12.3 Limitations on Power

• Library: The Virginia Lawyer: A Deskbook for Practitioners (Virginia CLE) (2018 Ed.)

12.3 LIMITATIONS ON POWER

12.301 Limitations on Public Use. The legislature has identified many government activities for which private property may be taken to facilitate public use for a public purpose. ¹⁸ The private property must be needed for a legitimate public purpose.

Constitutional questions arise when a private benefit and use commingles with the public use and benefit. In Rudee Inlet Authority v. Bastian, ¹⁹ the Supreme Court of Virginia stated that the public interest must dominate the private gain to make a taking constitutional. ²⁰ In Phillips v. Foster, ²¹ the court struck down the condemnation of an easement across the plaintiff's land that was for the purpose of draining his neighbor's property, finding that "[t]he salient consideration is not whether a public benefit results, but whether a public use is predominant." ²²

The public use implies a possession, occupation and enjoyment of the land by the public at large, or by public agencies; and the due protection to the rights of private property will preclude the government from seizing it in the hands of the owner and turning it over to another on vague

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grounds of public benefit to spring from a more profitable use to which the latter may devote it. ²³

In its landmark eminent domain case, Kelo v. City of New London, ²⁴ the United States Supreme Court set forth some parameters on how the Fifth Amendment limits taking property for economic development within the meaning of the term "public use" in the Fifth Amendment and applied to the states through the Fourteenth Amendment and 42 U.S.C. § 1983. The Court stated that condemnors are "forbidden from taking [an owner's] land for the purpose of conferring a private benefit on a particular private party." ²⁵ A condemnor also may not take property "to benefit a particular class of identifiable individuals." ²⁶ Moreover, the condemnor is not "allowed to take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit." ²⁷

In Virginia the local agencies responsible for economic and industrial development are typically industrial and economic development authorities created by localities under the Industrial Development and Revenue Bond Act. ²⁸ The Virginia Code does not give authorities the power of eminent domain to fulfill their purposes. Nonetheless, government agencies with the power of condemnation, such as localities and the Commonwealth Transportation Commissioner, may condemn property and transfer title in the property to industrial development authorities. ²⁹

Virginia Supreme Court decisions seem to indicate a very limited role for the courts in scrutinizing public purpose. In Ottofaro v. City of Hampton, ³⁰ the City of Hampton (the City) condemned the Ottofaros' property for a retail development off Route 64 that included the Bass Pro Shop. At the time, the City was statutorily authorized to use state highway department condemnation procedures, which further permitted the City to take not only a portion of the Ottofaros' property needed for the road but also the residue that the

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Ottofaros wanted to keep. The City then transferred the residue involuntarily taken from the Ottofaros to the Hampton Industrial Development Authority, which in turn gave a long-term lease on the property to a private developer. The court in Ottofaro approved these transactions.

In Hoffman Family, L.L.C. v. City of Alexandria, ³¹ the majority upheld the condemnation of storm sewer easements, which benefited a private developer, stating, "if the record supports a conclusion that the property proposed for condemnation will be a public use acquired for a public purpose, the fact that neighboring property owners will benefit from that use is irrelevant." ³² In a dissenting opinion, Chief Justice Hassell noted the majority ruling "renders meaningful judicial review impossible." ³³

After lengthy debate and consideration of several competing proposals, including a constitutional amendment, the General Assembly accepted the invitation by the Supreme Court in Kelo to limit eminent domain and enacted Section 1-219.1 of the Virginia Code. This section addresses issues raised by Kelo, C&C Real Estate, and Hoffman...