March 22, 2006
Previously published on March 2006
In the Summer of 2005, the United States Supreme Court held in Kelo v. City of New London that local governments can take private property through eminent domain for the purpose of economic development and transfer ownership to other private entities that would put the land to a different use even when such private property is not blighted or economically impaired. The Kelo property was taken by the City of New London, Conn. in an effort to revitalize the distressed downtown area pursuant to Connecticut laws allowing the use of eminent domain for the purpose of economic development or redevelopment.
The result in Kelo has been widely criticized. That criticism usually echoes the words of Justice Sandra Day O'Connor in her dissenting opinion:
The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory . . .
The reaction to the Kelo decision has been swift. State legislatures around the country have proposed new laws which prohibit the use of eminent domain to take private property for economic development, to increase tax revenue or for the purpose of giving it or leasing it to other private individuals. Some states have already passed these measures into law and many more are considering a host of proposals which go beyond destroying the holding in Kelo and towards protecting and providing new rights to private property owners.
Reaction has not been confined to the legislatures. One of the nation's 10 largest banking institutions, BB&T Corp., recently announced that in order to show support for private property rights, it would not loan money to private real estate developers building on property taken by eminent domain. Recently, senators on both sides of the aisle questioned Supreme Court nominee Samuel Alito as to his thoughts about the Kelo decision, urging him to overturn the case.
At least three dozen bills have been filed in Tennessee recently on the topic of eminent domain. Most seek to undo Kelo by prohibiting the use of eminent domain when it is being used primarily or solely for economic development, to increase the tax base or when eminent domain takes property from one private individual and gives it or leases it to another. Some bills may affect the continued use of eminent domain for projects such as sports facilities. Other proposals may jeopardize the use of eminent domain to alleviate blighted areas according to their present wording. Other bills seek to establish a sort of Bill of Rights for property owners which protect or enhance the rights of landowners on a more basic level by seeking to require condemnors to negotiate in good faith with property owners before property is condemned, requiring mediators to facilitate fair negotiations and establishing a special joint committee to study the exercise of eminent domain in Tennessee. Some of these proposals, if passed, may effectively shut down or seriously curtail certain uses of eminent domain in Tennessee. A Senate Judiciary Eminent Domain Subcommittee has been formed in Tennessee to address the large number of anticipated eminent domain bills in the legislature this session. Amendment to Tennessee's Constitution has been proposed.
The full measure of Tennessee's response to the Kelo case remains to be seen. It is clear that Tennessee's legislature intends to react and that the response will look toward strengthening the rights of landowners and curtailing the present use of eminent domain.
The Tennessee Bar Association has urged the legislature to proceed with great caution. As lawmakers move to solve perceived problems, there is a risk that new laws will have unintended consequences. Senate Bill 1964, for example, would prohibit a condemning authority from sending surveyors to determine the best route for a roadway or utility service unless written permission is obtained from all landowners. Such a bill could effectively destroy the proper use of eminent domain for beneficial projects. Senate Bills 3237 and 3238 would require a condemning authority to pay three times the appraised value of a property to be condemned for public use and Senate Bill 2122 seeks to require natural gas pipeline companies to pay an annual fee to all landowners whose property is affected by the project.
These proposed laws represent radical departures from present law and could cripple or destroy the proper use of eminent domain. The protection of the property rights of individual and corporate landowners in Tennessee is vital to this state just as the thoughtful and proper use of eminent domain is essential to progress in an ever-changing society. The balance between the two is now at stake as lawmakers in Tennessee and across the country take action in the wake of Kelo.
|