compensation. The amount of compensation should be measured by the owner's loss rather than by the condemnor's gain, and the owner should be placed in as good a financial position as he or she would have been in had the property not been taken (Monongahela). The compensation should be paid in cash, and the amount is determined as of the date title vests in the condemnor. Interest is paid on the award until the date of payment.

Condemnation Proceedings

Condemnation proceedings vary according to individual state and federal laws. In general, the proceedings should be conducted as quickly as possible. A proceeding does not require court involvement if the condemnor and landowner enter into a contract for the taking of the property for a public use. A seizure pursuant to such a contract is as effective as if it were done through formal condemnation proceedings.

Condemnation usually consists of two phases: proceedings that relate to the right of the condemnor to take the property, and proceedings to set the amount of compensation to be paid for the property taken. The commencement of the proceedings does not curtail ordinary use of the condemned property by the owner as long as the use does not substantially change the condition of the property or its value.

States require special procedures for certain cases, categorized by either the purpose for which the property is sought or the character of the party seeking to take it. For example, a special procedure is required when property is to be taken for a street, highway, park, drain, levee, sewer, canal, or waterway. In a procedure called a quick taking, the condemnor is permitted to take immediate possession and use of the property, and the owner must receive cash compensation in advance of the proceeding.

The owner has the right to due process during condemnation proceedings. He or she must be notified in a timely manner and must be given a reasonable opportunity to be heard on the issues of whether the use for which the property is expropriated is public and whether the compensation is just. Due process considerations mandate that the landowner receive an opportunity to present evidence and to confront or cross-examine witnesses. The owner has an automatic right to appeal.

Due process does not require a jury trial in condemnation proceedings, although various state constitutions and statutes provide for assessment by a jury. Absent contrary state provisions, a court has the discretionary power to grant or refuse a motion for view of the premises by a jury. A condemnation judgment or order must be recorded.

Inverse Condemnation

An increase in environmental problems has resulted in a new type of eminent domain proceeding called inverse condemnation. In this proceeding, the property owner, rather than the condemnor, initiates the action. The owner alleges that the government has acquired an interest in his or her property without giving compensation, such as when the government floods a farmer's field or pollutes a stream crossing private land. An inverse condemnation proceeding is often brought by a property owner when it appears that the taker of the property does not intend to bring eminent domain proceedings.

further readings

Berger, Michael M. 1994. "Recent Takings and Eminent Domain Cases." American Law Institute-American Bar Association C930 (August).

Harris, David. 1995. "The Battle for Black Land: Fighting Eminent Domain." NBA National Bar Association Magazine 9 (March–April).

Kimsey, Paul. 1994. "Eminent Domain." Stetson Law Review 23 (spring).

Kruse, Patrick. 1995. "Constitutional Law–Eminent Domain–Riparian Landowners." University of Detroit Mercy Law Review 72 (spring).

Mancini, Vincent B. 1993. "Land Use Regulatory 'Takings' and the Eminent Domain Code." Pennsylvania Bar Association Quarterly 64 (October).

McCurdy, Claire K., and Nina M. Thompson. 1992. "What Is Eminent Domain and How Do You Do It?" Journal of the Kansas Bar Association 61 (December).

Richardson, Mark A. 1995. "A Symposium on Regulatory Takings." Detroit College of Law Review (spring).

Salley, Sara T. 1988."Eminent Domain: Supreme Court Regulatory Takings Analysis: How Nollan v. California Coastal Commission Fit In?" Oklahoma Law Review 41 (fall).

Searles, Sidney Z. 1995."The Law of Eminent Domain in the U.S.A." American Law Institute-American Bar Association C975 (January).

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Eminent Domain

EMINENT DOMAIN

EMINENT DOMAIN is the inherent right of a sovereign power to take private property for public use without the owner's consent. The Fifth Amendment of the U.S. Constitution implicitly acknowledges this right of the national government by providing that private property shall not "be taken for public use without just compensation." By the U.S. Supreme Court's interpretation of the due process clause of the Fourteenth Amendment in Chicago, Burlington and Quincy Railroad v. Chicago (1897), the same right and limitation has been attributed to state governments.

The right of eminent domain is an ancient one, and the American colonies readily utilized the concept. Numerous early colonial statutes, along with English common law, carried the philosophy of eminent domain over into U.S. jurisprudence. The scope of eminent domain, however, is still unsettled. The historic conceptual debates generally focus upon one of two questions: What amounts to a "taking," in which compensation to the owner is mandated by the Constitution? What amounts to a "public use," in which the sovereign power may exercise its right to eminent domain?

Certain sovereign actions to protect health, morals, safety, or even to "promote the general welfare" are undertaken within the government's inherent police power and, as such, are not considered takings within the eminent domain power. Courts have the task of determining what is a taking as opposed to what is a regulation within the exercise of the police power. During the last two decades of the twentieth century, the U.S. Supreme Court limited the scope of the federal eminent domain power by reinvigorating the takings doctrine. In Pennsylvania Coal Company v. Mahon (1922), Justice Oliver Wendell Holmes established the doctrine of regulatory takings. However, this doctrine was rarely employed successfully during the period between 1950 and 1980 at the Supreme Court. But beginning in the 1980s, the Court began to take a closer look at land use regulations such as environmental controls and zoning restrictions in its effort to provide greater protections to property interests. For example, in Lucas v. South Carolina Coastal Council (1992) the Supreme Court determined that regulations depriving an owner of all economically viable uses of land constituted a taking notwithstanding any public use justification.

A sovereign may not take property except for public use. Until the 1950s, courts held the narrow view that public use meant literally "use by the public": taken property could not be turned over to private owners, even if the public would benefit thereby. The modern, broader view, expressed in Berkman v. Parker (1954), is that public use means "public advantage" or "public purpose" and permits takings even when the property is subsequently conveyed to new private owners.

BIBLIOGRAPHY

Coyle, Dennis J. Property Rights and the Constitution: Shaping Society through Land Use Regulation. Albany: State University of New York, 1993.

Fischel, William A. Regulatory Takings: Law, Economics, and Politics. Cambridge, Mass.: Harvard University Press, 1995.

R. BlakeBrown
Eric L.Chase
Harold W.Chase

See alsoConfiscation of Property ; Police Power ; Property .

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eminent domain

eminent domain, the right of a government to force the owner of private property sell it if it is needed for a public use. The right is based on the doctrine that a sovereign state has dominion over all lands and buildings within its borders, which has its origins in the landholding system under feudalism. Eminent domain is implicitly enshrined in the U.S. Constitution, which in the Fifth Amendment requires that private property not be taken for public use without just compensation. The process of acquiring private property by eminent domain is known as condemnation.

Eminent domain traditionally has been used by governments to condemn land for building roads, schools, goverment buildings, and the like. The right of eminent domain may also be assigned to public and private corporations engaged in activities regarded as benefiting the public, such as the development of port facilities, the building of a canal or railroad, or the redevelopment of a blighted area. In 2005 the U.S. Supreme Court, in Kelo v. the City of New London, ruled that the Connecticut city had the right to condemn unblighted private property and transfer it to another private owner for development even if the only public benefit might be increased employment and tax revenues. Public outcry over the decision subsequently led most states to adopt legislation or constitutional amendments that limited, in varying degrees, the ability of state and local governments to use eminent domain to condemn private property for use by a private corporation. At the same time, some government officials and private developers raised concerns over how the laws and amendments would affect their ability to undertake large-scale development projects.

See also public ownership.

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eminent domain

em·i·nent do·main • n. Law the right of a government or its agent to expropriate private property for public use, with payment of compensation.

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Eminent Domain

Eminent Domain ★★½ 1991 (PG-13)

A communist party member wakes up to find himself stripped of power in a Kafkaesque purge, not knowing what he is accused of—or why. A potent premise, indifferently handled despite filming on location in Poland. Based on actual events that befell the family of scriptwriter Androej Krakowski. 102m/C VHS . Donald Sutherland, Anne Archer, Paul Freeman, Bernard Hepton, Francoise Michaud, Jodhi May; D: John Irvin; W: Andrzej Krakowski, Richard Greggson; M: Zbigniew Preisner.

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Eminent Domain

Eminent Domain

The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.

Supreme Court's Eminent Domain Case Leads to Fallout

In Kelo v. City of New London, ___ U.S. ___, 125 S. Ct. 2655, 162 L. Ed. 2d 439 (2005), the U.S. SUPREME COURT issued a controversial ruling that allows governmental units to seize private property for the purpose of economic development. The decision led the vast majority of states and hundreds of local governmental entities to consider laws that would restrict use of eminent domain.

The case that gave rise to this controversy began when the city council of New London, Connecticut approved a development plan near the Thames River. The development plan called for the acquisition of several parcels of private property. Where owners were unwilling to sell the property, the city voted to use eminent domain in order to acquire the property. The development was expected to increase tax revenue and jobs in the area, but some of the property that would be condemned would not be open to the general public.

Several residents objected to the condemnation and sued the city of New London. The case reached the Connecticut Supreme Court, which ruled that the city's plans were primarily intended to benefit the public, and this use was sufficient to establish a "public use" of the property. Kelo v. City of New London, 843 A.2d 500 (Conn. 2004). The Supreme Court granted certiorari in 2004, and a fractured Supreme Court affirmed the Connecticut court's decision. The opinion noted that the Court had historically defined the term "public purpose" broadly, and so public use could encompass an economic development plan.

Both conservatives and liberals sharply criticized the decision. Former House Majority Leader Tom DeLay (R.-Tex.) said he hoped that a major backlash would result from the case. "The only silver lining to the decision is the possibility that this time the court has finally gone too far and that the American people are ready to reassert their constitutional authority," he said.

Representative Scott Garrett (R.-N.J.) introduced a clause in an appropriations bill that would prevent federal transportation funds from being used for improvements on lands that are seized through eminent domain for anything other than a public use. Under the statute, "public use shall not be construed to include economic development that primarily benefits private entities…." Thus, a private developer who obtains land through eminent domain cannot receive transportation funds. The House approved the bill in June 2005, and the Senate approved the legislation in November. President GEORGE W. BUSH signed the bill on November 30. Pub. L. No. 109-115, 119 Stat. 2396 (2005).

Prior to the decision, eight states forbid the taking of private property for economic development through the employment of eminent domain. These states include Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina, and Washington. Within two months of the decision, an estimated 16 states were considering bills that would either ban or restrict the use of eminent domain for private economic development. On August 3, Alabama became the first state to enact this type of prohibition.

Attorneys for the Institute for Justice, based in Arlington, Virginia, represented the plaintiffs in Kelo. This public policy organization has led a grass-roots effort to urge states to enact provisions that would limit the use of eminent domain. One of the senior attorneys for the Institute said that Alabama had taken an important first step by enacting its legislation, but she said that the statute contained a loophole that could be used by government entities to condemn land for private use.

Public opinion in many areas appeared to support the limitation on eminent domain. According to a poll conducted by Quinnipiac University, 89 percent of Connecticut voters wanted the state legislature to restrict eminent domain. Similarly, a University of New Hampshire poll showed that 93 percent of residents in that state opposed use of eminent domain for economic development.

New Hampshire became the center of one of the more unusual actions in the eminent domain debate. In Weare, New Hampshire, a town warrant was introduced that would have required the city to condemn a farmhouse owned by Justice David Souter, who wrote the lead opinion in Kelo. According to reports, the farmhouse would be converted into a hotel and named the "Lost Liberty Hotel." Residents of Weare rejected the proposal by a vote of 94 to 59, choosing instead to ask the New Hampshire legislature to strengthen its eminent domain law.

The mayor of the City of New London proposed a compromise with several of the residents that were scheduled to be evicted. Under this proposal, the city would own the homes of four people whose homes were seized, and those people would pay the city to live there. Susette Kelo, who brought the suit against the city, rejected the offer, saying that she did not engage in the litigation so that she could pay rent to the city.

By April 2006, lawmakers in 47 states had introduced more than 325 measures that are designed to protect private property from seizure through eminent domain. According to a land-use specialist with the National Conference of State Legislatures, "I have never seen a response to a Supreme Court decision this dramatic." As many Democrats have introduced legislation as have Republicans. Commentators have noted that because Americans view ownership of their land as something of a sacred right, they have taken this decision more personally. Moreover, the case has increased public knowledge about what governmental entities can do with the power of eminent domain. Several experts have agreed that changes to eminent domain laws will continue to take place.

Supporters of the use of eminent domain for development note that many sites that are condemned are blighted areas that serve no purpose. Moreover, these supporters note that the homeowners who may lose their land are compensated for their loss, and that the condemnation is generally done for the greater good.

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Eminent Domain

Eminent Domain

Sections within this essay:

Background
Substantive Due Process
Property to be Taken
What Constitutes a Taking
Public Use
Justification or Necessity
What Compensation is Considered Just

Procedural Due Process
Notice
Hearing
Remedies

Additional Resources

Background

Grounded in the Fifth Amendment to the U.S. Constitution, the concept of eminent domain refers to the government's right to condemn and appropriate private property for public use. Other terms meaning essentially the same thing include "condemnation" (but that has additional implications, see below) and "expropriation." Through application of the Fourteenth Amendment, the power to exercise eminent domain is vested in both federal and state governments and subdivisions thereof (counties, cities, and towns, etc.). Such power also may be delegated to political subdivisions such as governmental agencies and local governments, as well as private persons or corporations that provide services or benefits to the public.

For years, the accepted scope of the term "public use" contemplated property being taken for such purposes as public roadways, bridges, parks, libraries, governmental buildings, utilities, etc. However, in the 2005 landmark case of Kelo v. City of New Landen, the U.S. Supreme Court made clear that the government could also appropriate property to private, for-profit real estate developers, if such development would result in economic growth for the betterment of the community.

Substantive Due Process

The Fifth Amendment (made applicable to the states through the Fourteenth Amendment), which protects individual liberties from unwarranted governmental intrusion, states in relevant part, "… nor shall private property be taken for public use, without just compensation." Importantly, the provision does not preclude such government action, as long as there has been "just compensation."

Property to be Taken

Although most often applied to real property (real estate, including buildings), in fact, any kind of property may be taken. This includes both tangible and intangible property, such as franchises and contracts.

However, not all property can be appropriated or condemned for any purpose. Many states prohibit the exercise of eminent domain for property currently being used for such purposes as cemeteries, gardens and orchards, or factories. A landowner cannot convert the use of property to one of these uses in order to avoid condemnation, once proceedings have begun (notice of intent).

Often, governmental units, particularly at the local level, begin condemnation proceedings for private property that is not needed for public use, but rather, has been deemed a risk to the public health or safety. This, in fact, is the more appropriate use of the term "condemnation," although the authority or power invoked to condemn the property is that of eminent domain.

A "dedication" of land is a similar form of appropriation of private land (or an easement therein) for public use, but is effected voluntarily by the landowner, rather than through an adverse process of condemnation. A dedication may be express or implied through the landowner's conduct and the facts and circumstances related to the property. Notwithstanding, a dedication also may arise following an adverse (to the interests and/or use of the landowner) and exclusive use by members of the public under a claim of right. Such claim, by an adverse public user, is similar to a common law "adverse possession" claim between private parties, and is predicated upon the knowledge, actual or imputed, and acquiescence of the owner. Many states provide for both common-law and statutory dedications.

What Constitutes a Taking

What is necessary in order for a "taking" to occur is not always a formal transfer of interest in the property. Rather, what is required is a destruction of a personalinterest in property, or such a drastic interference with the use and enjoyment of that property so as to constitute a taking. In other words, the impairment is so severe that it is tantamount to the assertion of a servitude on the property for the benefit of the government.

It is often the case that a landowner is not completely deprived of his property, but instead suffers a restriction or impairment of his or her right to use it. For example (and as is frequently the case), a government may need to run a utility through private property, or need to alter a shoreline such that the property is no longer on the waterfront. The property may need to be flooded to create a dam, or a building on the property may need to be relocated to make access to another point. In such cases, a partial taking may be effected, and the landowner is entitled to proportional compensation.

Still another form of taking may occur when there is no actual property being taken from a person. Instead, governmental activity on one property may so severely deplete the value of adjacent or neighboring property so as to constitute a "constructive taking," often referred to as inverse or reverse condemnation. Fumes, noises, vibrations, changes in flow of ground water, or toxic pollutants are some of the more common interferences that may constitute constructive takings. Examples include properties affected by airport noise and fumes, waterfront properties affected by rerouted water, or livestock farms affected by nearby noise or ground vibration. In each of these circumstances, property owners may be entitled to compensation from the governmental entity.

Finally, a taking need not be permanent; it may be effected and justified only under limiting circumstances. For example, in time of war or insurrection, a government may need to exercise control and dominion over lands otherwise not needed for public welfare or safety. Again, a landowner may be compensated for the temporary impairment or deprivation in his or her use of private property.

Public Use

A "public use" is generally one which confers some benefit or advantage to the public, and the term does not necessarily imply, and is not confined to, actual "use" by the public. Moreover, the purported benefit to be derived from the taking of property need not be available to the entire public; it may benefit a smaller sector of members of the public in a particular locality, i.e. a subdivision of the general public. In other words, it is not necessary that the intended users be all members of the public; rather, it is the purpose for the taking that must be for the public, and not for the benefit of any particular individuals.

The use (purpose) must be a needed one, which cannot be surrendered without obvious general loss or inconvenience. However, the parameters of such needed public use move along a spectrum, and defy absolute definition or parameter because of changing needs of society, increases in population, and developing modes of transportation and communications.

In Kelo v. City of New Landen(2005), the U.S. Supreme Court was called upon to determine whether that changing parameter was broad enough to in clude for-profit development of real estate which would ostensibly result in needed economic growth for the community. In a decision that surprised many, the Court agreed.

Justification or Necessity

It is the legislature that has the power to determine the necessity of taking property for public use, as well as the amount of property to be taken. Most takings must comport with legislative language that mandates under what circumstances such an action is justified or necessary. A formal court action objecting on grounds of taking property not strictly needed for public use, or for taking more property than needed for public use is generally referred to as an action for "excess condemnation."

If a local government deems certain property to be a hazard to the public, e.g. a health or safety risk, it may condemn the property as unfit for human occupancy following formal inspection and assessment. Usually this is accomplished by citation of violations involving local ordinances, building codes, or federal public safety regulations. During the time between condemnation and bringing the property back into conformity with relevant laws, a landowner is generallynot entitled to compensation, even though a deprivation of property rights has occurred.

What Compensation is Considered Just

Whether a proffered compensation is just or not is a judicial question. Generally, an appropriate measure is the fair market value of the property at the time of the taking, plus any subsequent accrued interest. An objecting claimant will not succeed in arguing speculative value, or the fact that the property could be used for a special purpose which would tend to enhance its value. Instead, an objective assessment of the property in its present state is the correct measure, although consideration may include assessment of market value at its best and most profitable use.

Notwithstanding, the compensation must be fair to both the property owner and the public. This assessment involves consideration of such factors as the cost of reproducing the property, its present market value, and the resulting damage or decrease in value to any remaining/residual property of the owner. It also may include consideration of the price originally paid for the property, and any buildings, crops, timber, or minerals located on the property. Additional compensation may be added for any delay in payment, as interest is recoverable when payment is not made at the time of the taking.

Procedural Due Process

An aggrieved party who objects to a government taking must have an opportunity to receive fair notice (a reasonable time to obtain legal advice and prepare a formal objection). Additionally, there must be opportunity for a fair hearing before the award (of compensation) becomes final. The hearing provides a forum to adjudicate whether or not there had been an actual taking (in the question of less than total deprivation of interest); whether the taking was for a public use; and/or whether just compensation had been made.

Notice

Prior to any governmental action to exercise its right of eminent domain, the government must negotiate in good faith with the land owner for an acceptable price for the land. Initially, most governments notify landowners of prospective action by serving a notice of intent. The contents generally describe the parameters of the property in question, the proposed use, and an offer (in dollars) of purchase. Extensive mediation and offers/counteroffers usually precede court action. A formal condemnation action only follows if an agreement cannot be reached.

Hearing

Not all condemnation proceedings are the same. State laws differ on the number of hearings and the procedural structure of each, depending on the type of property in question or the intended use. Generally, a landowner may contest both the proposed taking and the amount of compensation offered. Ultimately, if administrative appeals fail, the landowner may petition in court, under the auspices of violation of constitutional rights.

Both sides may offer witness testimony and other evidence in support of their positions. Both sides may call attention to the fair market value (by expert testimony) of similar properties for comparison. Following court decision, appeals may take years, but generally does not stay the taking; if a landowner ultimately prevails on appeal, only money damages are generally available.

Remedies

Initially, an objecting landowner may request either or both injunctive and monetary relief. However, if the government's action meets the legislative and constitutional criteria, the landowner may be responsible for court costs if the objection was not well-grounded or appears to have been motivated by excessive pecuniary interest.

In cases of partial takings or excessive takings, adjudication includes a determination of the percentage interest in a property which is adversely affected, and monetary award is prorated accordingly. Like-wise, if the complaint is for devalued property which is not directly taken, but is adversely affected because of governmental activity or use on nearby property, adjudication includes a determination as to whether other factors have devalued the property and the monetary difference between the devalued property and its fair market value without the alleged adverse effect.

Compensation is required, effective from the date of the alleged taking. Payments not made at that time accrue interest, to which the landowner is entitled. Occasionally, subsequent actions or objections are filed months or years after the initial determination. This is especially true in the case of partial takings, e.g., easements. Over time, a government entity may engage in additional activity that exceeds in scope of the initial taking. If this causes further decrease in residual use or enjoyment still vested in the original property owner, both injunctive and monetary relief may be available.

Additional Resources

Bhatnagar, Parija. "Eminent Domain: A Big Bonanza?" CNN News, 24 June 2005. Available at http://www.cnn.com

Eminent Domain information available at http://www.eminentdomainonline.com

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Eminent Domain

Eminent Domain

The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.

Mendota Golf v. City of Mendota Heights

In the wake of the U.S. Supreme Court's landmark decision in Kelo v. City of New London, 125 S. Ct. 2655 (2005), (allowing the use of eminent domain to acquire non-blighted property for economic development by private developers), at least 43 of 44 state legislatures in session considered legislation to restrict the use of eminent domain in an economic development context. (In Kelo, the majority opinion stressed that "nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power." Id. at 2668.

In an unusual twist to this expanded understanding of the law, the owners of Mendota Golf (in Mendota Heights, a suburb of St. Paul, Minnesota) tried very hard to sell their golf course for economic development, but the City of Mendota wanted to keep it as a golf course for public recreation. Could the City exercise eminent domain and "take" the property to keep it as a golf course, when in fact, the property had been zoned for development?

The Minnesota Supreme Court, in Mendota Golf v. City of Mendota Heights, No. A04-206 (2006), effectively said 'yes.' However, the real issue before the court was whether a private party, by mandamus (an order by a higher court to compel a governmental entity or lower court to act) could compel a city to change its comprehensive development plan when that plan conflicted with a zoning ordinance. The Minnesota high court held that a mandamus action was not appropriate to challenge a city's exercise of legislative discretion in denying a proposed amendment to its comprehensive plan, when there were other alternatives available to resolve the conflict. One of the ways to resolve the conflict was for the city to exercise its eminent domain power.

The 17.5-acre Mendota Heights Par 3 Golf Course was privately owned by Michael Cashill and Alan Spaulding. The property had been used as a nine-hole par 3 golf course at least since the 1960s. When the owners purchased the golf course in January 1995, the property was actually zoned as "R-1," or one-family residential property (as was the neighborhood surrounding the golf course). Under R-1 zoning, one-family detached dwellings are a "permitted use," while golf courses are a "conditional use." At that time, the city's comprehensive plan designated the property as a golf course. The state's Metropolitan Land Planning Act (MLPA), Minn. Stat. §473.858 (1994) provided that a city's zoning designations took priority over conflicting comprehensive plan designations.

However, later in 1995, the Minnesota legislature amended the MLPA to direct local governments to reconcile conflicts between zoning ordinances and comprehensive plans. Specifically, the amendment provided that if a comprehensive municipal plan conflicted with a zoning ordinance, "the zoning ordinance shall be brought into conformance with the plan … and if necessary, amendment of its comprehensive plan …"

In 2003, owners Cashill and Spaulding decided to sell Mendota Golf Course for $2.35 million to a developer who planned to convert the property to R-1 single-family residences. They entered into a purchase agreement that contained a contingency requiring "the buyer's obtaining necessary governmental approvals for proposed residential development." The developer then submitted a design concept plan to the city, but according to the minutes of the related city council meeting, the mayor and several council members indicated they would not support a plan to change the comprehensive plan to allow residential development of the property.

Cashill and Spaulding (Mendota Golf, LLP) then formally applied to have the city's comprehensive plan amended, arguing that the property was already zoned for R-1 residences. In June 2003, after holding a public hearing on the matter, the city's planning commission recommended denial of the application to amend, expressly finding that "the golf course is the best use of the property consistent with the surrounding use of the neighborhood." The city took no further action.

At this point, Mendota Golf filed a mandamus action in the local district court, asking the court to compel the city to reconcile its zoning ordinance with its comprehensive plan by approving the amendment to the comprehensive plan. The district court agreed with the owners, concluding that the city had acted in an arbitrary and capricious manner in denying the amendment. The court ordered the city to amend its comprehensive plan. The ruling was affirmed by the Minnesota Court of Appeals. The city appealed to the state's highest court.

The Minnesota Supreme Court reversed. First, it noted that a mandamus was a serious and extraordinary remedy for a court to invoke. Notwithstanding, the Court agreed that there was a conflict between the city's comprehensive plan and its zoning ordinance. More importantly, the court agreed that the city had failed to reconcile this conflict as required under the MLPA.

However, decided the Court, the answer was not to compel the city to amend its plan. Rather, noted the court, the discretionary power to zone and develop plans rested with the city council and not the courts. While mandamus was not appropriate to control or interfere with the manner in which a city exercised its discretion, mandamus was appropriate "to set the exercise of that discretion in motion."

The city did not contest its obligation to reconcile conflicts between the comprehensive plan and zoning ordinance. Rather, it objected to the mandamus that removed its discretion as to how it intended to reconcile the conflict. The Minnesota Supreme Court agreed. It remanded the matter to the district court to issue a new writ of mandamus directing the city to reconcile the conflict (rather than directing the city to amend its comprehensive plan, as the first mandamus did). A strong dissent by three of the judges noted that if the city denied a change in "use" and required the owners to operate the unprofitable golf course, this would be tantamount to an eminent domain "taking."

Ultimately, in April 2007, the city held a special election. By a narrow margin (254 votes), residents approved the city's purchase of the property to run it as a municipal golf course. Residents will pay $50 a year for the next 15 years to pay for the property.

Kelo Decision Continues to Cause Controversy

Many state and local governments continued in 2006 and 2007 to consider measures in response to the U.S. Supreme Court's decision in Kelo v. City of New London, 545 U.S. 469, 125 S. Ct. 2655, 162 L. Ed. 2d 439 (2005). The Court in that decision ruled that governmental units may seize private property for the purpose of economic development and prompted widespread calls for legislation that would curb use of eminent domain powers. However, several commentators have noted that much of the legislation that has passed will do little to protect the rights of property owners.

The Kelo decision arose when the city of New London, Connecticut approved a development plan that called for the acquisition of several pieces of private property along the Thames River. Although the plan was expected to increase tax revenue and jobs for the area, parts of the property would not be open to the general public. The Supreme Court agreed with the Connecticut Supreme Court that use of the private property for an economic development plan constituted "public use" under the law of eminent domain. The Court emphasized that its decision did not preclude states from enacting their own laws to restrict the use of eminent domain.

Critics of the Kelo decision note that the action of the city of New London represents a common practice among local governments. "By our own count, over a five-year period, we have found about 10,000 instances where a local government either used or threatened to use eminent domain in order to take a home or parcel of property from one person and give it to another," said Dana Berliner, an attorney with the Institute for Justice. "It is obviously more widespread and commonly practiced than most people could ever imagine. And it is a power that essentially allows a government entity to take any person's home away from them, to ruin their businesses or destroy their lives, whatever the case may be."

Various polls have shown that between 80 and 95 percent of Americans oppose the Court's decision, spreading across political, gender, and racial lines. By April 2006, legislators in 47 states had introduced more than 325 measures that were designed to protect private property from seizure through the use of eminent domain. Congress also expressed its disapproval, passing a bill that prohibits a private developer who obtains lands through eminent domain from receiving transportation funds. Pub. L. No. 109-115, 119 Stat. 2396 (2005).

Despite the opposition, the direct fallout has not been as severe as it might appear. Commentators note that only 14 states have enacted laws that significantly increase protection of property rights. Several other states have enacted statutes that appear to restrict the use of eminent domain but actually accomplish little. For instance, the Texas legislature enacted a statute that forbids use of eminent domain for "economic development," but it allows takings under other names, such as "community development." A number of states allow takings when the use of eminent domain will alleviate "blight," but even this tactic does not provide a significant level of protection for private land-owners. One commentator noted that previous cases have identified both downtown Las Vegas in Nevada and Times Square in New York City as "blighted" areas.

According to the Institute of Justice, which represented the property owners in Kelo, more than half of the 20 states that have the largest number of condemnations similar to those in Kelo have either passed no legislation or have passed ineffective legislation limiting the use of eminent domain. Other states, such as Pennsylvania and Minnesota, have passed effective reforms but have exempted large areas where condemnations are likely to occur, such as Pittsburgh, Philadelphia, and the Twin Cities area. According to critics, even an executive order signed by President GEORGE W. BUSH on June 23, 2006 that bans the use of eminent domain for private development does little to protect private property because it allows takings where the use will be for both private and public development.

Developers have begun to defend the use of eminent domain, noting that it has been in use since the beginning of the Republic. In some instances, it is the only tool that cities and state can use to improve run-down areas that may include numerous abandoned properties. According to William J. Kearns, general counsel to the New Jersey State League of Municipalities, "Every city has within its borders large areas of land that are sitting there unused or are in a deteriorated or dangerous condition. It would be nice if the owners of these kinds of properties would step forward and arrive at a fair market price for what they own and then sell it. But all too often, owners can't be found or have not concern about the condition the property is in, and feel no responsibility to the surrounding area. To take away a city's power to change that means huge areas of blight would remain just that, and would probably only grow larger."

Some of those who acknowledge that use of eminent domain is beneficial argue that states need to establish better criteria that the states must meet before using eminent domain for redevelopment. These individuals are concerned more with people being evicted from their homes, as was the case with the Kelo plaintiffs. Commentators have noted that though many of the state statutes are ineffective efforts to restrict eminent domain, reforms that have been enacted as part of referendums have had more success. Voters in 12 states considered referendum measures that would ban or curtail condemnation of private property to promote economic development, and these measures were passed in ten of those states. In the majority of these states, the referendums are worded strongly enough that they provide real protection for property owners.

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Eminent Domain

EMINENT DOMAIN

In his argument as counsel in west river bridge company v. dix (1848), the first case in which the Supreme Court ruled directly on the constitutionality of the states' power of eminent domain, daniel webster thundered against the whole concept of state discretion in "takings." Only in the past few years, he contended, had this power of eminent domain been recognized in American law. Claims for its legitimacy, moreover, were "adopted from writers on other and arbitrary [civil law] governments," he declared; and eminent domain could easily become an instrument for establishment by the states of "unlimited despotisms over the private citizens." Webster tried, in effect, to get the court to impose Fifth Amendment standards on the states.

Webster was engaged in a failing cause. Besides, his history was inaccurate and his predictions of disaster were simplistic. He was certainly right, however, in seeing the eminent domain power as a formidable threat to vested rights, corporate or individual. He understood that eminent domain condemnations might become a proxy for regulation under the police power, undermining the contract clause as a bulwark of property rights. He was right in raising the alarm when he did; when West River Bridge was argued there had been a vast increase in activity by government and private corporations in exercise of eminent domain. The transportation revolution in America was in an expansionary phase; extensive new railroad construction reinforced the effects on property law already felt from canal, turnpike, and bridge enterprises. All these ventures required use of the "taking" power in order to accomplish their purposes.

Contrary to Webster's version of legal history, government's power to expropriate privately owned property for a variety of public purposes had long been an element of Anglo-American law. The power of eminent domain was the power to compel transfers to government or government's assignees. In its constitutional version, even in the 1840s, it was understood as a power that could be exercised legitimately only for a public use or public purpose, and that required the payment of just compensation. In English decisions and statutes going back several centuries, in American colonial law, and in the state law of the early republic, this power of taking by governmental authority had been exercised for such purposes as road-building, fortifications, drainage (including the great Fens projects of England in the seventeenth century), navigational improvement on rivers, and construction of bridges and canals. In colonial Massachusetts, statute had extended a variant of the power into the manufacturing sector by authorizing builders of mills to dam up streams, flooding neighboring lands; these "milldam laws" provided for assessment of damages and payment of compensation in cash.

The Fifth Amendment—which the Supreme Court would rule in barron v. baltimore (1833) was not applicable to the states—expressed the views and used language already embodied in several of the state constitutions adopted during the Revolutionary era. Thus the amendment's requirement that property could be taken "for public use" and on payment of "just compensation" had been foreshadowed by such documents as the 1780 Massachusetts Declaration of Rights, which declared that "whenever the public exigencies require that the property of any individual should be appropriated to public uses, he shall receive reasonable compensation therefor."

Although several early state constitutions lacked such language, uniformly the state courts, in reviewing takings cases, ruled that general principles of justice, the writings of the natural-law jurists, or the constitutional values reflected in the Fifth Amendment justified imposition by judges of both a "public use" and a "just compensation" limitation upon their legislatures' uses of the eminent domain power. It was a singular feature of legal development in the states, however, that despite the widespread formal adoption of such limitations, in fact only slight constraints were placed on the legislatures. In practice, compensation paid to persons suffering from takings was far below market value (and, because of offsetting benefits commonly calculated against damages, often they were paid nothing in cash); hence, eminent domain became an instrument for the subsidization, through cost reduction, of both governmental enterprises and favored private undertakings. "Public convenience" became, in most states, a legitimate reading of the "public use" requirement; and in practice, the legislatures enjoyed wide discretion in deciding what types of enterprise might be vested with the power to expropriate private property. Ironically, the very bridge and railroad corporations that Webster represented so often were among the greatest beneficiaries of eminent domain devolution in that era.

The Court in West River Bridge wholly rejected Webster's contentions, ruling that state eminent domain powers were "paramount to all private rights vested under the government." It left the state courts to decide for themselves whether compensation payments were just in particular cases, or whether due process requirements of state constitutions had been met.

So stood constitutional doctrine until the adoption of the fourteenth amendment. Under its due process clause, the door was opened to challenges in federal courts of state eminent domain actions. Increasingly, too, in the late nineteenth century, the Supreme Court was called upon to rule upon the constitutionality of regulatory measures that activist state legislatures were enacting. The issue tended to take the form of defining a "taking," with the constitutional requirement it connoted, as opposed to bona fide use of the police power, which did not require compensation. The Court ruled in a succession of cases that the Fourteenth Amendment embodied the requirements of "public use" and "just compensation." It took a broad view, however, of what types of enterprise the states might aid with devolutions of the eminent domain power; in a series of cases on irrigation districts, drainage companies, individual enterprises and corporation activities in other areas such as logging and mining, and the more traditional areas of state activity, the Court upheld legislative discretion under a permissive "public use" standard.

In mugler v. kansas (1887), the Court attempted to distinguish between a taking, which required compensation, and uses of the police power, which it defined as laws abating nuisances or limiting uses of property that were harmful to "health, morals, or safety of the community," not compensable. But drawing the police powereminent domain line proved difficult; indeed, it perplexes the Court to the present day. In Pennsylvania Coal Company v. Mahon (1922), Justice oliver wendell holmes argued that the police power and eminent domain power are on a single continuum; differences are a matter of degree, not qualitative. The Court has continued to struggle with the issue, and in modern land-use zoning cases from euclid v. ambler realty (1926) to Agins v. Tiburon (1980) it has sought a firmer ground to replace the distinction Holmes found so appropriate.

The Court has upheld congressional discretion in deciding what purposes of federal eminent domain met the Fifth Amendment's "public use" requirement. In United States v. Gettysburg Electric Railway Company (1896), the Court declared acceptable any use "which is legitimate and lies within the scope of the Constitution." In United States ex rel. Tennessee Valley Authority v. Welch (1946) the Court carried the doctrine to an extreme, concluding that a congressional decision to authorize expropriation of property "is entitled to deference until it is shown to involve an impossibility." A few years later, Berman v. Parker (1954) upheld federal eminent domain takings to conduct an urban redevelopment project in the District of Columbia. Here the end was the public welfare, a "broad and inclusive" concept, the Court declared, that certainly embraced slum clearance and an urban development designed to be "beautiful as well as sanitary." Given the validity of this purpose, it was legitimate to invoke eminent domain, which was only a means. Congress must decide as to the need for the project and its design.

In its quest to develop standards to distinguish takings from legitimate exercise of the police power, the Court has probed to the heart of property concepts. What rights are "vested," how "reasonable expectations" should be defined, what obligations inhere in the ownership of private property—all are questions that come to the surface repeatedly in continuing litigation. Nearly 150 years ago, Chief Justice lemuel shaw of Massachusetts admonished, in Boston Water Power Company v. Railroad (1839), that the eminent domain power "must be large and liberal, so as to meet the public exigencies, and it must be so limited and constrained, as to secure effectually the rights of the citizen; and it must depend, in some instances, upon the nature of the exigencies as they arise, and the circumstances of individual cases." Shaw's view may have lacked prescriptive potential, but it has proved remarkably accurate in predicting the direction that the law would take—and the perplexities that would beset the best efforts of lawmakers and judges to produce definitive formulae.

Harry N. Scheiber
(1986)

(see also: Hawaii Housing Authority v. Midkiff.)

Bibliography

Dunham, Allison 1962 Griggs v. Allegheny County in Perspective: Thirty Years of Supreme Court Expropriation Law. Supreme Court Review 1962:63–106.

Grant, J.A.C. 1931 The "Higher Law" Background of the Law of Eminent Domain. Wisconsin Law Review 6:67–85.

Hurst, James Willard 1964 Law and Economic Growth: The Legal History of the Lumber Industry in Wisconsin, 1836–1915. Cambridge, Mass.: Harvard University Press.

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

Stoebuck, William B. 1972 A General Theory of Eminent Domain. Washington Law Review 47:553–608.

——1980 Police Power, Takings, and Due Process. Washington and Lee Law Review 37:1057–1099.

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Eminent Domain

EMINENT DOMAIN

The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.

Kelo v. City of New London

In June 2005, the U.S. Supreme Court resolved a dispute involving the question of the extent to which municipal governments may take private property for the purpose of economic development. In Kelo v. City of New London, __ U.S. __, __ S. Ct. __, __ L. Ed. 2d __, 2005 WL 1469529 (2005), a group of homeowners who had sought to block the City of New London, Connecticut, from condemning their homes found support from conservative and liberal organizations. Nevertheless, the Court determined that a city was within its constitutional rights to condemn private property for economic development, even though much of the property, once it is developed, will not be open to the general public.

New London suffered an economic setback in 1996, when the Naval Undersea Warfare Center closed and about 1,000 of its employees transferred to Newport, Rhode Island. In January 1998, the state bond commission in Connecticut authorized the issuance of bonds that would be used for economic development of the New London's Fort Trumbull area. About one month later, Pfizer, Inc., a pharmaceutical giant, announced that it would open a global research facility in the city. In anticipation of the opening of this center, the city considered development plans created by the New London Development Corporation (NLDC), a private entity that serves as the city's development agency.

The Pfizer facility opened in June 2001. The NLDC's development plan focused on an area of land that is about 90 acres in size. Included within this land were 115 individual land parcels. The development plans would divide this property into seven new parcels, which would be used for a hotel and conference center, marinas along the Thames River, new upscale residences, office space, and parking. The NLDC, in the preface to the development plan, stated that the development would benefit the public, due to increased tax revenue, more jobs, and improved use of the city's waterfront.

The city council of New London approved the development plan in 1998. In 2000, state agencies in Connecticut and the city council of New London approved a Municipal Development Plan (MDP). In that plan, the city authorized the NLDC to acquire properties located within the development plan's area. Under authority granted to it by the city, the NLDC voted to use the power of eminent domain to acquire properties of those residents who were unwilling to sell their property. The NLDC initiated a series of condemnation actions against several residents in the Fort Trumbull area in November 2000.

Some of the homeowners objected to the condemnation. Most asserted that they wanted to remain in their homes for personal reasons. Some of these residents had invested considerable work in their property. Other residents said that their families had lived in the homes for generations. Susette Kelo, who appeared as the named plaintiff in the case, testified that she enjoyed the view from her home. All of the residents who objected to the condemnation said that they were not opposed to the economic development but that they did not believe that the taking of their property was necessary in order to develop the land.

Several of the residents in the Fort Trumbull area filed suit against the city, seeking a permanent injunction that would bar the city from condemning their homes. The Superior Court of Connecticut reviewed the case in a seven-day bench trial . The court recognized the "conflicting dreams" of the residents and the city. "The plaintiffs wish to live out the typical American dream of abiding and owning in peace homes and property that they have chosen," the court wrote. "Any threat to that dream is understandably forcefully and emotionally opposed as it should be in a free society." On the other hand, the court recognized that the city's desire in these plans was to improve the city's economic and social well-being. Kelo v. City of New London, No. 557299, 2002 WL 500238 (Conn. Super. Mar. 13, 2002).

Section 11 of Article 1 of the Constitution of Connecticut provides: "The property of no person shall be taken for public use, without just compensation therefor." The plaintiffs argued that the city's exercise of eminent domain violated the Connecticut Constitution, state statutory provisions, and New London's city charter. Additionally, the plaintiffs maintained that the plan violated their equal protection and due process rights. The trial court rejected each of these arguments as they pertained to a parcel, named Parcel 3, that would contain office space and parking. However, the court enjoined the city's taking of another parcel, named Parcel 4A, which would be used for parking space, because plans for that parcel were "too vague and uncertain to allow the court to conclude the takings here are necessary and would not be unreasonable." Kelo v. City of New London, No. 557299, 2002 WL 500238 (Conn. Super. Mar. 13, 2002).

The parties cross-appealed the trial court's decision to the Connecticut Supreme Court. In a 4-3 decision, the court rejected all of the plaintiffs' arguments. The court held that the city's plans were primarily intended to benefit the public, and that this plan was permissible under the state's constitution and statutes. Moreover, the court found that the trial court had failed to give proper deference to the legislative decisions of the city. The court affirmed the denial of injunctive relief and reversed the trial court's decision to grant the injunction related to Parcel 4A. Kelo v. City of New London, 843 A.2d 500 (Conn. 2004).

The plaintiffs filed a petition for writ of certiorari with the U.S. Supreme Court on July 19, 2004. The Court granted the petition on September 28. Commentators suggested that the Court's decision "will determine whether private ownership has any meaning left or whether we really live in a command economy, like the old Soviet Union, where government can expropriate property whenever it is profitable to do so." Supreme Court precedent has given wide latitude to municipalities to determine whether taking of property is "necessary." In a 1954 decision, Berman v. Parker, 348 U.S. 26, 75 S. Ct. 98, 99 L. Ed. 2d 27 (1954), the Court concluded that a city could consider aesthetic reasons in determining whether to condemn property.

Twenty-five amicus curiae briefs supported the plaintiffs' position in the case. Organizations that filed these briefs included such traditionally liberal entities as the National Association for the Advancement of Colored People and the American Association of Retired Persons, along with such traditionally conservative groups as the Cato Institute and the Pacific Legal Foundation. Many of these organizations generally expressed concern that property owned by certain groups, such as minorities or churches, could be targeted by cities for condemnation without any restraint on the government's power.

In an opinion written by Justice John Paul Stevens, the U.S. Supreme Court affirmed the Connecticut Supreme Court's decision. According to Stevens, even though the city could not take the plaintiffs' land in order to confer a private benefit on a particular private party, the city could take the property pursuant to a carefully considered development plan. The Court noted that it has applied the term "public purpose" broadly, and even though much of the property in question would not be open to the general public, the term is sufficiently broad to include a development plan that would add jobs and revenue to the city. In reaching its decision, the Court noted that it would show deference to the city's decisions regarding the property. Kelo v. City of New London, __ U.S. __, __ S. Ct. __, __ L. Ed. 2d __, 2005 WL 1469529 (2005).

Justice Sandra Day O'Connor, joined by Chief Justice William Rehnquist and Justices Antonin Scalia and Clarence Thomas attacked the majority's decision. According to O'Connor, the Court abandoned long-established principles that the government cannot take property from one private person and give it to another. "Under the banner of economic development," O'Connor wrote, "all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded—i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public—in the process."

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