Eminent Domain in a Nutshell
Eminent domain has two different manifestations. Most exercises of eminent domain involve takings initiated by government agencies or, in some cases, public utilities such as power or pipeline companies, of privately owned property. This often entails the seizure of land and buildings, as well as the creation of easements and other interests in property. According to the Takings Clause of 5th Amendment to the United States Constitution, a government entity must satisfy two conditions in order to use its eminent domain power— (1) the land must be taken for public use, and (2) the owner must receive just compensation.
Clearly, our Founding Fathers understood the need for eminent domain. Without it, how would we build roads, bridges, or hospitals? As originally intended, eminent domain was meant to provide the government the ability to take private property in order to build something for public use, such as a public school, a town hall, or a park. Over the years, however, debates have emerged questioning the interpretation of the phrase “public use”. Could public use include projects that encourage economic development, and could the government seize property and sell it to private parties such as developers? In 2005, the U.S. Supreme Court made a landmark decision in Kelo v. City of New London, which involved the efforts of a Connecticut city to undertake a local “redevelopment” project by seizing privately owned property and turning it over to private redevelopers who would then build new buildings with commercial and residential uses, where homes used to exist. After years of contention, the Court ruled that economic development could be a legitimate and legal reason to use eminent domain, provided that the laws of the state in question permitted takings via eminent domain for these purposes. While many states have since passed eminent domain reform laws to restrict the ways in which eminent domain may or may not be used, municipalities and states across the country continue to use eminent domain to redevelop “blighted” areas.
Additionally, the concept of just compensation remains an important issue. After all, if the government always offered property owners fair market value for their properties, firms like McKirdy, Riskin, Olson & DellaPelle, which represent property owners in eminent domain disputes, would likely not have been in existence for decades. Examples of some of the just compensation awards our firm has obtained for its clients are available on our “Case Studies” page.
Aside from traditional exercises of eminent domain involving government takings of property, property owners also have the right to challenge actions or regulations by government entities, either accidentally or on purpose, which result in the appropriation of their private property without the use of traditional eminent domain processes. When this occurs, an owner may pursue an “inverse condemnation” claim, which asserts that private property has been taken even though the government has not instituted a traditional eminent domain action or process. The taking is not just limited to physical property. When your land floods for long periods of time after the government works around your property, or the government passes a regulation which in essence makes your property unusable or damages its ability to provide you with its benefit, those actions may also constitute a taking. This circumstance is known as an “inverse” condemnation due to the procedural nature of the eminent domain proceeding. In an inverse condemnation claim, rather than the government filing suit to take the property, the property files suit against the government for the taking. It is then upon the property owner to provide evidence that the government has seized the property (in whole or in part), has restricted the use of their property or encumbered it in such a way as to prevent the full use of the property which was taking place, all without compensating the owner for that taking.
The U.S. Supreme Court recently provided aggrieved property owners with an option in instituting inverse condemnation claims. Knick v. Township of Scott involved a Pennsylvania township ordinance which stated that any site which contained graves, even when they were located on private property, must be accessible to the public from sun-up to sun-down. The plaintiff, Rosemary Knick owned a property that contained burial plots but did not follow the ordinance and was provided a notice that she was in violation of the ordinance. In response, Ms. Knick filed an inverse condemnation claim in federal court. Under prior Supreme Court precedent, Ms. Knick was barred from filing an inverse condemnation claim in federal court until she first litigated it in state court. This process presented a conundrum because a complaining party would only seek relief in federal court if a preliminary court challenge in state court was unsuccessful. And, when an unsuccessful state-court litigant subsequently presented an inverse condemnation claim in federal court, the government would assuredly claim that the federal court case was barred on the basis of res judicata, because it had already been presented to and decided in the state-court litigation. The U.S. Supreme Court recognized the frailty of the prior rule, and thus held for Ms. Knick and concluded that a property may file federal takings claim for inverse condemnation claim against the government in federal court without first litigating in state court. As a result, any property owner considering filing an inverse condemnation claim which alleges violations of federal constitutional law may now have the option to bring their claim in federal court as well as state court.
While eminent domain is a lawful and necessary governmental privilege, it remains clear that this awesome power is not always used appropriately. As a property owner, it is crucial for you to know your rights so as not to become a victim of eminent domain abuse. If you think that your property is going to be taken or the government has entered onto your property without proper compensation, it is imperative to seek experienced counsel to advise you of your potential legal rights and remedies.
The author acknowledges the assistance of William Olson, a law clerk at McKirdy, Riskin, Olson & DellaPelle, in preparing this article. Mr. Olson is a member of the class of 2021 at Rutgers Law School.