Montana Viewpoint

July 11, 2005

I very seldom run into anyone who volunteers me their opinion on a Supreme Court case, but the recent decision on eminent domain in Kelo v. the City of New London has set a new standard for dissatisfaction.

In short, the city of New London, Connecticut wanted to exercise their right to condemn residential property so that Pfizer Pharmaceuticals could build a hotel and office complex on it. The city's rationale was that the project would bring economic development and tax revenue in to the city treasury.

The site involved was a long established working class neighborhood (itself an endangered species) and while some homeowners reveled at the chance to sell their homes, others who had lived there all their lives, were, to put it mildly, torqued about the city's plans. Six homeowners sued to prevent the loss of their homes, and lost.

Although the name “eminent domain” dates only from 1625, the concept goes back to the beginnings of history, and was basically the right of the ruler to take what he wanted for whatever purpose he wanted. As the centuries progressed, that right became limited to those purposes that would serve the public good. When the United States was born, each state was given the right of eminent domain, but the Fifth Amendment to the Constitution also asserts the right of citizens to receive “just compensation” for the taking of their property for public use.

While the guiding principal regarding the exercise of Eminent Domain is that the project the property is taken for should be in the public interest; that has left a lot of leeway. Montana law specifically enumerates some 45 different categories that qualify, including “urban renewal projects.”

In the words of the Missoula City Attorney, “A significant part of urban renewal efforts may be to redevelop and rehabilitate real property, increase its value, and keep it on the tax rolls for the benefit of all taxing jurisdictions.” [Testimony against SB 382, 2005 Legislative Session]

The government purchase of private land is most often amicable between landowner and government. It is in those relatively few cases where the landowner does not wish to sell that the exercise of eminent domain and its concomitant power of condemnation is used.

An infamous use of eminent domain was the condemnation of the Poletown neighborhood by the cities of Detroit and Hamtramck so that General Motors could build a new automobile manufacturing facility there. The 1981 Michigan Supreme Court upheld the right of the government in the Poletown case, but in 2004 unanimously reversed that decision. A little too late for the 4200 people who lost their homes, I suspicion.

The great majority of these projects do serve the public good, but some of them do more to serve private enterprise than the public. A Montana example was the recent proposal by Yellowstone Pipeline Company to run a pipeline from Missoula to Spokane after the Tribal Council of the Flathead Nation refused to renew their lease. Since the petroleum product would be shipped directly through to Spokane, the only conceivable public benefit to Montanans would be an increase in the tax base. A multitude of residents along the route were outraged, and, happily, the project was dropped.

When a local government talks about “economic development” being in the public good, it needs to be taken with a healthy skepticism. For starters, do the public benefits of a shopping mall warrant the condemnation of the property of an unwilling seller? The big box stores believe it does, and so do most local governments, apparently.

The land has to be condemned by the government, which can then turn around and sell - or give - the land to whomever they want to. A bill I introduced in the last legislative session (SB 382) would have curbed this practice by forbidding governments to sell land taken by eminent domain for ten years. It never made it out of the gate because of strong opposition by the League of Cities and Towns, the City of Missoula, and the City of Billings, who wanted to keep the ability to take “blighted” private land for economic development. Last week, the United States Supreme Court affirmed that right in Kelo.

You can harbor any opinion you want on this issue, but as a guy with personal experience in having property condemned, I can tell you it’s bad enough to lose land through eminent domain even for a purely public purpose - which it was my case.

But the concept of seizing homes and businesses to give retail giants like Target, Costco, Wal-Mart, and Home Depot store sites under the guise of increased tax revenue chills the sanctity of private property in America. (Even large retailers are not safe - the township of North Bergen, N.J. moved to condemn a K-mart store in order to accommodate a new Home Depot.)

The Utah legislature recently stripped economic development agencies of the right of eminent domain. Well done. Now Montana should follow suit.

I am indebted to the excellent research on this topic by Krista Lee Evans of the Montana Legislative Council staff in her September 2000 report to the Montana Environmental Quality Council: Public Benefits and Private Rights: Countervailing Principles of Eminent Domain.

Jim Elliott
Phone: 406-444-1556
Mail: State Senate Helena, MT 59620