Utah Bans Eminent Domain Use by Redevelopment Agencies

Utah Gov. Jon Huntsman Jr. (R) on March 17 signed into law Senate Bill 184, effectively preventing the exercise of eminent domain authority by redevelopment agencies, which otherwise had the power to transfer land from one private entity to another. Local governments may still use eminent domain for more traditionally defined and understood "public purposes."

Utah appears to be the first state to take legislative action to curb the use of eminent domain by local governments. The use of eminent domain by local governments has grown over the past 30 years as cities have taken private property from one owner to give or sell to another private owner whose proposed use promises increased tax revenue or other economic benefits.

The Michigan supreme court ended the practice there in July 2004 by reversing the infamous 1981 Poletown decision, which had allowed a Michigan city to remove more than a thousand private homeowners from land that was then given to General Motors.

The U.S. Supreme Court is considering a similar case brought by Susette Kelo against the New London Development Corporation, created by the city of New London, Connecticut. New London is trying to use its eminent domain power to take Kelo's home to give or sell to a private developer.

As in Utah, mayors and city planners across the nation contend economic development is a sufficient "public use" to satisfy the requirement of the Fifth Amendment. Until the Poletown reversal in Michigan, courts generally held in favor of the cities. The U.S. Supreme Court's decision in Kelo will have much broader application than the Michigan decision did. City planners and property rights advocates alike eagerly await the court's decision, expected in June.

Utah's legislation takes the matter out of the courts, by statute placing a higher value on the private property rights of individuals than a city's desire to increase tax revenues. Local politicians in Utah were outmaneuvered by local citizens, who organized and convinced their state legislators to take action to protect property rights.

While popular among property owners, SB 184 faced stiff opposition from municipal officials in the state. "We feel strongly that this bill not only robs local government leaders of a critical economic development tool but sends the wrong message to business leaders nationwide about the climate in Utah for new business growth," argued Centerville Mayor Michael Deamer in a letter released shortly before Huntsman signed the bill into law.

"The powers of eminent domain simply should not be used when we're talking about private development," State Sen. Curtis Bramble (R-Provo) countered.

"I'm seeing prime commercial ground that would be developed regardless of [eminent domain seizures], and we turn around and give developers the tax increment. Why are we doing that?" Bramble asked.

"The legislators of the State of Utah should be commended for taking the federal and state constitutions seriously," Sterling Burnett, senior fellow with the National Center for Policy Analysis, said. "It is always suspicious when the government takes property in the first place, but when it does so there must be a public purpose for its actions. It is not a legitimate public purpose to use government to take property from one private individual and simply give it to another.

"There must be limits to government playing fast and loose with eminent domain powers that have the potential to dramatically impact someone's life," Burnett said.

"It's one thing to take land--with just compensation--for the building of a road or some other public purpose," said Burnett. "It's another thing altogether to do this for some notion of central planning or mere wealth maximization. People should not have to sell their own property unless they want to or unless there is some pressing public purpose. Increasing the city's tax base merely for its own purpose is neither morally nor constitutionally justified.

"I wouldn't be surprised to see this become a state-by-state trend," Burnett predicted.

The Utah bill is in many ways a prelude to the issue soon to be decided in the federal courts. In the Kelo case, the Supreme Court is deciding whether a local government can use its eminent domain power to seize property from one private party and transfer it to another private party. The seven plaintiffs in Kelo are property owners whose homes and small businesses were "condemned" by the city of New London solely for the purpose of helping a prospective developer acquire 90 acres of land.

According to New London officials, condemnation and taking of the property by eminent domain is necessary not because the property is uncared-for or a nuisance, but because the new development would support more jobs and create more city tax revenues than the current homes and small businesses.

According to Alex Epstein, a fellow at the Ayn Rand Institute, "This type of justification was given more than 10,000 times between 1998 and 2002, and across 41 states, to use eminent domain (or its threat) to seize private property. The attitude behind these seizures was epitomized by a Lancaster, California city attorney explaining why a 99¢ Only store should be condemned to make way for a Costco: '99 Cents produces less than $40,000 [a year] in sales taxes, and Costco was producing more than $400,000. You tell me, which was more important?'"

As reported by Epstein, Institute for Justice attorney Dana Berliner put the issue in more personal terms. "If jobs and taxes can be a justification for taking someone's home or business, then no property in America is safe. Anyone's home can create more jobs if it is replaced by a business, and any small business can generate greater taxes if replaced by a bigger one."

Matthew Dery, one of the Kelo plaintiffs, added, "People who've never experienced this sort of treatment at the hands of the government should realize that this could happen to them. You take for granted that, in America, you own your property until you choose to sell it, but that's not the way it is in New London, or in Connecticut."

Could a state pass legislation allowing citizens to own machine guns? And to get around the idiotic commerce clause, insist that the weapons be manufactured in that state? Just curious, as I seem to recall legislation pending in Montana that would do just that.

Yes, the states have that right but sure as the sun rise if we don't get the judicial activist out of the scotus they will overturn laws such as that ignoring states rights as they did with the medical MJ ruling.

Of course you are right, just like the states can limit abortion clinics or have laws on the books banning sodomy. Oops! Wrong again.

The next developer or government agency that wants your land will merely go to court, probably the Supreme soviet will use the "commerce clause" and whammo, poof, bang kiss your house goodbye.

Just forget all about it, continue voting republican or democrat. Don't worry: it'll NEVER HAPPEN TO YOU.

Could a state pass legislation allowing citizens to own machine guns?

Good question. The 2nd Amendment is probably the area of the Constitution with the least amount of SCOTUS decisions. I would say, no, based on the current state of the law.

And to get around the idiotic commerce clause, insist that the weapons be manufactured in that state?

Probably not- States can't discriminate against out-of-state industry.

The only major change to eminent domain was several years ago and was procedural. There was a court case that determined that restricting use of private land was also a taking. For example, placing a bikeway easement or a greenbelt easement across private land amounted to denying the owner the use of the land and was a taking.

(1) The legislation in Montana has died in committee.

(2) Even worse, the legislation in MT seems to have been inspired by the 2003 9th circuit court ruling of Judge Kozinski in US vs. Stewart, in which Kozinski said that federal law could not ban the the posession of machine guns that never left their state of origin. The US (i.e. the Bush Administration) appealed, and the Supremes just after ruling on Raich (where they stated that marijuana possession could be banned even in the absence of interstate commerce)sent the case back to the 9th with the explicit instructions to reconsider in light of Raich. In other words, the Supremes instructed the 9th to find that the mere possession of machine guns, even absent interstate commerce, can be "regulated" by the feds.

All that is a long way of saying that no, it probably would do no good for a state to allow machine guns.

Of course you are right, just like the states can limit abortion clinics or have laws on the books banning sodomy. Oops! Wrong again.

I am right in this instance. You have the power to fix the problem locally, I recommend that you and like-minded citizens in your state do the same.

If you are unable to prevail locally, then it is time to look for other solutions. A national solution binding all the states is a much tougher row to hoe, in my opinion.

You said..."Private citizens in Utah didn't wait to hear what the Supreme Court would say in Kelo. We pushed our legislators and governor to implement legislation expressly prohibiting these kinds of takings. So, the Kelo decision is largely a non-event as far as Utah is concerned."

It would appear that a solid red state such as yours could limit eminent domain activities....for the moment. Hope your State Supreme Court is on board with all this.

My concern is the motivation this ruling by the SCOTUS gives for big money business and developers to get involved in local and state government activities. My analogy is what CFR did to the proliferation of campaign monies...and the establishment of the 527's. The moral is...when big big money is involved....somebody will try to find a loophole or a way to defeat the law.

In addition...not all of us have the luxury of living in Utah.

This ruling will further polarize and divide the country...in terms of the states such as yours who have these regulations.

My advice...don't invest in real estate in a state which does not have the laws you have.

The legislation in Montana has died in committee.

Now that you and other like-minded citizens are energized over the Kelo decision, it is time to start calling and faxing your state legislators and governor to demand that the legislation be resurrected, advanced out of committee, voted on, passed, and signed into law.

It can be done. Especially in Montana.

It would appear that a solid red state such as yours could limit eminent domain activities....for the moment

The heartening thing about the Kelo decision is that it has apparently enraged folks on the left as well. Legislation considered unlikely or impossible yesterday, even in blue states, seems very possible this morning.

No doubt about it, there are powerful monied interests that are rejoicing over the Kelo decision. Eisenhower used to voice his concerns about a military-industrial complex. What we are facing here is a municipal-developer complex. It's impact is directly on the individual citizen and property owner.

But the municipal-industrial complex can be defeated.

(Wonder how that would apply if a Federal agency tried to take property using eminent domain?)

I don't know. Interesting question.

My state already has limits on eminent domain takings. It's being suggested that developers will be targeting the legislatures to relax restrictions, in order to take advantage of the SCOTUS ruling. However, ultimately it's in the hands of the voters. If your state reps or city council are on the payroll of developers, vote the b*stards out!

Excuse me: municipal-developer complex. (If I'm going to coin a term, even if only for my own purposes, I ought to try for consistency)

This is a good strategy . . . but what's to stop the Supreme Court in the future from declaring this law unconstitutional?

I would embark on a three-pronged strategy on these property rights issues:

1) Do what Utah did and start fighting this at the state level;

2) Revamp all "private property" arguments to emphasize the "public benefit" aspects of private property in line with the rulings in the mill acts. If these are they rules they want to play by, we better learn to play by their rule book. And we can win---but it requires a shift in legal strategy away from fighting the old "pristine private property" arguments; and

3) GET NEW SUPREME COURT JUDGES IN.

Here's the Michigan SC decision -

The Michigan Supreme Court has ruled that local and state governments may not seize private property under their eminent domain power and give it to another private user.

In other words, the local government can’t take your home, land or business and give it to a strip mall, a car dealership, a high-tech company or any other private property owner.

The unanimous ruling on July 30, 2004 returned common sense to private property ownership, reined in political hacks stealing property to reward friends or well-heeled connections and built a clear wall between the legal concepts of private property and public use.

“We overrule Poletown,” the Court wrote, “in order to vindicate our constitution, protect the people’s property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law.”

This statement indicates that Michigan’s highest court has rediscovered its constitutional and traditional role as interpreter of law, not creative writer of law.

The County of Wayne v. Hathcock ruling overturned the infamous Poletown decision made by the same court in 1981.

The beauty of our intricately constructed government is not only the elaborate checks and balances within each level (federal, state) of government...but the fact that there ARE distinct levels...each with specific powers.

Fundamental rights should be protected at ALL levels of government...from the local up to the federal....but the Constitution is ultimately the only real law we have...since state laws cannot usurp the Constitution....and the rights enumerated therein.

This is why we are so upset here...even if Utah can regulate around this ruling...a fundamental bulwark in the onslaught agaisnt government encroachment of individual freedoms has been eliminated.

Pity folks who live in corrupt blue states..this ruling makes them second class Americans.

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