Opinion: Daily Journal

Another Way to Fight Eminent Domain Abuse

The N.C. House of Representatives has approved a proposal to amend the state constitution by adding the following language:

Private property shall not be taken by eminent domain except for a public use. Just compensation shall be paid and shall be determined by a jury at the request of either party.

As I’ve pointed out in a previous “Legal Update,” this proposed amendment is much too weak to protect North Carolina property owners effectively from eminent domain abuse.

It is weak when compared to the model amendments that have been developed by property rights advocates, including the John Locke Foundation; it is weak when compared to the actual amendments that have been adopted in other states, including South Carolina and Virginia; and it adds very little to the Fifth Amendment’s Takings Clause (“nor shall private property be taken for public use without just compensation”), which we already know — thanks to the Supreme Court’s 2005 decision in Kelo v. City of New London — can be interpreted in ways that make it ineffectual.

Prior to the vote, Rep. Larry Pittman, R-Cabarrus, proposed adding the phrase, “Public use does not include the taking of property for the purpose of thereafter conveying an interest in the property to a third party for economic development,” which would have significantly strengthened the amendment. Unfortunately, the House rejected his suggestion and passed the bill in its original form.

As a result, responsibility for turning the amendment into something that will effectively protect the property owners of North Carolina now rests with the N.C. Senate. It seems unlikely that senators will be willing to add the kind of restrictive language that has just been rejected in the House. However, as I will explain below, there is another approach to strengthening the amendment that the Senate might find more acceptable.

The most egregious instances of eminent domain abuse occur when property is taken from one private owner — typically an impecunious and politically weak homeowner — and given to a different private owner — typically a wealthy and politically well-connected property developer.

When the Supreme Court held, in Kelo, that the U.S. Constitution does not protect the poor and the weak from this kind of abusive “private transferee” taking, many states responded by adding such protection to their state constitutions. With admirable persistence, several members of the state House have been trying for years to do the same thing in North Carolina. It would be a shame if their diligence failed to produce a really effective amendment.

Given that private transferee takings are such a big part of the problem, it is tempting to think that the best way to strengthen the proposed amendment would be to add a suitably narrow definition of “public use,” and because the most characteristic use of eminent domain has always been to obtain land for things like roads and government buildings, it is tempting to think that a good definition of “public use” might be “use by a public agency.”

But that will not work. Since the earliest days of the Republic, indeed, since colonial times, eminent domain has also been used to obtain land for use by private agencies: for millponds used by privately owned gristmills in the 18th century, for rights-of-way used by privately owned railroads in the 19th century, and for easements used by privately owned utilities in the 20th.

Few, if any, reformers want to prohibit these kinds of private uses. However, coming up with a coherent, abstract definition of “public use” that permits acceptable private uses while forbidding unacceptable ones has proven difficult. That is why so many model amendments — and actual amendments — resort to the expedient of simply forbidding certain specific kinds of private transferee takings, including, especially, takings for the sake of economic development.

While this ad hoc, specific-prohibition approach would certainly work, the reception of Rep. Pittman’s proposal, and the legislative history of this and past eminent domain bills, suggest that it is not an approach the General Assembly is willing to take.

Fortunately, there is another option. The proposed amendment could include the stipulation that the question of whether a taking complies with the public use requirement is one that must be decided in a court of law and not something that can be determined by a legislative body or administrative agency.

To understand why this stipulation might be effective we must return again to Kelo. Part of what made that decision so unpopular was the Supreme Court’s declaration that legislatures should be granted “broad latitude in determining what public needs justify the use of the takings power.” For over 70 years, the Supreme Court has taken this “deferential” approach to most types of legislation, but, significantly, it has generally applied a higher level of scrutiny with regard to the specifically named rights that are singled out for special protection in the Bill of Rights.

The right to own property is clearly one of those specifically named rights, and the Public Use Clause is clearly one of those special protections. Indeed, it can be argued that those who wrote and ratified the Constitution regarded the right to own property as the most fundamental right of all.

It is therefore difficult to understand why the Court should have decided to afford it less protection than other specifically named rights like the right to free speech or the right to due process.

Regardless of why the Supreme Court did what it did, however, there is no reason why the courts of North Carolina should follow its example. Requiring the courts to make public use determinations on a case-by-case basis would ensure that they do not, and it also would do a lot to protect North Carolina property owners from eminent domain abuse.

The public outcry that followed Kelo will be remembered in legal circles for many years to come. Any judge in North Carolina who wants to be re-elected will think long and hard before authorizing transfers from private homeowners to private developers simply because the latter claim to be able to generate more tax revenue or faster economic growth.

Jon Guze is Director of Legal Studies for the John Locke Foundation.