2007 Summer, Pg. 40. The Kelo Backlash: Have We Gone Too Far in Restricting the Exercise of Eminent Domain?.

• Author: By Elizabeth E. J. Nickerson

New Hampshire Bar Journal

2007.

2007 Summer, Pg. 40.

The Kelo Backlash: Have We Gone Too Far in Restricting the Exercise of Eminent Domain?

New Hampshire Bar JournalSummer 2007, Volume 48, No. 2Annual Survey of New Hampshire LawThe Kelo Backlash: Have We Gone Too Far in Restricting the Exercise of Eminent Domain?By Elizabeth E. J. NickersonI. Introduction

Winter 2000, Fort Trumbull Area, New London, Connecticut. New London uses its eminent domain power to take private property from homeowners and give it to private developers in order to bring prosperity to a city on the brink of total economic decay.(fn1) Summer 2005, United States Supreme Court, Washington, D.C. In Kelo v. New London, the Court holds New London's exercise of eminent domain was valid under the Fifth Amendment. Winter 2006, Concord, New Hampshire. The legislature amends two statutes and proposes a constitutional amendment, to make sure what happened in New London cannot happen in the Granite State.

Kelo was the culmination of decades of broadening of the government's power of eminent domain. It served as a wake-up call to the states that had no idea how broad the doctrine had become. Public outcry arose, as legislatures scrambled to avoid Kelo-type takings in their states.

New Hampshire was no exception. People in New Hampshire live by the famous words of General John Stark, "Live free or die."(fn2) New Hampshire citizens strongly protect their private property rights. It was quite a shock to many that Justice Souter, New Hampshire resident and land owner, joined the Kelo majority. As a gesture of disapproval towards Justice Souter's vote, a well-known political activist and developer even suggested, with some public support, that Justice Souter's Weare, New Hampshire, home on Everett Lake was ripe for a taking in order to build a hotel.(fn3)

In Kelo's wake, the New Hampshire legislature followed its sister states by passing amendments to its eminent domain procedure(fn4) and redevelopment acts(fn5). In addition, it proposed and adopted a new amendment to the state Constitution limiting what constitutes a public use. Considering that public use analysis in New Hampshire was already more narrowly drawn than federal law, however, these changes were unnecessary.

This article will review federal eminent domain public use analysis. It will then discuss Kelo and its effect on federal case law. The article will distinguish New Hampshire's public use analysis from federal law. Finally, it will discuss the "Kelo backlash" in New Hampshire, focusing on the new constitutional amendment.

Ultimately, this article concludes that since New Hampshire public use analysis would have forestalled Kelo-type takings, the state acted hastily in enacting a new amendment which not only stops Kelo-type takings, but also stops some unequivocally legitimate eminent domain takings.

2. What is Eminent Domain?

   The Founding Fathers, and the Framers of the Constitution, revered personal liberties and private rights. Protecting private property ownership secures liberties and rights because it provides a line in the sand which the government may not cross.(fn6) Eminent domain is one of the limited circumstances where the government may cross that line between private ownership rights and public necessity.(fn7) The power is so strong, that it may only be constitutionally and validly exercised if the land will be put to a public use and the government justly compensates the land owner.(fn8)

   Government's central function is to maintain stability and promote peace.(fn9) In order to carry out these functions, the government requires certain powers.(fn10) Those powers are loosely grouped under the heading of "police powers." Rather than being constitutionally enumerated, these powers are limited by the Constitution.(fn11) Currently there are three such inherent powers: taxation power, police power, and eminent domain power.(fn12) Although each power helps the government to carry out its central functions, each differs in the limitations on its use.

   Taxation power enables government to force citizens to pay its operating expenses. Taxation operates equally on each person, because each citizen bears the burden of paying into the governmental pot in order to pay for expenditures on the public's behalf.(fn13) Eminent domain is different from this power because it operates against particular land owners who happen to stand in the way of a government project.(fn14) Just compensation equalizes the burden of eminent domain because it compensates the land owner for the unequal loss he suffered.(fn15)

   Police power is the power of the government to enact laws which restrict land owners' uses of their property for public health, safety and welfare.(fn16) An example of such a law is one which prohibits septic systems within a certain radius of a well. Such a law restricts a private property owner's use of his land since it may bar him completely from developing it. The government must be able to enact this type of law in order to protect the health and safety of its citizens.(fn17) Such regulations differ from the exercise of eminent domain power because it is assumed that the property owner subject to those regulations is receiving a benefit in exchange for the restriction since it protects his health, safety and well-being.(fn18) Furthermore, no public use is made of the property; police power restrictions act on private use of the property.(fn19)

   Eminent domain is the power of the government to take private property when the public need requires it.(fn20) Unlike taxation and police power, which are obviously necessary for government to function, eminent domain, at first glance, appears unnecessary and intrusive. Consider, however, that without being able to take private property without the consent of the owner, one or two land owners could thwart an entire government project such as a public highway. If the government required consent from each landowner prior to building a highway, the costs would become prohibitive and one holdout owner could stop the entire project.(fn21)

   However, this power, although necessary, is limited by the Constitution so that government may only exercise eminent domain when the land taken is put to a public use, and when the land owner is justly compensated.(fn22) The public use requirement of the Fifth Amendment stops the government from taking private property from one land owner and giving it to another private landowner.(fn23) Public use is a term of art which refers specifically to the Fifth Amendment requirement.

   The term has been subject to considerable judicial scrutiny. Originally, the courts utilized a very narrow definition of public use whereby it meant use by the public. More recently, that narrow definition has been widened, and public use has been held to be synonymous with public purpose or benefit.(fn24) In modern analysis, when the Court is called upon to scrutinize a public use case, it looks first to whether there is a public benefit or purpose gained by the taking, and if so, then it declares a valid public use. Basically, in current Court parlance, public use has come to be interchangeable with public purpose or benefit. Broadening the definition of public use to mean public purpose or benefit allows the government to cross the line between private and public property ownership more often and for less important reasons.

   Federal courts give great deference to the legislative determination that the use to which taken property is being put is public.(fn25) Once a public use has been found, the government may use whatever means it chooses to gain the benefits for which the land has been taken.(fn26) Ancillary private benefits are permissible, even if the land may not be taken for primarily private benefit.(fn27) Takings that will result in future public uses have also been allowed.(fn28)

   Exercise of the eminent domain power requires the involvement of more than one governmental branch.(fn29) First, the legislature decides how a public project will be carried out, and if the project requires land to be taken.(fn30) Generally, the legislature will attempt to buy the land first, and if that is not possible, will then seize it via eminent domain.(fn31) Second, the executive branch will act to negotiate the seizure of the land.(fn32) The legislative plan may be carried out by either a government agent under the executive branch, or by a private party using statutorily delegated eminent domain power.(fn33) When a utility company exercises eminent domain in order to erect utility poles, it is acting under a statutory delegation of eminent domain power. Erection of utility poles is for the public benefit, and since a private utility company has special expertise in erecting utility poles, the legislature may determine that a delegation of eminent domain is appropriate. Finally, the judicial branch may review the validity of a declared public use.(fn34)

3. Eminent Domain, Public Use, and the Supreme Court

   The United States Supreme Court first began interpreting the public use requirement of the Fifth Amendment in the late nineteenth century in Kohl v. United States.(fn35) Prior to this time, the public use requirement had not been under Supreme Court scrutiny because the federal government had not exercised its eminent domain powers.(fn36) In Kohl, Congress enacted a statute delegating power to the Treasury to either purchase or condemn land in Cincinnati for a government...