Eminent Domain, Imminent Theft

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http://www.propertyrightsresearch.org/2005/articles04/eminent_domain.htm

 

Eminent Domain, Imminent Theft

 

 

(Note: This is one outstanding article!)

 

March 1, 2005

 

 

By Pejman Yousefzadeh

 

Tech Central Station

 

P.O. Box 33705

Washington, DC 20033

800-619-5258

 

http://www.techcentralstation.com

 

To submit a Letter to the Editor: nschulz

 

 

We believe that our homes are our castles, which is why it rightly

angers us when someone invades the sanctity and privacy of our homes.

Usually, we associate burglars and other criminals with this kind of

invasion. But if you think that keeping your home and property safe

from outlaws is your only concern, I have bad news for you. You also

have to worry about whether the government can take your property away

from you.

 

 

 

On Tuesday, February 22, the Supreme Court heard arguments in the case

of Kelo v. City of New London. This bulletin gives a good accounting

of the case, but to summarize, in November, 2000, petitioner Susette

Kelo was informed of a notice posted on the door of her home that she

had four months to vacate her home or else police would remove her and

her belongings via the power of eminent domain -- a power that the

city of New London [Connecticut] had transferred to the New London

Development Corporation (NLDC), a private non-profit organization.

 

 

 

Eminent domain power extends from the Fifth Amendment's statement that

property shall not be " taken for public use, without just

compensation. " In addition, the Supreme Court ruled in Berman v.

Parker that private property can be seized through eminent domain when

the property is blighted and the government wants to institute an

urban renewal project. New London claims that it has offered Susette

Kelo and other petitioners a fair price for their land, a claim which

they say satisfies the " just compensation " requirements of the Fifth

Amendment.

 

 

 

But the " urban renewal " loophole is large enough to drive a truck

through. Consequently, local governments have abused eminent domain by

claiming that it is being done in the name of urban renewal. This

editorial, written by lawyer and blogger Tim Sandefur (who wrote a

brief in favor of Susette Kelo and the other petitioners), reveals

just how far the abuse has spread:

 

 

 

" . . . In the early 1980s, the General Motors Corp. persuaded the city

of Detroit [Michigan] -- reeling from recession -- to condemn a

neighborhood called Poletown (due to the many Polish immigrants there)

and sell it cheap to GM to build an auto factory.

 

 

" The Michigan Supreme Court held the condemnation was legal: If the

government declared a condemnation would benefit the public, the

courts would not stand in the way. In a whirlwind of litigation that

lasted only a few weeks, neighbors watched as their community was

pulverized.

 

 

" The Poletown decision led to an epidemic of eminent domain abuse. In

1999, the city of Merriam , Kansas , condemned a Toyota dealership to

sell the land to a BMW dealer instead.

 

 

 

" That same year, Bremerton , Washington , condemned 22 homes to resell

the land to private developers. In one notorious case, billionaire

Donald Trump convinced Atlantic City , New Jersey , to condemn an

elderly widow's home so he could build a limousine parking lot. "

 

 

 

In Kelo, the attempted exercise of the NLDC's eminent domain power was

spurred by the decision of Pfizer, Inc. to build a $270 million

research facility in the city of New London -- a decision that caused

the city of New London to adopt a redevelopment plan that would

ultimately affect the land currently owned by Kelo and the other

petitioners. But as University of Chicago law professor Richard

Epstein (who also wrote a brief on behalf of Susette Kelo and the

other petitioners) informs us, " New London still hasn't found any

viable projects to put on the nearly 90 acres of prime property it

already owns. " This -- as law professor Stephen Bainbridge points out

-- means that it is not certain what the petitioners' land will be

used for. Additionally, Susette Kelo has refurbished her home, and her

neighborhood -- while depressed in value -- is not " blighted. "

 

 

 

As such, the NLDC is not trying to take land for a " public use " such

as a public works project, but rather, it is taking land that is not

blighted in order to institute vague and unformed businesses and

development projects that will generate higher revenues for the city.

If this is not an abuse of the eminent domain power, it is difficult

to conceive of a situation that is.

 

 

 

But conceive of a situation the Justices did during oral arguments in

Kelo. At one point Justice Sandra Day O'Connor asked the attorney

representing the city of New London whether eminent domain could be

exercised in a situation where the government takes the property of a

smaller business in order to give it to a larger one. The city

attorney answered that under such a hypothetical, the government could

indeed exercise eminent domain. Under this reasoning, not only will

you have to lose your homes for development plans that are still up in

the air, the local coffee shop may have to give way to a Starbucks,

the local bookstore may have to surrender its property to the creation

of the latest Borders outlet, and the local video store may have to

vacate in favor of the creation of yet another Blockbuster franchise

-- all because a Starbucks, a Borders and a Blockbuster could give

local governments more tax revenue.

 

 

 

In none of these hypothetical situations is the " public use "

requirement satisfied.

 

 

 

In none of these situations is an " urban blight " finding required.

 

 

 

All that is required under the argument of the New London city

attorney is that a local government must find that a current and

existing business would yield less tax revenue than a potential

incoming business would, and that government could exercise its power

of eminent domain.

 

 

 

While the public seizure of private real property is scary enough, the

power of eminent domain can be abused still further. This article

calls for the exercise of eminent domain by local governments to take

away the patents drug companies own on their products and give those

patents to companies that will agree to sell pharmaceutical products

at lower prices. Never mind the already heavy financial burden on

pharmaceutical companies to perform the necessary research and

development on their products. And never mind that drug companies will

be less inclined to engage in research, justly worried that their

inventions could be appropriated under this newfangled vision of

eminent domain abuse. After all, what incentive is there for drug

companies to come out with new products and engage in costly and

time-consuming research if their property rights are not respected?

Millions of Americans will have their lives negatively impacted by

additional barriers against pharmaceutical research, development and

distribution.

 

 

 

Blogger and attorney Marty Lederman reports that the oral argument

session in Kelo appear to have gone poorly for the petitioners and

that this could be the tiding of bad things to come when the Supreme

Court ultimately rules. We should all hope that Lederman's impressions

are incorrect. The abuse of eminent domain has reached worrisome

levels, and if unchecked, will lead to disastrous policy consequences.

It is heartening to see that a vigorous fight is being waged against

such abuse, but such abuse can only be stopped by victories in cases

like Kelo.

 

 

If you are a producer or reporter who is interested in receiving more

information about this article or the author, please email your

request to interview

 

Copyright 2005, Tech Central Station.

 

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