Commentary: On Constitutional Issues - Eminent domain, regulatory

Since The Daily Record published, on Aug. 20, 2004, my commentary on the law of condemnation (takings/eminent domain) and the impact of the Supreme Court of Michigan's decision in County of Wayne v. Hathcock, there have been a number of noteworthy developments.

The foremost occurred at the opening 2004 term of the Supreme Court of the United States, when the Court granted certiorari in Kelo v. City of New London. On review, according to a report in the Wall Street Journal, is a bid by the City of New London [Connecticut] to seize some perfectly fine waterfront homes and replace them with a [privately owned] office building.

The Supreme Court's consideration of the Kelo case spawned commentary.

For example, the Annapolis Capital said that the Connecticut decision in Kelo sounded like a flagrant abuse of eminent domain, ignoring a government's obligation to respect the property rights of existing taxpayers. That editorial comment mirrored an editorial from the Hartford Courant which declared: fairness dictates that the state Supreme Court's decision in Kelo v. City of New London be overturned. As the Courant noted, the Supreme Court's review will be that court's first significant look at eminent domain in fifty years.

Conservative columnist James Kilpatrick opined that the Kelo case is a Big One, reaching to the very heart of what constitutional law is all about. According to Kilpatrick, the question before the court will be: is it lawful - is it constitutionally permissible - for a City to condemn unoffending private property for a private business development? Kilpatrick expressed no doubt that such a taking is not for a public use.

And public use is what this fight is all about. The Fifth Amendment to the U.S. Constitution precludes the taking of private property without just compensation for anything other than public use. Over the years, public use has been massaged down, by some interpretations, to public benefit. Watered down, eminent domain equals corporate welfare, according to comment in the Washington Times, on Nov. 9, 2004.

At issue is not urban renewal or demolition of blighted areas. At issue is the transformation of New London's Fort Trumble neighborhood into a waterfront hotel and conference center, a marina, 80 new residences, office space and parking and health club, for the benefit of a large corporate neighbor. A law professor writing in the Western Massachusetts Law Tribune termed the threatened wrecking of 114 homes the largest destruction of property in New London since Sept. 6, 1781, when British forces under Benedict Arnold burned down over 150 buildings.

Such bulldozing would hardly seem to merit defense, but statists, particularly those in, or representing, planning and development agencies of government, look fearfully upon what the Supreme Court might do to their ultimate tool if the court cabins the power of eminent domain.

The statists are scrambling for some flexibility in the expected Supreme Court's constriction of eminent domain in Kelo. A professor from Fordham Law School has argued for retaining public benefit but reinforcing the just compensation concept so that the victims of the taking will not be left with only market value, but would be placed in positions no worse off than they were prior to the taking.

On the other hand, reversing Kelo will halt taking for virtually any purposes at all, as long as the State can make a colorable argument that its actions are in the public interest, as many courts, according to the New York Law Journal, have permitted.

No hearing date has yet been set by the Supreme Court for the Kelo case. As it rests on the high court's docket, writers continue to uncover the historical meaning of eminent domain. One writer found a 1795 report of a case which said that the state may not exercise the despotic power to take private property - except in urgent cases. Indeed, the Supreme Court justice who authored that statement could not imagine a situation in which the necessity of a state can be of such a nature as to authorize or excuse the seizing of landed property belonging to one citizen and giving it to another citizen. The quotes came from Vanhorn's Lessee v. Dorrance, from the days when Supreme Court jurists rode circuit. The quotes might find a place in the ultimate Kelo opinion.

As important as Kelo is, for the long term consideration of eminent domain, it is not the only case on the docket of the Supreme Court of the United States this term relating to the takings clause. A week after the 2004 term opened, the Supreme Court took certiorari in Lingle v. Chevron USA, a decision from the 9th Circuit, which began as an attack on Hawaii's law that regulates the rent oil that companies may charge their dealer-run stations.

Unlike Kelo, Lingle does not involve traditional eminent domain taking or physical taking of real estate. Rather, Lingle implicates so-called regulatory takings, whereby government, through legislation or otherwise, impacts property rights.

Lingle raises Fifth Amendment issues which arise from the writings of Mr. Justice Holmes and his decision more than 80 years ago, in the Mahon case.

When decided, the court's decisions in Kelo and Lingle may configure anew the takings concepts which were placed originally in the Fifth Amendment through the efforts of James Madison. Doubtlessly, the development world, legislators, constitutional scholars and others anticipate the outcomes.

M. Albert Figinski is a partner in the Baltimore office of Saul Ewing LLP and a former circuit judge in Baltimore City.

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