Eminent Domain

Can the government seize your house to build a shopping mall?  Get a legal expert’s take on the evolving power of eminent domain.

Adam Freedman
August 19, 2011


Today’s topic: Eminent Domain 

And now, your daily dose of legalese:  This article does not create an attorney-client relationship with any reader.  In other words, although I am a lawyer, I’m not your lawyer.  In fact, we barely know each other. If you need personalized legal advice, contact an attorney in your community.

What is Eminent Domain?

Eminent Domain is a term used to describe the government’s power to seize private property when necessary for public use.   This power has been around for centuries, but as I’ll explain in a minute, there has been great controversy in recent years about the limits of eminent domain.  In a nutshell, the question remains whether the government can seize your house to make way for a shopping mall.

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The Fifth Amendment Requires “Just Compensation”

The Fifth Amendment to the Constitution provides the basic legal framework for eminent domain.  That amendment, of course, has lots of great stuff like due process and protection against self-incrimination, but the very last clause of the amendment states that private property shall not “be taken for public use, without just compensation.” 

That clause imposes two limitations on the power of federal and state governments: first, any taking of property has to be for a “public use.”  Secondly, the government must provide “just compensation.”   In some cases, parties quibble about what constitutes “just compensation,” but the more controversial aspect is what qualifies as “public use.”  After all, it’s nice to be compensated, but most property owners would rather not have their property seized in the first place.

What is Public Use?

Traditionally, the requirement of public use was interpreted narrowly, as referring to property that could be directly used by all members of the public, like a park or a highway.   But a broader definition began to appear in the post-World War II era.

In 1954, the Supreme Court held that economic development could be a legitimate “public use” to trigger eminent domain power.  In the case of Berman v. Parker, the court upheld a federal law that allowed the government to condemn properties in certain depressed areas of Washington, DC and, potentially, to transfer those properties to private developers in the hope of sparking economic development.

The Berman case, in turn, played a crucial role in the Supreme  Court’s controversial 2005 decision in Kelo v. New London.   That case involved plans by the City of New London, Connecticut to acquire 90 acres of private property and turn it over to developers who would transform it into a new commercial/retail zone.   The plaintiffs in that case were property owners who objected to the City’s use of eminent domain, regardless of their offer to pay “just compensation.”

In 2005, the Supreme Court decided that the government can seize private property for any “public purpose.”

The Supreme Court, however, upheld New London’s seizure of the plaintiffs’ property.  The Court held that the Fifth Amendment’s requirement of “public use” really translated into a requirement of a “public purpose” – in other words, any purpose that was intended to benefit the public, even indirectly. The plaintiffs had argued that economic development should be excluded from the definition of public use, since it primarily benefits developers, not the public.  But the court disagreed, holding that any benefit to private parties was “incidental” to the larger public purpose.

[[AdMiddle]The Supreme Court also rejected the argument that the City of New London had the burden of proving that the public benefits derived from the planned development  are “reasonably certain.”  Instead the court held that it would defer to the decisions of state and local governments, provided they have a legitimate purpose and that the means they choose are “not irrational.”

Many States Now Restrict the Power of Eminent Domain

But remember: the Fifth Amendment  provides the minimum requirements for eminent domain.  Individual states are free to enact more restrictive laws.  And after the Kelo decision, dozens of states did just that.  Now, most states impose some conditions on the use of eminent domain for economic development.  In some cases, the restrictions are severe.

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