The Best Class

1. ; nor shall private property be taken for public use without just compensation.” The Best Class “The Last Class”

2. The Process of Eminent Domain Public Necessity and Just Compensation

3. Eminent Domain – Legal Theory • Eminent Domain is an ancient power • It is the pre-eminent power of government • Assuming that all land and land rights devolve from the King – the sovereign’s power extends to the re-possession of any land upon showing of a pubic necessity • Under our 5th Amendment – “nor shall property be taken by the government except for a public purpose and upon payment of just compensation”

4. Blackstone On Property and Takings • So great moreover is the regard of the law for private property, that it will not authorize the least violation of it; no, not even for the general good of the whole community. If a new road, for instance, were to be made through the grounds of a private person, it might perhaps be extensively beneficial to the public; but the law permits no man, or set of men, to do this without consent of the owner of the land. In vain may it be urged, that the good of the individual ought to yield to that of the community; for it would be dangerous to allow any private man, or even any public tribunal, to be the judge of this common good, and to decide whether it be expedient or no.

5. Blackstone II • Besides, the public good is in nothing more essentially interested, than in the protection of every individual's private rights, as modeled by the municipal law • In this, and similar cases the legislature alone can, and indeed frequently does, interpose, and compel the individual to acquiesce • But how does it interpose and compel? Not by absolutely stripping the subject of his property in an arbitrary manner; but by giving him a full indemnification and equivalent for the injury thereby sustained. The public is now considered as an individual, treating with an individual for an exchange.

6. Blackstone • All that the legislature does is to oblige the owner to alienate his possessions for a reasonable price; and even this is an exertion of power, which the legislature indulges with caution, and which nothing but the legislature can perform.

7. What Is Condemnation? • The government may “take” in three ways: • Eminent Domain • Regulatory or Categorical Taking of All or Practically All Value Related to Use • Inverse Condemnation – When the government, by its actions, makes the use of private property untenable • Airport Cases • Military Bases • Damage resulting from flooding or dam projects • A project which undermines nearby structural foundations

8. What is Just Compensation • Just compensation is based on value • Value can have many faces but “fair market value” is the standard used in Eminent Domain • This is classically define as “what a willing seller with take and a willing buyer offer” • Justice Butler defined just compensation as: • “The owner is entitled to the full money equivalent of the property taken, and thereby to be put in as good a position pecuniarily as he would have occupied, if the property had not been taken”

9. Value – The Principles • Courts talk in terms of present market value and not future or speculative value unless the probability of such future value affects present value • If the special adaptability of the land for the projected use creates a special demand by ordinary purchasers, this may be included in present value • The market value is not all of the just compensation picture. • It is only a payment for strict money value on a well define parcel

10. Damages And Value • Consequential Damages • Term used to describe the personal injuries such as the expense of moving, inconvenience, interruption of business, loss of good will and under rare circumstances, pain and suffering • The major principle is that the owner should only be compensated for those things of value that cannot be taken with him • Severance Damage • The damage resulting from diminution in market value of the owner’s remainder – the relationship of the part to the whole

11. Public Purpose • Public purpose is shown when the holder of a certificate of necessity demonstrates a compelling need (under their corporate purpose) to acquire real property to increase the benefit to the public in general • Thus, there is a general benefit in: • Building roads • Supplying electrical power • Removing and redeveloping blighted areas • Creating flood control

12. Case Examples Public Roads Sidewalks Parking Lots

13. Riley v District of Columbia Redevelopment Corporation, 1956 • The District of Columbia instituted eminent domain against 45 parcels of land for the purpose of clearance for a public building • Mrs. Riley was given 3 appraisals: • $6,500 • $7,000 • $6,200 • The jury returned an award of $7,000

14. This is A Case About Mrs. Riley She is not the sharpest tack on the bulletin board

15. Background • Mrs. Riley bought the house in 1951 for a total of $9,950 • She added $877 worth of improvements • When it was seized in 1954 she owned a total of $8,902 for the mortgage • Thus the award was $3,800 less than the purchase price and about $1,900 less than her total investment • Mrs. Riley was ticked off and appealed the award

16. Appeals Court • The Court begins by saying that just compensation means the full and perfect equivalent in money of the property taken • The Court then examines two key questions: • The nature of the property in 1951 • The nature of the purchase in 1951 • The Court found the house to be solidly built and in good condition for its 50 years of age • Mrs. Riley purchased the home for her daughter and her elderly Mother – it was conveniently located within walking distance of the Civil Service where Mrs. Riley worked • It was all she could afford

17. Can You See What’s Coming?

18. Real Estate and Appraisers • A real estate agent testified for Mrs. Riley. He had sold a large amount of homes in the area for $10,000 • A neighbor purchased a home adjacent to Mrs. Riley in 1952 for $10,800 • The appraisers said the house was approximately 40 percent depreciated and could be built today for $9,355. It had no income producing properties • The appraisers felt that the purchase price bore no relation to the fair value. She paid too much for it – almost stupidly excessive

19. And The Court It is the ordinary rule that the burden of proof in a commendation case rests with the owner But this is not ordinary Mrs. Riley seeks nothing – the government here is taking her private property – her home To take it is the highest form of power and requires the highest form of justice – unequivocal just compensation

20. God Strikes Down For Mrs. O’Reily

21. The Lone Ranger Rides Again

22. Inverse Condemnation and The Rule of Remnants

23. Martin v Port of Seattle, 1964 • In this case 196 property owners seek damages arising from inverse condemnation against the Seattle-Tacoma Airport • The damage is from low altitude flights of jetliners over their property • The essential legal question is whether the property owners actually have a claim for damage from the noise of aircraft

24. Background • The property in question forms a rectangular area about one mile long and ½ mile wide directly south of the primary runway • Jetliners in the process of landing pass over this area at approximately 500 feet in altitude • Basic problems • Vibration is sufficient to throw dishes from shelves • Conversation is interrupted from noise • Sleep is disrupted, and the noise painful to many • Many cannot sell their homes

25. Primary Runway

26. The Airport Responds • Congress has placed all navigable airspace within the public domain • The damage is incidental and does not constitute a physical invasion • At most, it damages but does not take the property • If a property owner can prove a diminution of value we should pay for that increment only – not be required to take the entire property

27. The Trial Court • The trail court found that the interference amounted to a physical invasion of the air easement and constituted an inverse commendation • When the noise and vibration deprives the land owner of an essential element of their land the result should be the same as if the airport operator brings the condemnation of the property

28. Appeals Court • This is no different that it would be if the land in question would have been condemned by the State when the airport land was acquired • If the damage is slight – then an owner should be entitled to payment for the increment of diminishment of enjoyment – even a slight burden must be paid • If the damage is substantial, then the owner should be entitled to full and perfect recovery of property under formal condemnation

29. Remnants

30. City of Crookstown v Erickson Minn. 1955 • The City condemned land for a sewerage treatment plant, discharge system, and administration building from a Mr. Erickson • They did not take all the land Erickson owned and left a remnant of 1.3 acre plus the house • Erickson appealed the judgment and claimed that the contemplated use would damage his remainder

31. The Erickson Tract Taking Sewer Plant Office Erickson House Erickson Tract Remainder Area of Taking Formerly Erickson Tract Waste Water Treatment Plant

32. Appeals Court • The Court sets out important rules in this case • When no part of an owner’s land is taken, and the use of adjoining land causes damage, the damage is not compensable unless it is peculiar to the adjoining land and not the type suffered by the public in general • Where there is a partial taking, the injured owner is required to show damage peculiar to the remaining property and this becomes part of the compensation • When the use of the land taken constitutes and integral and inseparable part of the single use, the government will be required to take the entire whole

33. Why Not Future Value? • In Board of Education v Baczewski (1992) a Michigan School District condemned 110 acres of land for a future school • The Board admits that it may continue to use the present High School for another 30 years • It admits that it took the land to save money because of increased prices in the future • Should the Board have paid on future value rather than current fair market value?

34. Court Rule • School Board officials would not have been performing their duties had they waited for the present school to deteriorate before they purchased land • Fair market value is all that is required

35. Eminent Domain: An Analysis of Kelo v. New London “For violent fires soon burn out themselves.” Source: W Shakespeare; The Tragedy of King Richard the Second (Gaunt at II, i)

36. Outline • Background • Analysis • Implications • Conclusion

37. Eminent Domain • Defined by Webster's as the right of the government to take property from a private owner for public use by virtue of the superior dominion of its sovereignty over all lands within its jurisdiction

38. Background • New London is in a long economic recession • Kelo purchased a house in the Fort Trumbull neighborhood • Pfizer builds a multimillion dollar research facility adjacent to the neighborhood • New London Development Corporation, a private, non-profit organization, is reactivated • The City of New London calls for complete redevelopment of the entire deactivated Fort Trumbell Area – housing; parks; businesses

39. The Actions • After the development plan was approved by the city, the NLDC began negotiations with the landowners of the area for the purchase of their property • The development area consists of 115 parcels in addition to the 32 acres of land formerly occupied by the U.S. Naval base.

40. Background • NLDC plans a mixed use development with a high end hotel, condos, and retail development • Area contains approximately • Of the115 privately owned parcels, 15 parcels are owned by the seven petitioners who are unwilling to sell • City of New London initiates condemnation at the request of the NLDC

41. Suzette Kelo et al Take Exception "There is no amount of money that could replace our homes and our memories. This is where we chose to settle, and this is where we want to stay. This is America, the home of the free, isn't it?”

43. Brief of the Petitioners • Want a bright line rule prohibiting eminent domain for economic development • Condemnation was unconstitutional • Economic development is not a valid public use under the Fifth Amendment • Affirming the condemnations will promote more cities to condemn property

44. Brief of the Petitioners • Argues that the use of eminent domain amounts subsidizing private projects • Relies on their interpretation of Berman and Midkiff in their arguments • Want a “reasonable certainty” of success for any property condemned

45. Brief of the Respondents • Court should adhere to its deference to legislatures and hold that economic development constitutes a public use • Exercise of eminent domain authority by the respondents in this case satisfies the public use requirement • Courts opinion in Berman and Midkiff validate the condemnation

46. Brief of the Respondents • Economic development constitutes a public use because it is rationally related to a conceivable public purpose • Respondents feel that there is no need for greater oversight on the part of the judiciary

47. Opinion of the Court • Court ruled for the respondent by a 5-4 margin • The court upheld the ruling that the proposed development was a public use within the takings clause. • NLDC had a carefully formulated development plan • Area was judged to be sufficiently distressed to justify economic rejuvenation • Economic development is a governmental function that cannot be separated from other functions

48. Opinion of the Court • Supreme Court ruled that economic development constitutes a public use • Consequently, eminent domain can be used to assemble parcels and eliminate holdouts • Court reminded the parties that individual states can enact legislation either prohibiting or allowing eminent domain for economic development

49. Implications • The use of eminent domain as a major tool for public/private alliances in local economic development • State and Federal legislation prohibiting eminent domain for economic development • Pending legislation that will limit or prohibit the powers of condemnation.

50. Comment/Observations • Berman v Parker, 1954 • n 1945, the United States Congress passed the District of Columbia Redevelopment Act of 1945 to address the vast blighted area found in the District of Columbia • The Act created a commission of five members called the District of Columbia Redevelopment Land Agency and granted it the power to redevelop blighted areas and eliminate any "blighting factors or causes of blight." The act granted the Agency the power of eminent domain if necessary