The U.S. government has a power so potent and fearful that many 18th and 19th century jurists and political philosophers referred to it as “the despotic power.”

It was viewed as a sometimes-necessary but always-to-be-feared tool of governance. Its exercise was viewed with extreme suspicion and had to be extensively justified. Its judicious use was (and is) critical to urban development, the growth of railroads, canals, highways, pipelines, and utilities. It can allow public development to prevail over the unjustified obstruction of holdout landowners.

And it can easily destroy. It can destroy homes. It can destroy family businesses and farms. It can destroy cherished memories. And it can destroy family legacies that span generations.

It is a governmental power both implied and restricted in the 5th Amendment to the Constitution of the United States.

It is the power of eminent domain.

Eminent Domain Explained

When a government wishes to build a road from one place to another, it’s likely that the road will need to occupy at least some land that is privately-owned. The government may make an offer to purchase this land from the owners, and this offer may be accepted or not. If there is some leeway in the routing of the road, it may be possible to route around owners who do not wish to sell. If this would make the road infeasible to build or use, however, the government has the ability to seize the desired land without consent.

From a legal standpoint, this is because most owned property in the United States is held in “fee simple”. This means, roughly, that title to the property is established by authority of the local or county government and granted to the owner. The title is persistent; that is, it can be transferred to the owner’s heirs after death or sold to someone else given the mechanisms established for the sale of real property in that area.

But the fee simple title to property, being a construct of the state, is not absolute and can be forfeited in several ways. An obvious way is to fail to pay property taxes. The state can initiate proceedings to revoke title to the property in this case. Another way is through the power of eminent domain, wherein the government decides it needs the property and determines to take it whether the owner wants to sell or not.

Constitutional Safeguards and Early Attitudes

One of the principal reasons the Founders established the current Constitutional government was to protect and preserve private property from arbitrary seizure. Madison put it as bluntly as possible in Federalist 54:

Government is instituted no less for protection of the property, than of the persons, of individuals.

Madison’s views on the relationship between property and liberty were strongly influenced by the British libertarian John Locke, who wrote in his second treatise on government:

The great and chief end, therefore, of men uniting into commonwealths, and putting themselves under government, is the preservation of their property…

This fundamental motivation — to protect American property from the whims and depredations of the British king and Parliament and thereby secure American liberty and a sovereign American government — gets short shrift from most treatments of history in school, which tend to instead focus on the surface rhetoric of the Stamp Act protests and the Boston Tea Party and go on to characterize the Revolution as a glorified tax revolt.

Rising from this desire to protect property rights, the Founders established specific protections for private property in the Bill of Rights. The 5th Amendment, in particular, reads:

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.

Note that “due process” is required for any seizure of property. Seizure under color of eminent domain must be for “public use” and the seizure must be counterbalanced with “just compensation” for the value of the property seized. At first these rights applied to federal action only, but with the passage of the 14th Amendment state and local governments were constrained by these 5th Amendment protections as well.

The earliest Supreme Court decisions that reference the seizure of private property go out of their way to stress the terrible nature of eminent domain and the countervailing imperative to protect private property. In the case of Vanhorne’s Lessee v. Dorrance, in 1795, Justice Paterson wrote the following:

The despotic power, as it is aptly called by some writers, of taking private property, when state necessity requires, exists in every government; the existence of such power is necessary; government could not subsist without it; and if this be the case, it cannot be lodged any where with so much safety as with the Legislature. The presumption is, that they will not call it into exercise except in urgent cases, or cases of the first necessity. There is force in this reasoning. It is, however, difficult to form a case, in which the necessity of a state can be of such a nature, as to authorize or excuse the seizing of landed property belonging to one citizen, and giving it to another citizen. It is immaterial to the state, in which of its citizens the land is vested; but it is of primary importance, that, when vested, it should be secured, and the proprietor protected in the enjoyment of it. The constitution encircles, and renders it an holy thing.

Chief Justice Samuel Chase wrote, in Calder v. Bull, 1798:

…[a] law that takes property from A, and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with such powers; and, therefore, it cannot be presumed that they have done it.

The Slippery Slope of Abuse

Over the years, however, shifts in prevailing political philosophy have eroded away many of the inhibitions against the freer use of eminent domain. Both “public use” and “just compensation” have been redefined to greatly expand the number of cases where eminent domain can be used, to the point that the very abuse condemned by Justices Paterson and Chase in the quotes above — the use of eminent domain by the state to take private property from one citizen and give it to another — is now one of its most common uses. So-called “big-box” retailers, such as Wal-Mart, Costco, Target, Lowe’s, Best Buy, and Home Depot to name a few, routinely solicit communities to use eminent domain to provide property for them to build stores upon, often over the objections of the citizens of the community.

The “public use” rationale for these seizures is that the new businesses will increase the tax base of the community, fueling growth. A series of increasingly brazen recent state court decisions, culminating in the recent Kelo decision by the Supreme Court, has legitimized this rationale and cannot but serve to embolden corporate developers to aggressively pursue expansion plans with the power of eminent domain on their side. As Justices Thomas and O’Connor noted in their dissents, legitimizing property transfers with the sole rationale of increased tax revenue dilutes the words “public use” in the Takings Clause to the point of meaninglessness.

A mere desire for growth or additional tax revenue should never be sufficient to justify seizure of a citizen’s private property. To justify use of the eminent domain power, a government should be required to demonstrate a compelling need and a direct, public use.

“Just compensation” has also taken its share of abuse. As this excellent paper from the Cato Institute notes, court decisions have held that only actual confiscations of title trigger the requirement for just compensation. As the paper indicates:

That view enables government to extinguish nearly all uses through regulation—and hence to regulate nearly all value out of property—yet escape the compensation requirement because the all but empty title remains with the owner. And it would allow a government to take 90 percent of the value in year one, then come back a year later and take title for a dime on the dollar.

Since just compensation is generally pegged to an assessed market value, the identity of the assessor becomes relevant as well. There have been several cases where the developer who was to receive the seized property was involved in the assessment process. Several sites on the web, such as Eminent Domain Watch, Castle Coalition, and Coalition for Redevelopment Reform are serving as watchdogs on these abuses. The Freeman, an online magazine affiliated with the Foundation for Economic Education, has an essay entitled “The Blight of Eminent Domain” that details some of these cases of self-dealing and conflict of interest. Here’s one excerpt:

In one attempted use of eminent domain in Anaheim, the company doing the appraisal had a financial interest in the final project. Wouldn’t that be great if you could appraise a property that you wanted to buy?

Time for a Locke-Down on Eminent Domain Abuse

‘Tis a Mistake to think this Fault [tyranny] is proper only to Monarchies; other Forms of Government are liable to it, as well as that. For where-ever the Power that is put in any hands for the Government of the People, and the Preservation of their Properties, is applied to other ends, and made use of to impoverish, harass, or subdue them to the Arbitrary and Irregular Commands of those that have it: There it presently becomes Tyranny, whether those that thus use it are one or many. — John Locke

The Kelo decision has struck a resonant chord with many people because it lays bare the ugly truth about how eminent domain is applied and what its effects are on citizens like themselves. In few other places is it nakedly clear what an overwhelming power of oppression that corporate money can produce when coupled with governmental compulsion. The 80-year-old victim of this particular seizure is sympathetic. More than this, however, she is almost the archetype of the dutiful citizen; if it could happen to her, it could happen to anyone, and people know that in their bones and fear it.

There needs to be a strong, immediate reaction against the legitimization of eminent domain abuse and the true threat to private property rights that it represents. There appears to be some movement in certain municipalities and state legislatures (Texas is one) to expressly tighten up the requirements for use of seizure. State legislative action, up to and including amending state constitutions, is probably the best mechanism to redress this issue, but it won’t happen unless there is grassroots pressure from constituents to force the issue. Government is notoriously bad at limiting its power or growth unless there is a specific, strong pressure to do so. The backlash from the Kelo decision could provide that pressure if enough people act.

There are organizations that are already fighting this fight and have been since well before the Kelo decision. The Cato Institute (linked above) has dealt with this issue many times in the past. Institute for Justice, a libertarian public-interest law firm, has litigated many property-rights cases, including the Kelo case. They could always use additional help.

It should also be heartening to remember that this battle not only can be won, but has been won in the past, by the Founders. It can be won again.

We in the Midwest (and South, for that matter), are no strangers to the abuse of eminent domain. But now that the decision has been handed down from the Supreme Court of the United States that private property can be seized by governments for transfer to private developers, it looks like we are going to have some exalted company. Freestar Media is in the planning stages of a project for a hotel to be built on Supreme Court Justice David Souter’s property in Connecticut.