The Patriot Insider -- Eminent Domain

For a hobby columnist turned hobby radio host for a day -- I hosted the “Patriot Insider” on AM 1280 Saturday -- it’s more than a little unnerving to listen to tapes of oneself. (Files here.) Like reading one’s column in the Pioneer Press, listening one finds all the places one could have done better. It’s at those times I imagine myself a liberal and grade myself on motivation.

How’s that for a segue? The motivation behind yesterday’s show was living up to the Patriot’s slogan of “intelligent talk radio.” The two-part show dealt with eminent domain and smoking bans, but from the common theme of the need to curb even legitimate power of government.

Government does have the legitimate authority to use eminent domain to obtain private property for a public use and government does have the authority (and responsibility) to protect public health and safety. The question yesterday’s program attempted to address was what are the criteria necessary, if any, that ought to ensure that such authority is not abused.

In the first hour, guests were Tom Grundhoefer, general counsel for the League of Minnesota Cities, which represent municipalities that have eminent domain in their authority tool bag, and Rep. Jeff Johnson (R-Plymouth and candidate for attorney general). Who along with DFLer Tom Bakk has introduced legislation that would set some limits on when and how eminent domain might be implemented.

The eminent domain debate arises from this past summer’s Supreme Court decision in Kelo versus the City of New London where the Court ruled that New London did not violate Connecticut law by using eminent domain for purposes of “economic development.” In other words, “economic development,” even if it meant the trasfer of property from one private party to another, was not an unconstitutional interpretation of the “public use” language of the 5th Amendment.

However, and to me this is the most relevant passage in the Court’s decision, justice Stevens writing for the majority stated “that nothing in our opinion precludes any state from placing further restrictions on its [eminent domain’s] exercise of the takings power. States may limit eminent domain through state constitutional law or state statutes.”

That statement was a wake-up call for state legislatures, and the genesis of eminent domain legislation in a number of states, including Minnesota.

But are there negatives being generated by the sudden spotlight shining on eminent domain?

Grundhoefer says the answer is “yes.” He points out that in effect, Kelo precipitated no new law. The debate he said, wrongfully criticizes the tool rather than examining the important public policy that results from its use -- building of roads, bridges, schools and other public assets. Nobody wants to use eminent domain, he noted, but sometimes for the public good it is necessary, but almost always as a lat resort and with just compensation, which is often better than market value and includes relocation expenses and tax benefits.

Grundhoefer cited a survey conducted by the League that eminent domain was rarely used by cities.

Both Johns and I countered that last claim. Johnson noted that the statistic that eminent domain was only used in five percent of all takings was ’accurate, but misleading. The threat is always there, which influences negotiation.

Johnson highlighted four key points in his legislation --

1) and attorney’s piece that provides payment of attorney’s fees for a property owner that successfully fights and eminent domain taking. “Success” is defined as prohibiting the taking or receiving in excess of 20 percent more than the municipality’s last offer.

2) An evaluation piece that when a business is taken, “just compensation” must include the value of the “going concern,” not just the value of property and assets.

3) Burden of proof would shift to the municipality to provide convincing evidence that the taking was for a public use.

4) The heart of the bill from Johnson’s perspective, is the limiting of “public use” to traditional interpretation of roads, schools, parks -- takings where the result is something actually used by the public. Exceptions are when property is blighted, opolluted, or creates a nuisance.

Grundhoefer responded that (1) attorney’s fees have been implemented in several states and simply makes the eminent domain process more expensive by removing incentives to reach an agreement and precipitating litigation.

2) “Going concern” compensation is already in law, but Johnson’s bill shifts the burden of proof by making the assumption that the business’s valuation is correct and it is up to the city to prove otherwise. Government doesn’t have the resources to make that dispute.

3) Shifting the burden of proof, says Grundhoefer, takes puts eminent domain in the hands of courts, and takes power from legislators.

4) He agrees with Johnson that there ought to be a stricter definition of “blight,” but the Johnson/Bakk legislation goes too far.

Johnson’s counter is that it should be difficult for a city to take a persons property, which is why a large coalition of organizations supports his legislation. He noted that just compensation doesn’t matter if a person does not want to sell their property. He noted he is not a big spender, but believes cities should be faced with the possibility of greater expenses when considering eminent domain.

I noted that the expense issue might force cities to look at other alternatives, and Johnson agreed. He also noted that making it easier to contest a taking would avoid “lowballing” by municipalities and the state. As it exists now, the system encourages that.

Johnson also defends the idea that more court cases is not necessarily bad. Property rights, as a fundamental right, should be protected by the courts and not left only to legislatures. That is not done with other fundamental rights.

On the topic of “public use” versus “public purpose,” Johnson believes it is necessary to return to a “public use” perspective. Grundhoefer noted that one doesn’t find grants of power in the Constitution, but limitation of power -- for example, property cannot be taken without just compensation. He further noted that Public use/public purpose has been debated in Minnesota and it is accepted that it is a legitimate public purpose to promote economic development, affordable housing, and the like. The bonding bill includes a lot of money for “economic development.”

Johnson agreed that economic development is an important government function, but that it can be accomplished without using eminent domain. He acknowledged his bill makes economic development difficult in some cases and possibly impossible in others.

Grundhoefer argues that local officials close to the individual situations should have the final say on use of eminent domain. There is final recourse in the courts and elected officials can be voted out of office.

Johnson noted that courts are still a last resort in the Johnson/Bakk legislation, but it is eaiser to get to court for individuals without deep pockets and the government has the burden of proof. Voting is little consolation to someone put out of this.her home -- as Patrick Campion (co-host) noted with just compensation.

Here I noted that perhaps clarification was in order -- a little federalism 101. Eminent domain is a constitutional authority, but it is not a mandatory requirement. As noted in Kelo, states can limit its use. At the state level, the legislature defines the limits of eminent domain use by the state and by all municipalities chartered by the state. Municipalities determine when and how to use eminent domain. Courts do review the viability or necessity of municipality decisions; courts only rule on whether or not a municipality’s use of eminent domain is in accordance with the legislature’s writing of the law.

Grundhofer is concerned that the proposed legislation could leave a city with a good plan backed by 99 percent of the people blocked by a single property owner.

The Johnson legislation makes allowances such as if an area is more than 60 percent “blighted” even non-blighted properties within that area can be taken using eminent domain. But when an area is not blighted, if a person doesn’t want to sell, they should not have to when the purpose of the project is economic development.

Grundhoefer asks the question what about the property rights of others. What about the property rights of people living next to blighted or polluted areas. He fears that Johnson’s bill is so narrowly defined that it undermines the ability of cities to deal with these situations.

Johnson noted that the bill enables cities to deal with “blight” -- it simple provides a defintion of blight. Grundhoefer responded the local officials are in the best position to make that judgment.

Before the hour ended, I put to Rep. Johnson a question that lead to the second hour. Specifically, I noted that his bill was putting criteria around a legitimate government authority. Was there not opportunity to do so with other often abused government authority such as publich health and safety legislation, which, in the case of smoking bans, for example, goes too far in legislating individual choice?

Johnson agreed, citing smoking bans and other “nanny state” legislation that don’t have criteria. He wasn’t sure what those might be, and thought it would be “World War II” defining them, but agreed it would be a good idea to explore. Right now, he noted, we fall back on public health and safety with “what is good for you” as a default for justifying legislation. The result is we [legislators] argue silly little things.

So, I challenged Johnson, “When you win the eminent domain battle, we can look forward to legislation proposing criteria for public health regulation?”

He laughed, “Give me a week to recover,” he said.

That leads us into the second hour of the “Patriot Insider” a discussion of smoking bans with St. Paul City Councilman Dave Thune and Hennepin County Commissioner Penny Steele.

Category: The Patriot, Eminent Domain, Local Politics