Eminent Domain

The history of eminent domain in the United States dates back to the earliest moments of the fledgling nation, when patriot soldiers camped out on private property during the Revolutionary War. The “Takings Clause” of the Fifth Amendment enshrined – and imposed limitations on – the implied governmental rights over private property. The clause reads “… nor shall private property be taken for public use, without just compensation.”

Legal academics still debate whether the comma after the word “use” is actually a punctuation mark or a smudge, and there may be some grammatical import to the distinction, but the essentials of the Takings Clause are clear: the government retains the right of eminent domain in circumstances of public use, provided that just compensation is paid. Eminent domain has always been a controversial doctrine, and recent legal disputes demonstrate that much uncertainty remains over the appropriate definition of “public use” and the proper scope of eminent domain powers.

Eminent domain may conjure images of government acquisitions of land for highways, municipal buildings and other projects physically occupied by public entities. From the earliest years of the republic, however, courts have construed eminent domain broadly to allow for any takings that advance the “public interest.”

By this rationale, the land in question need not be technically occupied by the public, and even a transfer of ownership to another private entity may suffice. In the 1832 case of Boston and Roxbury Mill Corp. v. Newman, the Supreme Court upheld a Massachusetts Mill Act that allowed for the flooding of private land in order to build a privately-owned mill, on the grounds that the mill confers substantial benefits to the public. The ruling also upheld the longstanding precedent that the limits of eminent domain powers should be left to the determination of the states.

The ambitious urban renewal projects undertaken by many cities in the 1950s and 1960s demanded a renewed evaluation of limitations on eminent domain. The landmark 1954 case of Berman v. Parker affirmed that “blighted” areas of Washington DC can be taken through eminent domain for transfer to another private developer. The court interpreted the term “public use” broadly enough to include any “public purpose,” and established that even non-blighted properties could be taken if deemed necessary for a broad redevelopment project.

The more recent 2005 case of Kelo v. New London reevaluated the “public purpose” standard and the notion that transfer of property from one private owner to another could constitute a “public use.” In a 5-4 split ruling, the majority upheld the City’s transfer of a non-blighted tract of land to the drug company Pfizer on grounds that the action would spur “economic development.” Writing for the dissent, Justice Sandra Day O’Connor argued that now “Any property may now be taken for the benefit of another private party.” The ruling has faced renewed criticism after Pfizer announced in 2009 that they would be leaving the facility.

In the wake of Kelo, the federal government and a number of states took steps to restrict the use of eminent domain. In June of 2006, President George W. Bush issued an executive order that directly addressed the Kelo ruling, “limiting the taking of private property by the Federal Government to situations in which the taking is for public use … and for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties …”

This executive order only applied to federal action, but following the Kelo decision, 43 states updated their eminent domain laws to reign in takings for the purpose of economic development. Currently New York remains among a dwindling handful of states that have not enacted legislation to limit the exercise of eminent domain powers following Kelo.

Eminent domain in the State of New York is governed by the Eminent Domain Procedure Law (EDPL) , first enacted in July of 1978 and revised regularly since that time. The EDPL does not give much detail on the range of possible justifications for eminent domain, other than actions must be undertaken for a “public use, benefit or purpose.” (103(G)). The EDPL establishes a process for public hearings on a proposed action, and the possibility for judicial review by the appellate division of the State’s supreme court (201-207). The EDPL also contains lengthy provisions ensuring that property owners are provided “just compensation” in the amount of the condemnor’s “highest approved appraisal.” (301-304).

The relatively open ended definition of “public use, benefit or purpose” in the EDPL has led to protracted controversies over recent eminent domain actions in New York City. In 2006, the Empire State Development Corporation (ESDC) conducted a blight study of the site for the proposed Atlantic Yards project in downtown Brooklyn. The ESDC found the majority of the site satisfied the blight designation, and that the proposed project would benefit the public by eliminating blighted conditions and spurring economic development.

The ESDC thus concluded that eminent domain powers would be warranted to acquire properties necessary for the project. A resident group, Develop Don’t Destroy Brooklyn (DDDB), challenged the findings in federal district court and New York State court, opposing the use of eminent domain to confer land to a private developer. The case ultimately reached New York’s highest court – the Court of Appeals – who ruled in favor of the ESDC in November of 2009.

The Court of Appeals of affirmed the blight findings and upheld the principle that under the EDPL, the State could use eminent domain powers to transfer land to a private developer, provided that the project served a public purpose. The court indicated that any substantive changes to the eminent domain laws in the state must be enacted through the legislature.

The definition of blight assumed even greater prominence in the subsequent litigation surrounding Columbia University’s Manhattanville expansion. In December of 2009, a state appellate court of denied the use of eminent domain to acquire land from the few remaining holdouts obstructing the university’s plans.

The sharply worded ruling accused the ESDC of making a perfunctory determination of blight and subverting the public purpose criteria. The court questioned the ESDC and Columbia’s reliance on consultancy firm AKRF, an organization accused by some of providing “rubber stamp” blight determinations. The ESDC promised to appeal the ruling. Additional legal proceedings may place pressure on the Court of Appeals and the state legislature to reform or clarify the EDPL.

State Senator Bill Perkins (D-Manhattan) has promised to lead a legislative initiative to reform the EDPL to protect property owners. His proposed bill would replace the current definition of blight as “substandard and unsanitary” with a more objective series of criteria. State Assemblyman Richard Brodsky (D – 92nd District) is also preparing a package of reforms.

His proposal would create an “eminent domain ombudsman” who would mediate resident challenges to eminent domain powers, and ensure that property owners are compensated at above market value. He also proposes establishing a commission to study possible modifications to the EDPL.