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Eminent domain case important to property owners in state

The United States Supreme Court recently announced it will hear the case of a group of homeowners from New London, Ct., on an issue of significance to property owners across Mississippi and throughout the country.
At issue in the case, Kelo v. City of New London, is whether the power of eminent domain gives the government authority to seize a person’s home, business, farm or other property and turn it over to other private interests for development, with the only public benefit being increased government tax revenues.

The Kelo case arises from a situation increasingly familiar to property owners.
Suzette Kelo owns a home in Fort Trumball, a working class neighborhood of New London. The area was targeted to be “revitalized” under a city development plan to use the property for a luxury hotel, upscale condominiums and private offices that would yield the city more tax revenues than could be generated from the middle class residential neighborhood.

To enhance the Pfizer pharmaceutical company’s $270-million research facility, the city empowered a private entity, the New London Development Corporation, to exercise the power of eminent domain to condemn most of the Fort Trumball neighborhood. The city contends that it has suffered serious financial reversals, including employment declines that have left it in a desperate situation. In light of such dire circumstances, the city claims, rejuvenation of New London’s dying economy is itself an adequate public use to warrant the takings.

Governments have the power of eminent domain, that is, the power to take private property for legitimate public uses. Without eminent domain it would be impossible for federal, state or local governments to build necessary public projects such as roads, airports and the like.

Both the state and federal constitutions, however, place two important restrictions on the exercise of this power. First, private property cannot be taken without payment of just compensation to the owner. Secondly, private property can be taken only for public use.

Is “economic development” in the form of increased jobs and tax revenues for governmental entities a “public use” sufficient to authorize the forced taking of private property? State courts throughout the nation are split on the issue. Some states have allowed condemnations for private business development alone. Others have indicated such takings are prohibited by the Fifth Amendment to the United States Constitution. Mississippi wrestled briefly with the issue in the Nissan development. This important question will likely be answered by the United States Supreme Court in Kelo v. City New London case.

The trend across the country in recent years has been for governments to exercise the power of eminent domain to take private property for purposes extending well beyond traditional “public uses” such as roads, airports and other public facilities. This trend began in the 1950s when major metropolitan governments began to use eminent domain to condemn slums or “blighted” areas as part of urban revitalization projects. The contention in early cases was that these blighted areas were harmful to the larger community. In order to allow cities to condemn these areas, the Supreme Court expanded the public use requirement and gave broad deference to government determinations of what constitutes a public use.

What started as slum elimination has evolved into a process by which private property is condemned, taken by the government, and turned over to another private, profit-making entity (usually a corporation) for the latter’s private economic advantage. Cash-hungry local governments need only claim a public purpose in a development and it becomes very difficult for the landowner to contest that determination.

This nation’s Founding Fathers believed that private ownership of property was an essential part of freedom. The Fifth Amendment to the United States Constitution says, “….nor shall private property be taken for public use, without just compensation.” Land ownership is particularly valued in Mississippi. Section 17 of the Mississippi Constitution provides even greater protection, mandating that private property “shall not be taken or damaged” without due compensation, and specifying that “the question of whether the contemplated use be public shall be a judicial question.”

Local landowners in Mississippi and throughout the country, with the assistance of eminent domain attorneys such as those in Owners Counsel of America, are seeking to insure that governmental takings of private property are limited to legitimate public purposes and that “just compensation” is paid when the property of private owners, whether individuals or corporations, is forcibly taken.

The United States Supreme Court has the opportunity in Kelo v. City of New London to turn the tide that has flowed against landowners in recent years and reassert rights of private ownership which have been a bedrock of this nation’s history.

The forced taking by the government of private property from one individual or family to deed it to another private entity runs afoul basic concepts of private rights and ownership in this country. Merely declaring the action “economic development” does not authorize governmental entities to trample the rights of individual property owners.

The upcoming decision by the United States Supreme Court in the Kelo case will go a long way in determining how sacred those rights will remain.

Paul R. Scott is the managing partner of the Hernando office of Smith Phillips Mitchell & Scott, Attorneys. He practices primarily in eminent domain and land use litigation and is the Mississippi representative of Owners Counsel of America. Send questions or comments about this column to mbj@msbusiness.com.

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