Eminent domain due process.

Author:Hudson, D. Zachary
 
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NOTE CONTENTS INTRODUCTION I. THE CURRENT STATE OF EMINENT DOMAIN LAW A. State Eminent Domain Statutes 1. Providing Full Process Rights 2. The Complete Abrogation of Procedural Rights 3. Steering the Middle Course B. State Eminent Domain Case Law II. THE EVOLVING RELATIONSHIP OF EMINENT DOMAIN AND DUE PROCESS A. The Early History of Eminent Domain B. The Declaration of Taking Act and the Catlin Case 1. Challenging the Taking Act 2. Disposing of the Catlin Problem C. The Due Process Revolution D. Modern Property and Due Process Rulings III. MODERN DUE PROCESS AND EMINENT DOMAIN A. What Process Is Due B. The Content of Due Process C. The Consequences of Due Process IV. AN EXCEPTION TO MODERN DUE PROCESS ANALYSIS CONCLUSION APPENDIX INTRODUCTION

In the wake of the Supreme Court's decision in Kelo v. City of New London, (1) state legislatures, academics, and activists all expressed their concern for the status of property rights. In the face of the ever impending threat of the government's eminent domain power, Kelo seemed to stand for the sweeping proposition that private property could be condemned by a public entity whenever such an action was economically beneficial. A swell of statutes and scholarship quickly followed, suggesting that additional procedures should be put in place to curb potential governmental abuse of the takings power. On the legislative front, many states altered their eminent domain statutes or amended their constitutions to ensure that economic development could not serve as a legitimate basis for exercising the state's eminent domain power. (2) Some commentators proposed that states impose additional transparency requirements to ensure that the processes used to determine whether to exercise the eminent domain power were open to the public. (3) Others suggested that local government actors voluntarily adopt rules to make the exercise of the eminent domain power procedurally more difficult. (4) Still others have argued that regardless of what level of government requires it, additional process is necessary so that the judiciary can provide a check on the use of eminent domain. (5)

Whatever one makes of these legislative reforms and scholarly suggestions to afford greater procedural protections against the use of the eminent domain power, at an absolute minimum, the Due Process Clause should guarantee that landowners receive notice and an opportunity for some sort of hearing on the legality of a taking before land is actually taken. Despite the fact that the Constitution clearly states that property cannot be taken without due process, neither federal nor state case law uniformly recognizes the necessity of applying basic procedural protections in the eminent domain context. This fact has led many state courts to arrive at a conclusion seemingly contrary to the plain text of the Constitution and counterintuitive to modern conceptions of property and procedural rights: due process does not apply to state eminent domain actions.

The troubling implications of this faulty legal conclusion are made plain by a recent eminent domain action in the state of Rhode Island. In 1986, the Rhode Island Department of Transportation (RIDOT) and The Parking Company (TPC) entered into an agreement giving TPC the exclusive rights to operate parking facilities at the T.F. Green International Airport (Green International) in exchange for TPC's construction of a new parking garage (Garage 1). (6) During the 1990s, in response to robust economic growth in the Providence area, RIDOT turned over control of its airport services to a subsidiary of the Rhode Island Economic Development Corporation (EDC), which decided to build a second parking garage at Green International (Garage 2). In response to increased demand for valet parking, EDC and TPC entered into an additional agreement specifying that the lower portions of Garage 1 would be used to provide valet service.

The terrorist attacks of September 11, 2001 occurred shortly after the agreement was implemented. This tragedy significantly affected the air travel industry, including the demand for parking at the nation's airports. (7) In response to declining profits, TPC notified EDC that unless some sort of arrangement could be worked out, TPC would be forced to lower rates at its parking structure, Garage 1, effectively initiating a price war with state-owned Garage 2. When negotiations with TPC about rate-setting broke down, EDC began to consider other actions to address concerns about declining revenues and took steps to attempt to regain profitability. As an initial step, EDC sought to terminate valet parking services being provided by TPC. However, these negotiations also failed, and the relationship between TPC and EDC began to deteriorate rapidly. (8)

On July 26, 2004, in accordance with Rhode Island law delegating eminent domain authority to EDC, the corporation's chairman issued a declaration of taking of TPC's property interest in Garage 1. (9) In order to effectuate the taking, EDC was required to file a declaration with the county superior court along with documentation explaining the value of the property. As Rhode Island law does not require notice to a property owner whose land is the subject of an eminent domain proceeding, the order condemning Garage 1 was issued without any involvement by TPC or any serious consideration of the appropriateness of that action; the simple act of filing the declaration completed the taking. (10) As a result of this proceeding, TPC was dispossessed of all property rights in Garage 1. The operators of TPC did not become aware of the condemnation of their property until they arrived at the garage the day after the court order was issued to find state employees in control of the facility.

Facing these facts, the Rhode Island Supreme Court was forced to address whether a property owner was entitled to prior notice of an eminent domain condemnation action, and a hearing on whether the taking was for a public use, before being deprived of her property. (11) Though the court held that the EDC's action was inappropriate because it was motivated by increasing revenues and not in pursuit of a legitimate public purpose, in reaching that decision it outlined the relationship between due process guarantees and the state's eminent domain power under Rhode Island law. The court stated that "[t]he right to a prior hearing attaches only to the deprivation of an interest encompassed within the [F]ourteenth [A]mendment.... However, the right to a hearing before the taking of private property by eminent domain is not a right encompassed within the [F]ourteenth [A]mendment." (12) Under Rhode Island law, the person whose property is the object of an eminent domain action is not entitled to notice or any meaningful judicial proceeding before the taking of her property occurs. (13)

This Note argues that eminent domain laws like Rhode Island's violate the due process rights of property owners. At a minimum, the constitutional guarantees of the Fifth and Fourteenth Amendments should ensure that property owners receive notice and some judicial determination of the validity of a taking before title to land is actually transferred. Issues beyond the scope of these basic constitutional guarantees can be postponed to sometime after the taking is effectuated without running afoul of due process. In making this argument, the goals of this Note are both descriptive and prescriptive--to describe the current state of the law, how the law came to be as it is, and what shape the law should take moving forward. The discussion begins by cataloging the existing eminent domain law in the fifty states and discussing the status of the procedural protections provided by those laws. This analysis reveals that several states have refused to recognize the application of due process principles to eminent domain actions. The Note then explores the historical relationship between due process and property rights, suggesting how the split between eminent domain and due process doctrine evolved. The flawed relationship of eminent domain and due process is traced from the Founding, through the jurisprudential revolution of the 1970s, to the present day, demonstrating that there is no reason rooted in logic or precedent to fail to provide due process protections in the eminent domain context. After establishing the appropriateness of applying modern due process principles in the eminent domain context, the focus of the inquiry shifts to demonstrate what due process demands. This conversation explains what process is due, what the content and form of that process should be, and what the likely effects of recognizing due process rights in the eminent domain context are. Finally, the possibility that eminent domain enjoys some sort of special historical status that exempts it from traditional due process analysis is discussed. Even under this formulation of the law, history and tradition favor the provision of prior process.

  1. THE CURRENT STATE OF EMINENT DOMAIN LAW

    The Supreme Court has never fully defined the due process rights of a property owner faced with an eminent domain action undertaken by a government--local, state, or federal. What little Court precedent there is directly bearing on the subject of eminent domain and procedural rights serves only to confuse the issue. (14) The Court's rulings dealing with the interaction between property rights and due process rights more generally, however, suggest that prior notice and some prior determination of the appropriateness of the state action are warranted prior to a taking. (15) Before exploring the basis of the legal disconnect between eminent domain and due process law at the constitutional level, it is useful to examine the range of existing eminent domain statutes to provide context to the legal analysis to follow. Numerous state eminent domain laws provide full due process rights to landowners...

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