Eminent Domain for Private Gain

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Dana Berliner
Institute for Justice, Washington, D.C.

Excerpts from the Keynote Address at the Seventh Annual New York Conference on Private Property Rights (PRFA, October 18, 2003)
Property rights are fundamental to the American system and they are really the foundation of all freedom. Yet people tend to treat them in a way that reflects their thinking that property rights are sort of dry and not as important as what are perceived as personal rights, like the right to be free of discrimination or the right to speak freely. But property rights are civil rights just as much as those things are civil rights. There is nothing that touches people more personally than their home and their business, and that’s what property rights are all about. They tend to get talked about in this very large corporate way, but I think what all of you know is they are really personal. It’s a question for some people whether they can build or whether they cannot build, whether they can keep people off of their land, whether they can continue to live in their home, and these are very personal rights and that is something I think that needs to be recognized.
Today I am going to talk, not surprisingly, about eminent domain, which is one of my major areas of litigation at the Institute for Justice.
Eminent domain is the power of government to take land. It is something that has existed at least since Roman times, and it is considered a pre-constitutional power, but the U.S. Constitution and the constitutions of every state placed two limits on the use of the power.
Those two limits are that property can only be taken for public use and property can only be taken with just compensation. Those are the two constitutional limits…
Eminent domain has always been called the “despotic power” because it is the power of the despot. It is the power to throw you out on your ear. For that reason it was intended to be very much limited. Now, over time the constitutional protection of public use has eroded, just like a lot of other constitutional protections have eroded as government has grown and gained more
and more power over our lives.
We have been getting calls about the issue of eminent domain since 1996, and I honestly think we are up to about 200 a year on the issue of eminent domain….
Let’s consider New York.  Unfortunately for all of you, New York is the worst state in the entire country for abusing the power of eminent domain. And it is the worst in a number of different ways.
It has some of the most condemnations for private parties. It came out to about 146 threatened or were actually condemned.
The courts in New York are utterly deferential about eminent domain. They will sanction anything, and I think you have been hearing today in the legal session about other situations where the New York courts just do not care when people’s rights are blatantly violated.  Now, I do think that the changes that are happening judicially will come to New York, but they are not coming soon unless something radical changes.
New York has some of the most spectacular failures of eminent domain projects.  Two that I know about are in New York City. The New York Stock Exchange wanted to build and the court said, hey, no problem. Take those people’s businesses. Take those apartment buildings. We don’t care. Good idea. The New York Stock Exchange is important. We can’t let them move to New Jersey. Well, the New York Stock Exchange didn’t move. So all of the people in the apartment buildings left, the businesses closed, and then there was no building. So then they had to start facing this. It was just a mess, with huge payments by New York, by the Empire State Development Corporation and the city, to try to make it up to the owners and compensate them. It is a disaster.
There was another one on Friday, as you, I am sure, have heard about. The Empire State Development Corporation, again, was condemning a whole bunch of businesses for a new New York Times headquarters, and those people who owned the businesses fought. They lost. The Court of Appeals, New York’s highest court, refused to hear it. The U.S. Supreme Court refused to hear it. So they closed up shop, the businesses ended, and on Friday they announced they don’t have funding for the project.
So they are not going to build it until they find some funding, which could be never or it could be another ten years. So that, too, is another example.
There is nothing there, and that was five years ago. So New York has a spectacularly  high failure rate on its condemnations for private parties.
It has also got the worst eminent domain process in the country in terms of telling the people what is going on. New York’s process is completely Byzantine-like.
You would think, if you get sued, then you can defend yourself. Not in New York. If you get condemned, it is too late to defend yourself. You had to do it anywhere from a month to ten years earlier, because there is a 30-day window where you can challenge the public use of condemning your property and they don’t tell you when it is.
They don’t send you a notice about it. The only thing that you can do to find out, at this point, is if you hear about the public hearing, go and afterwards check the legal notices section every day for the next three months and you will find out when your 30-day window is, although it won’t say 30-day window. It will tell you there has been a determination and findings and that is when your 30-day window starts.
It is the craziest system I have ever seen and I have seen some really bad ones. This is something, actually, that we have a constitutional challenge to and the case had been itself mired in a lot of procedural difficulties for about the last two years.
Two weeks ago, the Second Circuit revived it; so now I think I am finally going to get a decision on whether that system is constitutional, and it clearly isn’t. So hopefully, you will get something changed about that.
There had been a proposal this year in the New York legislature to change it and at least tell people about the 30-day window. It passed unanimously in the Assembly and the Senate, and Pataki vetoed it.
He said it was too expensive to let people know about their rights by having to mail them, and find out who they were to mail them. Perhaps that will change another year.
Is there any hope on the horizon for New York? On the distant horizon in terms of the courts.I don’t think that you can count on them at this point, certainly not on the state courts. But the judicial tide is turning in other parts of the country. There is starting to be a lot more decisions striking down condemnation where the beneficiary is a private party.
The main thing that is really changing around the country is the degree of activism against eminent domain abuse. The thing that you are hearing so much about today is the importance of activism. That is so true.
Because we were hearing about so many cases, we actually formed a group just for the purpose of providing information and support to activists against eminent domain abuse. It is called the Castle Coalition. It is at castlecoalition.org as in “Your home is your castle.” There is practical information on the web site about how to go about fighting as well as questions to ask your lawyer, things to find out from your government.  How to do FOIA’s.  It is meant to be a how-to for people who are fighting against eminent domain abuse.
The message throughout is that the second that you hear that something might be going on, you have got to get in gear, because the main way these days that these projects are getting defeated is through activism. Frankly, that is something that surprised me. Being a lawyer, I hadn’t really thought about that possibility. It was after we saw three different communities successfully fight off projects that had been done deals, completely locked up, and yet they were killed, that we began to realize that activism was something that truly could change the world on this.
There was a situation in Baltimore County where there was a deal for a private development and they were getting rid of businesses, they were getting rid of homes, and the legislature, I think except for two people, voted for it and the Baltimore Sun was in favor of it. Everybody who was anybody was in favor of that, and they got it on the ballot and it was overwhelmingly defeated.
Basically, everybody in power loves eminent domain. It doesn’t matter if they are Republican or Democrat. Once they are in power they like it, they want to be able to use it to give benefits to their friends. And everybody who is not in power does not like it!
Any ordinary person with just a home or a business, and not connected enough to really be somebody, can’t stand the use of eminent domain for private parties. So when you are able to tap into that, you can get a lot of public opposition.
Most people don’t know about it. Most people think government will only take property for a road, a bridge, public school, but they won’t do it for a shopping mall. They won’t do it for a private office building.
And that is just not true. They will. They will try, and the only way often and certainly in New York, is to stop it by fighting in the public sphere.
One of the examples that I was particularly impressed with was actually in New Rochelle. There was a community that was getting condemned for an Ikea, and the community was not particularly wealthy. It was actually sort of an odd mix of small industrial uses and homes, and, nonetheless, everybody knew each other, everybody was friends. They would help each other, borrow each other’s stuff, just very close knit, and there were people who had lived there for 50 years and businesses that had been there for 50 years. It was a perfect location right on the highway. Ikea thought it would be great. The city thought they would like the tax dollars from Ikea a lot more than they would like the tax dollars from these working class homeowners, and they cut a deal. Ikea bought up from people who were willing to sell, bought up more than half of the property, and it seemed like it was unstoppable.
But these people organized like you would not believe. They did it really noisily and creatively, and that is part of the trick. You have got to be really loud about your objections, not in volume but in terms of visibility. I realize that is a mixed metaphor, loud in terms of visibility, but flashy in terms of visibility. They enlisted unlikely supporters. They got the neighboring towns to help them out.
They found some random professors at different universities to help, and they did really colorful demonstrations. They organized a demonstration where everyone they knew would drive around the town showing what the increase in traffic was going to be. They picketed the Swedish consulate.
They did all of these just really creative and newsworthy kinds of demonstrations against it, and-Ikea gave up. They just couldn’t take it anymore… So they were incredibly effective, and that is what you need to do.
In the longer term, I think there is some potential for changing this politically. The New York legislature is probably not going to be the place to start. Pataki was going to veto a bill that just told you about your rights. He is certainly not going to approve a bill that actually gives you some rights.
But there is political potential at the local level. Some cities have actually forgone the power of eminent domain or taken the power of eminent domain away from redevelopment agencies, and that is something that you can work on in your own town if you are not in the middle of one of these acute battles.
But especially if you win one, right when it is over is the perfect time to get rid of the power, because then everyone is exhausted and they have just been through this sort of big dramatic thing. So that can be a good time to do it.
You really just need to also educate people about it, because, as I said, most people don’t know this can happen, and most people really are disturbed when they find out it can happen. The forces in favor of eminent domain are very strong on the part of the government. It is financial, both in that they like to give favors to their friends, and they think it will give them more tax dollars.
For private businesses, those with no scruples in particular, it is the ultimate weapon. If you are trying to do real estate deals and you can just make the other person comply completely with everything you want, then it is a desirable tool. So there are strong forces in favor of it and that’s why it keeps happening. However, there are starting to be forces against it, in some places in the courts, and really everywhere just among ordinary people with a home, a business, who oppose it.
Certainly I believe taking property rights is unconstitutional and it is wrong. It’s got to stop. Some day the courts are going to agree with me, even the New York courts, that it is unconstitutional, but until that time it is your job to make everybody around you recognize that this is going on. Write about it. Tell people about it. When you find out about it, really make a fuss, – and really inform and educate people about just how wrong it is and stop it whenever you can, and together I think we can change this. I think we can change the world.
c 2003 Property Rights Foundation of America, Inc.
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