Here We Go Again - Governments Just Can’t Live within Eminent Domain Rules

Some government officials still haven’t gotten the message from the revolt that followed the Supreme Court’s overreaching Kelo eminent domain decision. Kelo, you may recall, puffed up eminent domain to allow governments to take private property for public benefit and economic development, not just for public use like a road.  So, in New London, Connecticut, private homes were taken and transferred to another private owner for a medical research lab that was never built, all for the sake of economic development.  After Kelo, 45 states enacted some kind of reform measure to rein in the use of eminent domain for economic purposes.

Rapacious Baltimore didn’t get the memo, however.  In March, it filed a lawsuit to condemn the Preakness Triple Crown horse race - not just the Pimlico race track where the race is run, but the horse race itself. 

Now comes the federal government which wants to get away without paying a dime for an airport terminal in Texas that was built and maintained with private investor funds and a lower court said was worth more than $133 million.  The facts in the Love Terminal case [Love Terminal Partners v. United States] are convoluted, but the important point for present purposes is that the government says the terminal, now destroyed, was worthless because it had no tenants and was not earning a positive cash flow.  Therefore, the government says - and the appeals court in this case agreed - no just compensation for the exercise of eminent domain is due.

However, by that logic, if the government decides to take any church or synagogue in the land - or any idle farm in the country waiting for a new owner to come work it - the government can get away with seizing the property and refusing to pay just compensation when these things clearly have value.  Places of worship may not ever turn a profit, but they clearly have monetary value.  Commercial assets may not be making a profit at the time the government decides to seize them, but they still have value.  Doesn’t getting them for free sound too good to be true?  More importantly, wouldn’t that be exactly the wrong signal to send to what is supposed to be limited government whose job it is to protect our rights, not line its own pockets at our expense? 

There was a perfectly good doctrine in eminent domain law in use for decades - a property is worth what a willing buyer would pay in cash to a willing seller for it.  There is no good reason I can see to replace it with a new doctrine that essentially says ‘we can take your property for free if it’s not earning anything at the moment, even if we’re the ones who caused your revenue to dry up.’

The Supreme Court has not yet decided whether to take the case, but it should.  There’s a lot at stake here.