A Place to Call Home: The Battle over Eminent Domain

By Senator Mark Norris, seen in Main Street Journal
February 17, 2006

“For a man’s house is his castle…for where else shall a man be safe, if it be not in his house?” Edward Coke, Institutes of the Laws of England, III, 1644

“All private property is held subject to the demands of a public use.” Justice David J. Brewer, Long Island Water Supply Co. v. Brooklyn, 1896

“Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more.” Justice Sandra Day O’Connor, dissenting, Kelo v. New London, 2005

Could you lose your home or business to a private developer just because your property doesn’t generate enough tax revenue to feed the government? It depends who you ask.

Recent accounts of deficits and debt in Memphis and Shelby County, coupled with rising property taxes and reports of undue influence over some local elected officials, have citizens worried. Under the United States Supreme Court’s decision in Kelo v. New London last June, they may have good reason to be.

The case sent shockwaves across the land as citizens realized, perhaps for the first time, that their homes may no longer be their castles. Not since the issue of abortion in Roe v. Wade has an issue generated such interest and indignation as the high court’s opinion of government’s right to take your property in the name of economic development.

At issue in Kelo was the ability of the New London Development Corporation to condemn private property for the benefit of Pfizer Corporation which sought to develop a new global research facility in a peaceful residential neighborhood in Connecticut. Among the dispossessed were residents like Wilhelmina Dery who lived in a house on Walbach Street that had been in her family for over 100 years. She was born there in 1918. Her son lived next door in the house he received as a wedding gift.

The central issue was whether the City’s decision to take property for the purpose of economic development satisfied the ‘public use’ requirement of the Fifth Amendment to the United States Constitution which provides that ‘private property [shall not] be taken for public use, without just compensation’. To save their homes, petitioners argued that the Fifth Amendment does not permit a taking solely on the basis that another private party might make more productive use of their property.

The result? Good news and bad news.

The bad news is they lost. Justice Stevens, writing for the majority, equated ‘public use’ with ‘public purpose’ and allowed the condemnation. He saw this as consistent with the Court’s “broader and more natural interpretation of public use as ‘public purpose’.” But dissenting Justice Sandra Day O’Connor saw it quite differently. She wrote, “This case returns us for the first time in over 20 years to the hard question of when a purportedly ‘public purpose’ taking meets the public use requirement. It presents an issue of first impression: Are economic development takings constitutional? I would hold that they are not.”

Justice O’Connor, joined by Chief Justice Rhenquist and Justices Thomas and Scalia, summed it up accordingly:

Under the banner of economic development, 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. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings “for public use” is to wash out any distinction between private and public use of property–and thereby effectively to delete the words “for public use” from the Takings Clause of the Fifth Amendment.

The good news? Justice Stevens opened the door for state legislatures to provide citizens greater protection than federal law:

In affirming the City’s authority to take petitioners’ properties, we do not minimize the hardship that condemnations may entail, notwithstanding the payment of just compensation. We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power. Indeed, many States already impose ‘public use’ requirements that are stricter than the federal baseline. Some of these requirements have been established as a matter of state constitutional law, while others are expressed in state eminent domain statutes that carefully limit the grounds upon which takings may be exercised. As the submissions of the parties and their amici make clear, the necessity and wisdom of using eminent domain to promote economic development are certainly matters of legitimate public debate.

Before the ink had even dried, the public debate began in earnest. One man called for the condemnation of the home of Supreme Court Justice Souter who joined with the majority in Kelo. He proposed replacing the farmhouse where Souter has lived since he was 11 years old with a bed and breakfast that would generate more revenue for the town of Weare, New Hampshire. “The justification for such an eminent domain action is that our hotel will better serve the public interest as it will bring in economic development and higher tax revenue to Weare,” wrote Logan Clements in a letter to town officials.

The Castle Coalition began a ‘hands off my home’ campaign to support eminent domain reform at the state level. “Already, the ruling has emboldened governments and developers seeking to take property from home and small business owners,” says their website (www.castlecoalition.org), which includes the City of Memphis amongst locations where “tax hungry governments and land hungry developers rejoice in green light from U.S. Supreme Court.”

The Tennessee Municipal League, on the other hand, downplayed the ruling as merely a reaffirmation, rather than expansion, of government’s rights.

While eight other states already prohibit takings for economic development, Tennessee is not yet among them. In fact, although the Tennessee Constitution proscribes takings for public use without just compensation, it is subject to the same interpretation as the Fifth Amendment. More than a dozen Tennessee statutes confer the right to take private property. In addition to state, county and municipal governments, universities, hospitals, and even housing and basin authorities are given condemnation authority.

Accepting Justice Stevens’ apparent invitation for states to act, at least 13 bills have been filed in Tennessee in an effort to limit the power of eminent domain or otherwise clarify that private economic development is not ‘public use’ under our Constitution. A joint committee of the Senate and House has been appointed to consider the issues.

I am sponsoring SB 2420 to amend seven different Titles of the Tennessee Code to make it clear that private property rights of residents and businesses should be protected over the interests of private developers and corporations. Under the bill, the definition of ‘public use’ specifically excludes private ownership or lease for private economic development. It deprives government of the power of eminent domain solely for the purpose of improving tax revenue or the tax base. My legislation creates a presumption against the government’s right to take private property under such circumstances and gives the right of first refusal to repurchase property from government to those who lost it in the first place in the event the property is not ultimately used as intended when condemned.

While the debate will continue and center upon whether any of the proposed legislation is drafted with sufficient precision to split the hair which distinguishes between truly private and public use, one thing is clear. The principle of Federalism, recognized by the Founders, is alive and well. As James Madison wrote in Federalist 45, “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.”

Justice Stevens seems to agree, and his ruling gives us an opportunity:

Our earliest cases in particular embodied a strong theme of federalism, emphasizing the ‘great respect’ that we owe to state legislatures and state courts in discerning local public needs. For more than a century, our public use jurisprudence has wisely eschewed rigid formulas and intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justify the use of the takings power.

It is for us, then, to seize this opportunity and accept our responsibility as state legislators and citizens, to uphold the importance of private property in Tennessee. By rewriting our code and clarifying it to distinguish clearly between public use and private gain, we recognize that, to paraphrase Alexander Hamilton, one of the great objects of government is to protect the security of property.