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Is Your Property Safe from the Government? PDF Print E-mail
News/Features - Feature Stories
Tuesday, 05 July 2005 18:00
On June 6, Davenport Mayor Charlie Brooke vetoed a resolution that used the city’s power of eminent domain to grant an easement for a sanitary sewer. The city council had decided by a 6-4 vote to condemn the property in question to assist a condominium project developed by longtime city-government critic Niky Bowles.

“Such a use is an unconstitutional taking of private property for private gain and serves no public purpose,” Brooke wrote in his veto message. “The exercise of the kingly power of eminent domain or condemnation was one of the ultimate interferences and intrusions of the government into the private lives of its citizens that the founders of our country tried to limit severely.”

This reading of the U.S. Constitution was certainly defensible at the time Brooke – an attorney by trade – vetoed the resolution. But on June 23, the U.S. Supreme Court issued its 5-4 decision in the case of Kelo v. City of New London, which arguably undercut constitutional property rights.

Brooke called the city council’s vote to use condemnation to grant Bowles an easement “unconstitutional,” but the Supreme Court’s decision casts doubt on that claim.

As Justice Sandra Day O’Connor said in her dissent: “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”

Brooke disagreed that the majority decision significantly changed property-rights law, and said he would write the same veto message today as he did before the Kelo ruling. “The majority decision does extend the right of condemnation a tiny bit farther than people thought it went,” he said.

The reality is that the repercussions of Kelo won’t definitively be known until the Supreme Court decides a case that tests an extreme situation in which any public benefit of condemnation is obviously secondary to the profit motive of the benefiting private party. That case might look a lot like the Bowles situation in Davenport.

Until then, however, assumptions about the rights of property owners have been reversed.

“This Perverse Result”

The Fifth Amendment of the U.S. Constitution states in part that “nor shall private property be taken for public use, without just compensation.”

Because it is assumed that every word of the Constitution has meaning, that phrase has been read to have two separate elements: First, that the government cannot take land without compensating the owner, and second, that private property cannot be taken except when the taking has a public use.

Initially, that part of the Fifth Amendment was interpreted to require that land be taken only when the resulting use allowed for public access – such as schools, hospitals, parks, and roadways. But in a series of decisions at the end of the 19th Century and the beginning of the 20th, the court allowed eminent domain to be used to forcibly transfer property between private entities, so long as the resulting use created a public benefit – an expansion of the court’s definition of “public use.”

The Kelo case involved the condemnation of homes for a private community-redevelopment project. In its particulars, the case doesn’t have many repercussions, because the development plan in question was, according to the Supreme Court of Connecticut, “projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city, including its downtown and waterfront areas.” The scope of the development plan “unquestionably serves a public purpose,” the U.S. Supreme Court ruled.

But the petitioners in the case asked the Supreme Court to decide an issue that expanded its importance, requesting that the justices adopt a “bright-line rule that [private] economic development does not qualify as a public use,” according to the court.

Justice John Paul Stevens, writing for the court, rejected this argument: “Promoting economic development is a traditional and long-accepted function of government,” he said.

Furthermore, the decision rejects arguments in favor of creating a standard in which “we should require a ‘reasonable certainty’ that the expected public benefits will actually accrue,” Steven wrote. “For more than a century, our public-use jurisprudence has wisely eschewed rigid formulas and intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justify the use of takings power.” In other words, the Supreme Court defers to Congress, state legislatures, and local governments when it comes to determining what is in the public interest.

The majority decision envisions – but does not deal with – a case similar to the Davenport-Bowles situation: “It is further argued that without a bright-line rule nothing would stop a city from transferring citizen A’s property to citizen B for the sole reason that citizen B will put the property to a more productive use and thus pay more taxes. … While such an unusual exercise of government power would certainly raise a suspicion that a private purpose was afoot, the hypothetical cases … can be confronted if and when they arise.”

Yet O’Connor, in her dissent, argued that the majority’s ruling in Kelo represents a significant departure for the Supreme Court in its interpretation of the Fifth Amendment. She argued that in previous cases, the court had determined that the “pre-condemnation use of the targeted property inflicted affirmative harm on society” – that not only was the proposed use an improvement over the existing one, but that the existing one was demonstrably harmful to the community.

The Kelo decision, she continued, creates a nearly untenable quandary about what constitutes proper public use: “New London does not claim that … well-maintained homes are the source of any social harm. Indeed, it could not so claim without adopting the absurd argument that any single-family home that might be razed to make way for an apartment building, or any church that might be replaced with a retail store, or any small business that might be more lucrative if it were instead part of a national franchise, is inherently harmful to society and thus within the government’s power to condemn.”

The end result, she claimed, is that “any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has the license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result.”

The Local Fallout

The Bowles situation is just one situation in which eminent domain has been used or is expected to be used for private economic development.

In that case, the Davenport City Council voted on June 1 to begin condemnation proceedings on property owned by Sheila Speer. That would allow for the city to run a sewer line through what is now Speer’s property for Bowles’ 168-condominium project on Eastern Avenue south of 53rd Street. Bowles and Speer have been unable to come to an agreement on an easement, and a more-expensive alternative to eminent domain was available to connect the property to the sewer. But six members of the council voted in favor of eminent domain.

Brooke said he can’t envision his veto being overturned. Bowles declined to comment on Tuesday, and her attorney did not return a phone message.

In Rock Island, the city has instituted eminent-domain proceedings against the old Lincoln School, presently owned by Chris Larson. (See “Landmark Loggerhead,” River Cities’ Reader Issue 524, April 13-19, 2005.) An amended complaint in that case was filed on June 15, and the defendants have 30 days to respond.

Unlike with Bowles’ property, there would be an obvious public benefit to the redevelopment of the historic property. And Larson has not taken care of the building, so its present use could be reasonably seen as a public harm.

Yet it’s not a slam-dunk case for the city. Because of the Kelo case, the courts probably won’t blink about the fact that the property would most likely be redeveloped by private parties. But the City of Rock Island claims it has no specific plans for the old school building. As a result, unlike in Kelo, there is no economic-development plan for the property or the surrounding neighborhood. Furthermore, Larson has been discussing selling the property to other private individuals who want to develop it. So in this case, the City of Rock Island is using eminent domain to benefit an undefined private developer over the interests of both the current owner and a not-for-profit organization that wants to purchase the property.

Yet it’s unlikely the Kelo case will have a direct bearing on the disposition of Larson’s property. Once the Supreme Court makes its rulings, it’s up to local governments and private individuals to decide their courses of action based on those decisions. For instance, the City of Rock Island might decide to abandon eminent-domain proceedings, or Larson might choose not to fight them in light of the high-court ruling. Rather than settling the issue once and for all, Kelo provides a context in which economic-development eminent-domain decisions will be made. As Brooke noted, “The limitation on condemnation is always going to be at the local level.”

And that should certainly raise some alarm. Without Brooke’s veto, Bowles would probably soon have her easement. The mayor said that concerns him. “I thought it was way out of line,” he said of the city-council action. Bowles is “out on the greenfields out on the fringe of the city. … It has nothing to do with a depressed economy or jobs.”

Due Process Is Not a “Technicality”

While it certainly doesn’t have the national impact of Kelo v. City of New London, the case of Richard Meyer certainly deserves attention as it relates to constitutional rights and the disposition of property.

On May 20, 2005, the Iowa Supreme Court ruled that the City of Davenport illegally charged Richard Meyer more than $59,000 for nuisance abatement. Meyer had purchased 7.7 acres of property at 2400 West River Drive in June 2002, and the city had notified the previous owner – Paul Reid – of the nuisance on August 21, 2001. Because the property was not cleaned up by either Reid or Meyer, the city hired a contractor to clean it up in October 2002.

The city argued that Meyer was aware of the nuisance order because he was present at a nuisance-abatement hearing. But Meyer’s attorney, Michael J. Meloy, claimed that the city had failed to follow city code as it related to written notice of nuisance-abatement orders. The code states: “The city administrator may cause to be served a written notice to abate the nuisance.”

Although the previous owner had received written notice, Meyer had not, Meloy argued.

The Iowa Supreme Court agreed, and said that as a result Meyer couldn’t be forced to pay for the nuisance cleanup. “The city failed to follow its code provisions and afford the owner his right to procedural due process,” the court stated in its decision.

Meloy said that by charging Meyer more than $59,000 for the cleanup, the nuisance abatement represented a “taking” of the property, because Meyer bought it for $50,000.

To some people, it might appear that Meyer got off on a technicality. Meloy disagreed. “Every property owner has due-process rights,” he said. “The local municipality cannot take somebody’s property” with following its own ordinances. “It’s not a technicality.”

Meloy also raised other issues in his brief before the Supreme Court, including saying that the city should not be allowed to charge Meyer for cleanup of an adjoining property and that a hearing officer failed to follow city code when he ruled on Meyer’s objection. Because the Iowa Supreme Court ruled that Meyer had been denied his due-process rights related to notification, it didn’t rule on any of the other issues.
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