LAW 516-001 – Property II

Eminent Domain


Eminent domain allows the government to take private property for public use in exchange for just compensation.

The Fifth Amendment puts this restriction on the federal government when it says, "nor shall private property be taken for public use, without just compensation."

It has also been incorporated against the states by the Fourteenth Amendment's requirement of due process.

Public Use

In determining whether something is a public use, the public purpose test is used.

Public Purpose

As long as a taking is rationally related to a legitimate public purpose within the scope of the government's police power, the public use requirement of the Fifth Amendment is satisfied. Kelo.

Examples
  • To eliminate a blight. Burban.
  • To eliminate extreme wealth. Hawaii Housing Authority.
  • To promote economic development. Kelo.

The federal restriction presented in Kelo is the minimum purpose required, but states can and do set stricter requirements,as seen in County of Wayne, which limited it to three situations:

  1. Where "public necessity of extreme sort" requires collective action
  2. Where the property remains subject to public oversight after transfer to a private entity
  3. Where the property is selected because of "facts of independent public significance," rather than in the interest of the private entity to which the property is eventually transferred

These situations are valid public purposes under the federal restriction as well.

Just Compensation

Just compensation means the fair market value of the property when the taking occurs.

Fair Market Value

Fair market value means the amount that a willing buyer would pay in cash to a willing seller. It's usually determined by recent sales of comparable properties.

Inverse Condemnation

When the government does not condemn a property and take title of land in eminent domain proceedings but otherwise deprives a property owner's rights in a way that otherwise constitutes a taking, that landowner can initiate an inverse condemnation action to show that his land was taken, get it condemned, and get just compensation therefor.

Taking

Takings can occur when:

  1. The government actually condemns the property and takes title.
  2. The government conducts a permanent physical invasion of the property.
    • When there is a physical invasion of the property, the Supreme Court has consistently held that a taking has occurred, regardless of how small a diminishment in value may result.
  3. Regulatory Taking

    A regulatory taking is where the state effects a taking of land by restricting its use so that the owner is unable to develop a significant portion of it.

    The standard for what constitutes a regulatory taking was established in Penn Central, which said that "economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations" must be balanced against "the character of the governmental action."

    • The economic impact of the regulation on the claimant is determined by comparing the fair market value before and after the regulation.
    • A buyer who purchases land already devoted to a legally permitted use usually has a reasonable investment-backed expectation that the use will continue.
    • Again, when there is a physical invasion of the property, the Supreme Court has consistently held that a taking has occurred, regardless of how small a diminishment in value may result.
    • A regulation is not a taking if it is reasonably related to the public health, safety, or welfare—even if it substantially diminishes the value of the affected land.
    • The impairment must be truly significant to give rise to a taking.
  4. Extractions and Impact Fees
    Extraction
    Impact Fee
    1. Nature
      • Essential Nexus
    2. Extent
      • Rough Proportionality

    Dolan.