Eminent Domain and Takings Law:
Federal and Northern New England Perspectives
Friday – June 13, 2008
Benjamin Frost, Esq, AICP
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You know there’s a
problem when…
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Municipalities’ Power
• Local control? That may be a desire, but
our three states are Dillon’s Rule states
• Agents of the sovereign
• Must look to statutes for authority to do
anything
• Statutory eminent domain authority for
municipalities to do a variety of things
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Source of Eminent Domain Power
• An inherent power of the sovereign
• Cannot be surrendered or taken away
• But the sovereign itself can impose limits
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Constitutional Limitations
• US and state
Constitutions restrict the
power of the sovereign to
take property
• Require “public use” and
“just compensation”
King John signing the
Magna Carta, 1215
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U.S. Constitution, Amendment V
No person shall be held to answer for a capital, or otherwise
infamous crime, unless on a presentment or indictment of a
grand jury, except in cases arising in the land or naval
forces, or in the militia, when in actual service in time of
war or public danger; nor shall any person be subject for the
same offense to be twice put in jeopardy of life or limb; nor
shall be compelled in any criminal case to be a witness
against himself, nor be deprived of life, liberty, or property,
without due process of law; nor shall private property be
taken for public use, without just compensation.
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NH Constitution, Part 1, Article 12
[Art.] 12. [Protection and Taxation Reciprocal.] Every
member of the community has a right to be protected by it, in
the enjoyment of his life, liberty, and property; he is therefore
bound to contribute his share in the expense of such
protection, and to yield his personal service when necessary.
But no part of a man’s property shall be taken from him, or
applied to public uses, without his own consent, or that of
the representative body of the people. Nor are the inhabitants
of this state controllable by any other laws than those to
which they, or their representative body, have given their
consent.
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VT Constitution, Ch. 1, Article 2
“That private property ought to be
subservient to public uses when necessity
requires it, nevertheless, whenever any
person’s property is taken for the use of the
public, the owner ought to receive an
equivalent in money.”
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ME Constitution, Art. 1, Sec. 21
“Private property shall not be taken for
public uses without just compensation; nor
unless the public exigencies require it.”
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A Fair and Balanced View of Kelo
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5B
5A
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5C
4A
Fort Trumbull
State Park
4B
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Pfizer Site
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Susette Kelo…
…and her cute cottage.
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What Does “Public Use” Mean?
The Kelo Court’s Polar Propositions
1. “[T]he sovereign may not take the property of A
for the sole purpose of transferring the it to
another private party B, even though A is paid
just compensation.”
2. [A] State may transfer property from one party
to another if future “use by the public is the
purpose of the taking…”
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Public Use(s)
• “Use by the public” requirement was
rejected long ago by federal and state
courts: “…proved impractical given the
diverse and always evolving needs of
society.”
• Apply the “more natural interpretation” of
public purpose.
• What did Kelo really change?
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Public Purpose
Berman v. Parker (1954)
• 5,000 DC housing units, mostly beyond repair
• Most of condemned land to be used for public
facilities
• Petitioner’s thriving department store also targeted
• Unanimous court: deferred to legislative judgment
that planning must be done as a whole; “community
redevelopment programs need not, by force of the
Constitution, be on a piecemeal basis—lot by lot,
building by building.”
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Public Purpose
Hawaii Housing Authority v. Midkiff (1984)
• Property taken from lessors and transferred
mostly to long-term lessees.
• A to B private-private transfer?
• No—intended to end long-standing feudal
ownership system (land oligopoly)—a valid
public purpose
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The New London Situation
• A carefully formulated economic development
plan that will afford community-wide benefits
• State statutory authority
• Limited scope of federal review
• Appropriate to “resolve the challenges of the
individual owners, not on a piecemeal basis,
but rather in light of the entire plan.”
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The Conclusion
• Court finds no basis for exempting
economic development from historically
broad understanding of “public purpose”
• Court declines to second-guess the City’s
determination of what properties need to be
acquired
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Kelo Court’s Invitation
• “…nothing in our opinion precludes any
State from placing further restrictions on its
exercise of the takings power.”
• Constitutional provisions: e.g., Michigan
• Statutory provisions: e.g., California
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New Hampshire Pre-Kelo
• Merrill v. City of Manchester (1985)
• “Public use” subject to a balancing test:
“The net benefit to the public will consist of the
benefits of the proposed project and the benefits
of the eradication of any harmful characteristics
of the property in its present form, reduced by the
social costs of the loss of the property in its
present form.”
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New Hampshire Pre-Kelo
• Merrill
– Undeveloped land in Current Use (RSA 79-A)
– Proposed to be taken for an industrial park
– Clear legislative purpose: social value in undeveloped
land— “open space”
– Such land may only be taken for direct public use—
school, playground, utilities—and not for uses with
incidental public benefits
• Could a Kelo-like taking have occurred under
Merrill?
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New Hampshire Post-Kelo
• No cases, but lots of activity in the
Legislature
• Chapter 234, Laws of 2006
• “Public use” clarified
– Precludes takings solely for facilitating
“incidental private use.”
– Excludes public benefits from private economic
development, “including increased tax revenues
and increased employment opportunities.”
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New Hampshire Post-Kelo
• 2006 Constitutional Amendment
• Part I, Art. 12-a
[Power to Take Property Limited.] No part of a person's
property shall be taken by eminent domain and
transferred, directly or indirectly, to another person if the
taking is for the purpose of private development or other
private use of the property.
Adopted November 7, 2006
• What about the balancing test?
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Vermont Pre-Kelo
85 VSA § 3210. Eminent domain; authority; survey.
(a) A municipality shall have the right to acquire by
condemnation a fee simple title or any other interest in real
property which it may determine necessary for or in
connection with an urban renewal project under this chapter.
The powers conferred upon municipalities under this section
shall be considered "urban renewal project powers" as
defined in section 3219(b) of this title and the term
"municipality", as used in this section, shall mean the agency,
board, commissioner or officers having such powers under
section 3219(a) of this title. The municipality shall set out the
necessary lands and cause them to be surveyed. An urban
renewal plan approved under section 3207(d) of this title
may be considered to constitute such a survey.
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Amended 1963, No. 2, § 3, eff. Feb. 14, 1963; 1964, No. 9 (Sp. Sess.), § 1, eff. March 5, 1964.
Vermont Post-Kelo
12 VSA § 1040
(a) Notwithstanding any other provision of law, no
governmental or private entity may take private property through
the use of eminent domain if the taking is primarily for purposes
of economic development, unless the property is taken pursuant
to chapter 85 of Title 24 (urban renewal)
(b) This section shall not affect the authority of an entity
authorized by law to use eminent domain for the following
purposes:
(1) transportation projects, including highways, airports, and railroads;
(2) public utilities, including entities engaged in the generation, transmission, or
distribution of electric, gas, sewer and sewage treatment, or communication
services;
(3) public property, buildings, hospitals, and parks; or
(4) water, wastewater, stormwater, flood control, drainage, or waste disposal
projects.
Added 2005, No. 111 (Adj. Sess.), § 1.
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Maine Post-Kelo
1 MRSA § 816. Limitations on eminent
domain authority
1. Purposes. Except as provided in subsections 2 and 3
and notwithstanding any other provision of law, the
State, a political subdivision of the State and any other
entity with eminent domain authority may not condemn
land used for agriculture, fishing or forestry or land
improved with residential homes, commercial or
industrial buildings or other structures:
A. For the purposes of private retail, office, commercial,
industrial or residential development;
B. Primarily for the enhancement of tax revenue; or
C. For transfer to an individual or a for-profit business entity.
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Just Compensation
• Fair Market Value Measurement
– Most probable price on the open market
– Determined three ways: comparable sales,
income, replacement cost
– Should be based on the “best and highest” use
of the property
• Highest market value, greatest financial
return, most profit
• Should represent a reasonably probable use
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NH Eminent Domain Procedure Act
• Since 1971, New Hampshire law governing
all condemnations of property for public use
• Not an expansion or limitation of the rights
of condemnees or condemnors
– Merely established a consistent process for
eminent domain
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NH Eminent Domain Procedure Act
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•
•
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Appraisal and Notice of Offer
Declaration of Taking; Recording of Notice
Condemnee’s Options
Appeals
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Inverse Condemnation—Federal
• Pennsylvania Coal Co. v. Mahon (1922)
– “…while property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking.”
– How far is “too far”?
• Lucas v. So. Carolina Coastal Council (1992)
– A compensable taking will occur if a regulation denies
“all economically beneficial and productive use of the
land.”
– Conversely, if a reasonable, economically beneficial and
productive use of the land remains that is not prohibited
by regulation, then a taking has not occurred.
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Inverse Condemnation—States
• NH, ME, and VT law is similar: reasonable
regulations will generally be upheld.
• What’s reasonable?
– Limitation of owner’s use to protect others
from harm or loss of use of their own land
– But excessive action will trigger compensation
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Misinterpretation and Delay
• Delay in permitting is generally not
compensable—it is a cost of doing business,
part of the land development process
• Errors in interpreting a valid regulation also
not compensable
• Distinguish from an invalid ordinance
• Development moratoria do not require
compensation in the abstract (Tahoe-Sierra,
535 U.S. 302 (2002)).
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Questions?
Ben Frost
bfrost@nhhfa.org
(603) 310-9361
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