Legal Affairs Debate Club - Banning Bans On Eminent Domain?

DEBATE CLUB 2/27/06

Banning Bans On Eminent Domain?

Judy Coleman and Steven D. Anderson debate.

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Last year's Supreme Court ruling that permitted local governments to seize private homes for public projects also benefiting private developers has stirred almost every state legislature to curb that power. The National League of Cities opposes this broad, bipartisan movement on grounds that it is crippling the ability of government to take private property for the public good.
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A reader asks of last week's debate: What about judicial elections?

Are new laws the best response to the problem? Wouldn't the reform be more effective if it sought to make local politics more responsive to needs of communities, rather than passing laws that aren't likely to thwart partnerships between government and wealthy developers?

Judy Coleman is a third-year student at Yale Law School and editor of the Yale Law Journal's online magazine The Pocket Part. Steven D. Anderson is an attorney and serves as Coordinator of the Castle Coalition at the Institute for Justice.

Coleman: 2/27/06, 07:19 AM
First, I want to applaud the efforts of the Institute for Justice and the Castle Coalition in building a powerful grassroots movement that has reinvigorated politics at the local, state, and federal levels. The Coalition's response perfectly illustrates how interactions between courts and legislatures and popular movements are supposed to look.

I've read many of the letters to the editor that followed Kelo, as well as much of the blog commentary. There's a lot of rights-talk going on here, but the real culprit here is political alienation - a problem that is profound, and pervasive. It's not necessarily connected to the distinction between public use and private benefit that these proposed laws are primarily concerned with. Government takings for government use have incurred just as much wrath over the decades as takings for private use. What's missing here is clean-government reform, not takings reform.

I'd like to propose three questions for us to tackle over the course of the debate:

Why are the legislatures the best place to start this fight?
Having chosen the legislatures, how do you design a law to address a problem with such deep roots?
Public entities have certainly embarked on their share of misguided development projects without private sector beneficiaries. In this environment of outrage, is there room left for eminent domain at all?

Tacking a crack at the first question, the public is now on guard about its property rights, and other branches of government may be able to respond sufficiently on their own. New laws that come out of this process, on the other hand, may be overbroad or, alternatively, gutted by interest group politics. Why can't we trust the existing system to handle this problem now, without the passage of potentially sloppy laws?

Take the executive branch, for example. Here in Connecticut, Governor Jodi Rell requested a moratorium on government takings, forcing the New London project at the center of the Kelo case to come to a halt. Rell and the New London city managers are currently in a mediation to attempt a compromise solution. This is basic democratic politics. Elected leaders don't need a new law to tell them their jobs are on the line. If they do, then the problem is too big for one little law to fix.

Judges also have a helpful role to play. The recent Michigan decision County of Wayne v. Hathcock developed a multi-part test to address the issue. Common law tests like this one might provide greater flexibility than a law that ties the hands of government. No statute can enumerate the many different considerations that should go into decisions about the fate of these projects.

Perhaps this is one area where state judges have more room, more independence, and greater competence than legislators to make the rules. The courts (here in Connecticut at least) have been a great venue for the prosecution of corruption in mayor's offices across the state. If we see local government officials as pests, judges may be able to design the better mousetrap.

Anderson: 2/27/06, 02:40 PM
Thanks, Judy. I'm looking forward to our debate this week. We've done what we can to raise awareness about the abuse of eminent domain around the country, and our efforts have certainly been enhanced by the Court's decision in Kelo. Nothing quite inflames the passion of the American people more than this nation's highest court saying their homes, small businesses, farms, and even their churches can be taken by the government on the mere possibility that the property would provide more tax revenue or jobs as something else.

Regarding your first question, it's not so much that legislatures are the place to start the fight—it's where we've been relegated after Kelo. To be sure, our litigation will continue under state constitutions—we just argued a case in Ohio—but since state laws allow this type of abuse, the place to fix law is in the legislature.

I too worry about the responsiveness of lawmakers and the interest-group politics public choice theory warns us against, but what we saw in Michigan with County of Wayne v. Hathcock (and what we'll hopefully see in Ohio with Norwood v. Horney) took over two decades to happen. In eminent domain cases, judges routinely defer to legislative determinations on this issue—legislatures, and not the courts, often decide what constitutes a "public" use as well as what meets the (typically over-broad) definition of blight. The outrage is now, and elected officials are where it needs to be aimed.

As both Justices O'Connor and Thomas correctly point out in their dissents in Kelo, the problem of eminent domain abuse disproportionately affects those with less money and influence in the political system. This is no doubt indicative of a larger political alienation problem, but I don't believe eminent domain reform can only come with clean-government reform. (As an aside, the so-called "clean government" movement is now employing campaign finance laws to quash the First Amendment rights of the politically unpopular. "Clean" government, in reality, is becoming merely "big" government, but that is a debate for another day.)

In every poll taken on the subject, everyone in the country who is not a municipal official, planner or developer almost universally rejects the use of eminent domain for private development. This is an issue that resonates profoundly with individuals of all philosophical and ideological stripes, striking at one of the things that makes this nation unique—the ability to keep what you've worked hard to own.

I'm far more optimistic that real reform will happen through the legislature, as it has already in some form in South Dakota, Alabama, Texas, and Michigan. The issue's a simple one and there are simple solutions, ones we'll obviously talk about this week. But here's the bottom line: no matter where the changes come from they must do two things—restore common sense limitations on the power of eminent domain and reform states' blight or urban renewal laws.

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Coleman: 2/28/06, 09:36 AM
Good morning, Steven.

I'll start with your last line first: How do you legislate common sense?

The difference between good public use and evil private development is largely intuitive. You know a terrible taking when you see one. It is precisely in areas like this where lawmakers run into trouble. Why don't we just define pornography? Why is it so hard to determine how much religious imagery in courtrooms is too much? Common sense doesn't always have the answer. We might see it as a "simple problem" because there are truly egregious examples out there—the yacht club that's replacing a working-class Florida neighborhood comes to mind. The difficult cases don't make good news stories.

So how does the IJ's model legislation stand up to the problem of difficult cases? It's clearly the product of much thought and great brainstorming sessions. Still, I see areas where judges could make room to defer to local government if they wanted to. For example:

What constitutes a public nuisance? Some courts have seemed eager to expand "nuisance" to include crime, drugs, and guns. If Susette Kelo lived in gang territory, would her case be different?
Your definition of blight in the model statute also includes "attractive nuisance"—isn't that blowing the door wide open for cities to condemn property?
Eminent domain would be allowed only when it is "reasonably necessary" for a public use. Even the Supreme Court trips over itself in determining what is "necessary and proper"—and it tends to err on the side of thinking most everything is necessary.
What does it mean for property to be "for" economic development? Entirely for, somewhat for, incidentally for? The real action of the model legislation is in that idea, but that seems to me a "know it when you see it" kind of question.

The point of doing this "issue spotting" is to show that if we have (1) a very cynical view of local politicians and (2) a very limited optimism that judges will compensate for it, the problems are just going to continue, as those two groups learn how to manipulate statutory language to allow some of the "bad" projects in, as well.

And it could be problematic vice-versa, too. A judge could adopt a very narrow conception of nuisance, or read "reasonably necessary" to mean "absolutely necessary" and end up blocking projects we might think of as promising, if not "good." It seems that legislators, at least, see this latter risk most clearly—IJ has had to fight new battles to get legislatures to pass the strong, rather than the weak versions, of the eminent domain laws.

To believe that these laws can overcome the risks of wayward interpretation, we have to believe that the background assumptions have changed in the rest of the system. If common sense is as common as you seem to think it is, would we really need new laws, after all?

Anderson: 2/28/06, 08:41 PM
What I advocate is not legislating common sense, but rather returning some common sense to the application of this nation's eminent domain laws—common sense shared by more than 90% of the public. Leaving that aside, the problem is not one of "good public use" versus "evil private development," the problem is whether it's right to take property from one person and transfer it to another private party. I don't make judgments about how "promising" a project is, I judge on the basis of where the property ends up. If it's not ultimately owned and used by the public, then transferring it is wrong, both morally and constitutionally.

Until the 1950s, with very few and limited exceptions, the power of eminent domain was restricted to those situations where the public actually owned and used the property after it was taken, for things like roads, courthouses and post offices. Everyone we talk to understands, though some do it grudgingly, that the government can take property for these reasons. But they are completely baffled by the Court's outrageous decision that government can take property for a shopping mall or big-box store. That's the common sense I'm referring to—and it's a return to a more meaningful understanding of public use that the Castle Coalition is trying to accomplish through our "Hands Off My Home" campaign and related legislative efforts.

Beginning with Berman v. Parker, a 1954 U.S. Supreme Court case, the Public Use Clause has slowly eroded, so much so that exceptions have now become the rule. The Berman court held that the removal of "blight" was a public "purpose" under the Fifth Amendment (and did so with very little law to back it up)—a subtle but significant shift in the Court's understanding of the Public Use Clause. Later, Hawaii Housing Authority v. Midkiff went a little farther, allowing the government to use the power of eminent domain to break up the remnants of a land oligopoly in that state. And now Kelo—by allowing the exercise of eminent domain for private commercial development—has erased the public use restriction from the Constitution. For this discussion, one common thread among these three cases is particularly important: in each, the government was specifically enabled by statute to use eminent domain.

New—or at least revised—laws are undoubtedly an important answer to the problems of eminent domain abuse. And legislatures are the one branch of government uniquely situated to react to the overwhelming public outrage on this issue. Take so-called blight laws. Under a typical state statute, an area can be considered "blighted" if it's economically or socially unproductive or undesirable or if it impairs economic values or tax revenue. Areas are also subject to eminent domain where they are obsolescent, or have diversity of ownership or faulty layout. These criteria have invariably led to abuse, as local officials pick out the neighborhood that's been targeted by a developer and then hire a consultant who knows what to do to keep the city's business: find blight. I only know of one situation anywhere in the country where the consultant didn't do so—but the city demanded a finding of blight, and the consultant reversed its opinion.

To the extent a state retains the power of eminent domain over blighted properties, our model language removes the subjective criteria that are so subject to abuse. Instead, blight is defined as something identifiable, using well-known legal concepts, like nuisance, that aren't as susceptible to bizarre interpretations by judges. And if it's necessary for a judge to comment on legal concepts, I'd rather his opinion be anchored in common law than in ideas from the Progressive Era. Reforms can include specific instructions that the judiciary not defer to local governments on the question of blight or public use, in addition to mandating a higher burden of proof.

Assuming you don't agree with the use of eminent domain for private economic development (if I can make that assumption) what solution do you propose that will allow home and small-business owners to keep what's theirs? The outrage and momentum for change is now, and the floodgates are open.

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