Kelo Exposes Deeper Problems With Eminent Domain: Hawaii Reporter, 2/17/06

By Robert H. Thomas

“You work for the American dream – you don’t steal it.” So says the protagonist to his cohorts in the 1998 film A Simple Plan, after finding a duffel bag laden with cash. Last summer’s U.S. Supreme Court decision in Kelo v. City of New London triggered a visceral reaction nationwide because it revealed that the government could steal the American dream from innocent homeowners. Not surprisingly, the public is shaken that the Court would condone the use of eminent domain to bulldoze homes to make way for a hotel, health club, and marina.

After all, the U.S. Constitution’s Fifth Amendment is supposed to prohibit takings unless the property is condemned “for public use” and the owner receives “just compensation.” In Kelo, however, the Court accepted the government’s argument that the taking was for public use because it was claimed the new owner would make “better” – more intense, and therefore more publicly beneficial – use of the property. The decision eviscerated the public use” requirement as a meaningful limitation on eminent domain, except in a few circumstances.

Eminent domain is not a new phenomena. This ancient attribute of sovereignty has its roots in the ability of English kings to seize their subjects’ lands. Traditionally, the power was invoked to take property for schools, government buildings, and military bases. Since the 1950’s, however, it has been increasingly exercised for uses which are not obviously public such as urban redevelopment, land redistribution (Hawaii’s Land Reform Act), and, as in Kelo, “economic development.”

Kelo comes as no real surprise to those who follow eminent domain law, as it is just the latest in a long line of cases upholding the government’s broad power to take private property for virtually any reason. Yet, the public has finally expressed unprecedented revulsion to the manner in which this power is often exercised. Perhaps the contrast between the positions of the parties had never been drawn as starkly: the properties of Mrs. Kelo and her neighbors are well-kept middle class houses, but they were condemned so that another private owner could put them to more economically productive use.

It appeared the government was strong-arming widows and families. Minorities, the poor, the elderly, and those without political clout often find that their properties are targeted. Although the Court eventually upheld government’s power, Kelo shone light on the harsh inequities inherent in eminent domain which had for too long passed unnoticed, and laid bare the fable that property rights are only asserted by the rich and the powerful. Public reaction cut across the political spectrum, with traditional adversaries finding an issue on which they could agree: eminent domain is being overused, and has strayed from its original purpose.

Just ask the farmers, ranchers, small business owners, charitable trusts, churches, families, and homeowners whose properties have been threatened. Next to being wrongly charged with a crime, there is nothing like forced dispossession to make innocent citizens feel violated by their government. When the overwhelming power of the state is leveled directly at property owners, the Constitution should also protect them, and it is no coincidence that the limitations on eminent domain are contained in the same Fifth Amendment which also sets forth the rights of the criminally accused.

Kelo was not the last word on the subject, as it only removed federal law from the equation. The U.S. Constitution sets minimum standards and the states remain free, the Court said, to provide property owners with more protection. Forty states, Hawaii included, responded quickly to Kelo’s invitation to reform their eminent domain laws. Article 1, section 19 of the Hawaii Constitution, and chapter 101 of the Hawaii Revised Statutes are now the first-line protection. Several proposals are now pending in the Legislature to reform eminent domain.

Limiting reform to the Kelo issue and only prohibiting “economic development” takings will not curb abuse, however, because a condemnor bent on acquisition will simply create some other reason to support the taking. Piecemeal limitations on eminent domain have never been effective at ensuring the power is used properly. For example, although several states require that property is deemed “blighted” before eminent domain may be exercised, the government strains to label perfectly good property as “blighted” in order to take it. The courts for the most part do not disturb blight findings, regardless how spurious they appear.

Broader reform is needed to provide more protection to property owners than the current system allows. Several proposals to reform eminent domain procedures are now pending in the legislature to address the greater problems which were exposed by Kelo. To be effective, the Legislature must establish broad checks on eminent domain power, while allowing takings for genuine public uses to continue.

  • First, the public use for the property should be expressly stated. Currently, condemnors need only hypothesize (in other words, make up) reasons supporting the taking if challenged in court.
  • Second, eminent domain should be used as a last – not first – resort. Under the current law, it is often cheaper and easier for a condemnor to take property by eminent domain than to attempt its purchase on the open market.
  • Third, the property should be owned or operated by the government or a PUC-licensed entity. This prevents a Kelo situation where the government’s power is used to force transfers of property primarily for private benefit.
  • Finally, if the property taken is not used for the stated public use, it should be offered for sale back to the former owner at the price at which it was taken. This prevents pretextual or “temporary” ownership by the government.

Without meaningful reform, eminent domain can turn a property owner’s American dream into the American nightmare. Government should work to support the dream, not steal it.

Hawaii Reporter: www.hawaiireporter.com

Robert H. Thomas is the Managing Attorney for Pacific Legal Foundation's Hawaii Center: rht@hawaiilawyer.com