BusinessCasualBlog.com

Outrage on Eminent Domain Ruling

In reference to Eminent Domain Ruling, June 24, 2005.

...But Thursday's Supreme Court decision doesn't mean that every city will decide to take private property from homeowners and transfer it to developers for public use in every situation.

Neil Richards, associate professor of law at Washington University in St. Louis, pointed out that the court spent a lot of time reviewing the proposed development project in New London, and that the decision really means that states have the power to decide for themselves, not necessarily that they will engage in eminent domain activities.

Richards, who teaches constitutional law, privacy law, property and legal history, pointed out an important line in the majority court opinion that says states are free to pass laws saying cities cannot take individuals' private property.

People who are worried about the possible broad implications for property rights resulting from this case should lobby for state laws to prohibit this, Richards suggests.

The question of whether the court's decision undermines individual fifth-amendment property rights is tough to answer and depends on a person's views on where property rights came from, Richards said. "If you believe that property rights are a creation of government, then no," he said, the decision would not undermine those rights. But a person who believes property rights are a natural human right would feel the opposite.

"I found this to be a very difficult case," he said. "On the one hand, property rights are important and entitled to significant protection for good reason. On the other hand, what the city was trying to do here seems like a laudable goal."

It will be interesting to see how the decision plays out in the lower courts, Richards said.

Source:  http://www.inman.com/inmannews.aspx?ID=46787

Eminent Domain Ruling

GOVERNMENT'S POWER OF EMINENT DOMAIN EXPANDED
In a landmark decision yesterday, the United States Supreme Court held that the government's power of eminent domain may be used to seize someone's private property to turn over to a private developer. This case involved the seizure of 15 homes by the city of New London in Connecticut to use the land as part of a 90-acre redevelopment project by a private developer. Although the city was designated a "distressed municipality," there were no allegations that any of these 15 homes were blighted or in poor condition.

The homeowners challenged the constitutionality of the seizure under the Fifth Amendment's prohibition against the taking of private property for public use without just compensation. The homeowners argued that the government may take their homes against their will for public use, such as to build roads or railroads, but not just to give it to another private party who intends to make more productive use of the property. Whether the homeowners would receive just compensation for the taking was not directly at issue in this case.

In its 5-to-4 decision, the Supreme Court first clarified that, under the Fifth Amendment, the government cannot take someone's private property for the sole benefit of another private party, but it can take private property for use by the public. The Court went on to uphold the government's exercise of eminent domain in this case. The Court reasoned that the taking of private property to promote the city's economic development, which includes creating new jobs and increasing tax revenues, is a public purpose that falls within the public use requirement of the Fifth Amendment.

Source: California Association of Realtors