Before the publicity surrounding the Kelo v. City of New London case in 2005, it was not widely known that the American government had the power to seize citizens’ property. Under the legal principle of “eminent domain, the government – or any company or individual acting with government approval – may take the home and land of a resident for “public use” without needing the person’s consent. Although this process predates the U.S. Constitution and is not forbidden by it, the Fifth Amendment does state that the government shall pay “just compensation” to the owner for property taken for “public use,” and the Fourteenth Amendment extends this obligation to the states. In practice, however, many citizens have had their property rights erased and received nothing in return.
Exercising its power of eminent domain, a local, state or federal government entity can transfer ownership of the entire property outright, if it chooses. The government can also reduce the value of a property via regulation, or by conveying lesser rights such as an easement, which allows use of the property by others while the owner retains title. A common situation is that a court grants an easement for a driveway across a landowner’s property, which gives the landowner’s neighbor access to land which is otherwise cut off from the roadway. Even more frequently, eminent domain has been exercised to enable the accumulation of adjacent land necessary for railroad tracks, utility lines, roads and oil pipelines.
The process by which the government exercises its power of eminent domain to take a citizen’s property is by filing a “condemnation action” with a court. In some areas, the government is required to make an offer to buy the rights from the owner before filing suit. Courts have usually held that the “just compensation” mandated by the Constitution is the fair market value of the property, or the reduction in fair market value if less than the whole property is taken. However, courts have frequently decided that the government’s negation of property rights through regulation or outright seizure does not amount to a “taking” under the Constitution unless it results in a complete or near-total loss of use and value. According to these courts, no compensation is required when there is no Fifth Amendment “taking,” despite significant economic harm to the owner.
Property owners have not had much success in recent years arguing that government takings are unconstitutional because they are not for “public use,” either. Debatable “public use” justifications for government seizures of privately owned land and buildings have been held legal by the courts, such as trying to ensure public safety in the underground mine fires of Centralia, Pennsylvania and – as in the Kelo v. City of New London decision – potentially enhancing economic development. In the Kelo case, the U.S. Supreme Court accepted the contention of the New London officials that the public would benefit from promised increased tax revenues and jobs, so the city was allowed to forcibly transfer ownership of all of the homes and land in a neighborhood to a developer, who paid one dollar per year for these rights. In reality, no good has come from the government’s seizure of private property in New London, even after the expenditure of $80 million in tax dollars, since the developer abandoned the project and the land stands vacant today.
In some cases, a citizen faced with the loss of his or her property has successfully argued to the court that the legislature did not pass a law authorizing a particular taking, or that other substantive or procedural rules were not followed by the government. However, these winning arguments may have only delayed the inevitable government confiscation of property.
Furthermore, the government’s authority under the principle of eminent domain to take property from any citizen applies to other personal holdings, not just real estate. Intellectual property such as copyrights, patents and contract rights may also be nullified by the various government entities, or by companies or individuals who persuade the officials to transfer the rights to them in the name of the public good. In the 1982 case of City of Oakland v. Oakland Raiders, the California Supreme Court held that the city could legally take the franchise rights for a professional sports team from a private owner under the Fifth Amendment, as this was qualified as a public use. Luckily for the team owner, the court ultimately found the taking unconstitutional for different reasons, under the Interstate Commerce Clause.
Some legal scholars and members of the public believe the power of local, state and federal government to confiscate private property is too great, and has expanded in practice beyond what is actually allowed under the Constitution. Although President Bush responded to the Kelo case described above by passing an executive order which restricted government takings, it applied only to the federal government, so that state and local entities retained their broad powers of eminent domain. The 2006 order states that the federal government can only seize property when it is “for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.”
Some states have made a commitment to preserve their citizens’ property rights by enacting laws similar to Bush’s executive order through their legislatures, and other states are contemplating such statutes. Citizens of the states of Michigan, Ohio, Oklahoma and South Carolina can have a little more peace of mind that the local and state governments will not be permitted to take away the property of a citizen to allegedly boost economic development, since these states’ highest courts have ruled that such takings are not legal under the Constitutions of those states. Nonetheless, the average citizen remains at the mercy of the government’s power of eminent domain.