UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 9, No. 1FALL 1985
NOTES
Constitutional Review of State Eminent Domain Legislation: Hawaii Housing Authority v. Midkiff
Stuart P. Kastner
I. Introduction
The State of Hawaii has a unique land ownership problem directly affecting many of the state's homeowners: a handful of people own a large percentage of the land available for residential housing.(fn1) Consequently, a significant proportion of homeowners rent, under long-term leases, the land on which their homes are built.(fn2)
In 1967 the Hawaii legislature took action to break up this concentration of ownership by enacting the Land Reform Act.(fn3) The legislature declared that such ownership was a threat to the health, safety, and welfare of Hawaii's citizens because of its significant contribution to the spiraling inflation of land values.(fn4) To alleviate the problem,(fn5) the Act authorized a redistribution of the fees simple from the few landowner/lessors to the many homeowner/lessees, using the power of eminent domain.(fn6)
Since, at first blush, it appeared that the State of Hawaii was merely transferring private property from one private person to another(fn7) in defiance of the public use requirement of eminent domain,(fn8) serious doubts were raised as to the constitutionality of the Act.(fn9) The United States Supreme Court, however, had "no trouble concluding" that the Act was a constitutional exercise of the eminent domain power.(fn10)
The Court gave complete deference to the Hawaii legislature's determination of public use(fn11) by classifying the Act as ordinary socio-economic legislation enacted pursuant to the state's police power.(fn12) By focusing on the breadth of a state's police power and on the deferential standard of review, the Court successfully avoided an independent examination of public use,(fn13) a traditional judicial function.(fn14)
This Note will demonstrate that the Supreme Court's deference to the Hawaii legislature's public use determination was an unwarranted departure from case precedent and that the Court should have decided the case on the merits.(fn15) This Note also will argue that the minimum rationality standard generally used to review socio-economic legislation is inappropriate in state eminent domain cases because only the state's power is considered, while the interests of the condemnees are ignored.(fn16)
II. The Doctrine of Public Use
The takings authorized by the Hawaii Land Reform Act are unprecedented; in few legislative exercises of the eminent domain power has the public benefit been so tenuous.(fn17) The cases that have been the most controversial and that have provided the more expansive readings of the public use doctrine provide little support for the Act.(fn18) A brief discussion of these cases followed by a synthesis of their principles will demonstrate this point.
New York City Housing Authority v. Muller,(fn19) the first of the early twentieth century slum clearance cases, established that a state could enact legislation to benefit the broad public health, safety, and welfare of its citizens by exercising its power of eminent domain.(fn20) The Muller court reasoned that decreasing the juvenile delinquency, crime, and disease that slum conditions generated served to confer a broad public benefit that satisfied the public use requirement; thus, eminent domain could very properly be used for such purposes.(fn21) The court equated the concepts of police power, eminent domain, and taxation as each being designed to protect the health, safety, and general welfare of the public.(fn22) Eminent domain could be used for slum clearance because "the legitimacy of the purpose as a whole is the criterion, not the intended use of the particular property taken."(fn23)
The case of United States ex rel. Tennessee Valley Authority v. Welch(fn24) expanded the scope of takings that could be justified by any given public purpose. In Welch, the Tennessee Valley Authority (TVA) was authorized to condemn land in the development of a reservoir project. The subsequent flooding of the land destroyed the only highway affording a reasonable means of access to a large mountainous area of land lying between the reservoir and a national park. Although a new road could have been built, the cost would have been disproportionate to the value to the public. The TVA then decided to condemn this mountainous area and add it to the national park.(fn25) Although condemning the area had little to do with the public purposes declared in the reservoir project,(fn26) the Court justified the taking with an "area approach" theory. "We view the entire transaction as a single integrated effort on the part of T.V.A. to carry on its congressionally authorized functions."(fn27)
Berman v. Parker(fn28) furnishes another example of the breadth allowed a taking under a given public purpose. In Berman, a blighted community was condemned pursuant to the District of Columbia Redevelopment Act of 1945.(fn29) Appellant's department store stood within this general condemned area. This store suffered from none of the ills associated with substandard housing and was to be redeveloped, along with the rest of the community, by private enterprise. Despite appellant's assertion that his land was being taken contrary to the fifth amendment,(fn30) the Court upheld the taking.The concept of the public welfare is broad and inclusive . . . . The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled.(fn31)
The Berman case is significant because it was the first case to expressly define the public use requirement of eminent domain in terms of the police power.(fn32) Conceding the vast reach of the police power, the Court stated that "[o]nce the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear. For the power of eminent domain is merely the means to the end."(fn33)
A final significant case is Puerto Rico v. Eastern Sugar Assocs.(fn34) In Eastern Sugar Associates, the Puerto Rican legislature used its power of eminent domain to preserve the Islands' sugar cane industry. The sugar cane industry constituted nearly the entire economy of Puerto Rico and was the Islands' basic agricultural crop. Usable land was in short supply, however, much of it being held by a corporative latifundia.(fn35) When the federal government compounded the land shortage problem by condemning a substantial part of the best agricultural land for naval purposes, the legislature responded by enacting the Land Law of Puerto Rico(fn36) and the Vieques Act.(fn37)
Essentially, the two enactments effected a break up of the corporative latifundia and provided for the following: (1) homesteads for the agregados(fn38) and slum dwellers; (2) proportional-profit farms to aid the agregados; (3) subsistence farms for more skilled farmers; and (4) renewal of the sugar cane industry on the Island of Vieques, the island from which the federal government took land.(fn39) The Puerto Rican legislature considered the breakup of the corporative latifundia essential to the continued prosperity of the community.(fn40)
These cases illustrate three important points. First, because the scope of public use is defined by the police power and because the police power is a concept that escapes definition,(fn41) the power of a state to condemn appears virtually unlimited.
Second, it is immaterial that a private entity, rather than a public entity, takes possession of and uses the condemned land. So long as the benefit to the private entity results in some benefit to the public, the taking will be upheld.(fn42) In each of these cases, with the exception of one,(fn43) the taking directly eradicated some tangible harm to the economy and to the society. Thus, while private interests were often the ultimate owners and occupiers of the condemned land, the private benefit was incidental to the direct public benefit.(fn44)
Third, any takings that did not directly eradicate a detrimental condition could be justified by the area approach the legislatures took to condemnation.(fn45) As the Court stated in Berman, [i]t was important to redesign the whole area so as to eliminate the conditions that cause slums . . . . It was believed that the piecemeal approach, the removal of individual structures that were offensive, would be only a palliative. The entire area needed redesigning so that a balanced, integrated plan could be developed . . . .(fn46)
In comparison, the Hawaii Land Reform Act stands upon unsteady ground. The primary beneficiaries of the Act are the lessees, who obtain the fee simple to the land on which their homes are built.(fn47) The public benefit declared by the legislature is not accomplished directly by the transfer of the fee; instead it is accomplished indirectly by the predicted future decreases in the overall rate of inflation of the Hawaiian economy.(fn48) Further, the takings cannot be justified by the area approach. In both Berman and Welch the scope of the taking was contested, but the public purpose was not.(fn49) In Hawaii Housing Authority v. Midkiff, however, the public purpose...
