Supreme Court Expands the Power of Eminent Domain

Supreme Court Expands the Power of Eminent Domain

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First Published: July 5, 2005

In its 5-4 decision in the case of Kelo v. City of New London, the U.S. Supreme Court issued an important, if very controversial, interpretation of the government's power of "eminent domain," or the power of the government to take land from property owners.

The power of eminent domain is granted to governmental bodies -- federal, state and local -- by the Fifth Amendment to the U.S. Constitution, under the simple phrase, "… nor shall private property be taken for public use, without just compensation." In simple terms, the government can take privately owned land, as long as the land will be used by the public and the owner is paid a fair price for the land, what the amendment calls, "just compensation."

Before Kelo v. City of New London, cities typically exercised their power of eminent domain to acquire property for facilities clearly intended for use by the public, like schools, freeways or bridges. While such eminent domain actions are often viewed as distasteful, they are generally accepted because of their overall benefit to the public.

The case of Kelo v. City of New London, however, involved a new trend among cities to use eminent domain to acquire land for the redevelopment or revitalization of depressed areas. Basically, the use of eminent domain for economic, rather than public purposes.

The city of New London, Connecticut developed a redevelopment plan city fathers hoped would create jobs and revive downtown areas by generating increased tax revenues. Property owner Kelo, even after an offer of just compensation, challenged the action, claiming that the city's plan for her land did not constitute "public use" under the Fifth Amendment.

In its decision in favor of New London, the Supreme Court further established its tendency to interpret "public use" as the much broader term, "public purpose." The Court further held that the use of eminent domain to promote economic development is constitutionally acceptable under the Fifth Amendment.

Even after the Supreme Court's decision in Kelo, the vast majority of eminent domain actions will, as they historically have, involve land to be used for purely public uses.

Typical Eminent Domain Process

While the exact details of acquiring property by eminent domain vary from jurisdiction-to-jurisdiction, the process generally works like this:

  • The property owner is notified by mail and will soon be visited by a government employee, often a "right-of-way" agent, who will further explain why the owner's property is needed.
  • The government will appoint an independent appraiser to evaluate the land and come up with fair price to pay the land owner for his or her land -- the "just compensation."
  • The property owner and the government may negotiate to come up with a final price to be paid the property owner. In some cases, a judge or a court-appointed arbitrator will be called in to oversee the negotiation.
  • The owner is paid the agreed price and ownership of the property is transferred to the government.