Understanding The Limits Of Eminent Domain In The Constitution

The power of eminent domain is inherent in the government and may be exercised only through legislation or legislative delegation. The Fifth Amendment to the U.S. Constitution limits this power by stipulating that private property may only be taken for public use with just compensation. This is known as the Takings Clause, which was added to the Constitution in 1791. The amendment does not define just compensation, but American courts have interpreted it as the fair market value of the property. The Takings Clause also does not prohibit the government from interfering with property rights, but it does require just compensation in these cases. In response to the controversial Kelo v. City of New London case in 2005, many states passed laws restricting the government's power of eminent domain, and 12 states amended their constitutions to prevent eminent domain from benefiting private parties.

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The Fifth Amendment's 'Takings Clause'

The Fifth Amendment's Takings Clause, also known as the Just Compensation Clause, is the last clause of the Fifth Amendment to the United States Constitution. Drafted by James Madison, it limits the power of eminent domain by stipulating that private property cannot be taken for public use without "just compensation". The Takings Clause does not define "just compensation", but American courts have generally held that it refers to the fair market value of the property in question.

The Fifth Amendment's Takings Clause was enacted in 1791 as part of the U.S. Constitution's Bill of Rights. It reads: "... nor shall private property be taken for public use, without just compensation." This clause does not grant the government new powers but rather recognises a pre-existing power to take private property for public use, limiting this power to public use and mandating compensation for property owners.

The Fifth Amendment's Takings Clause applies only to the federal government. The Fourteenth Amendment's Due Process Clause offers similar protections against state governments, though the Takings Clause itself does not apply to them. The Fifth Amendment's compensation requirement is not limited to government seizures of real property, and it encompasses regulatory takings, which occur when the government restricts a person's use of their property to the point of constituting a taking.

The Supreme Court has interpreted the Takings Clause in several cases. In Kohl v. United States (1875), the Court held that the government may seize property through eminent domain as long as it provides just compensation to the owner. In Lynch v. United States (1934), the Court ruled that valid contracts of the United States are property, and the rights of private individuals arising from them are protected by the Fifth Amendment. In Armstrong v. United States (1960), the Court affirmed that the Takings Clause is intended to prevent the government from singling out individuals to bear excessive burdens, even for an important public good.

The Takings Clause does have some limitations. For example, the government need not compensate private property owners when requiring them to take reasonable steps to avoid harming public or private property. Additionally, under the "noxious use test" or "Mugler-Hadacheck test", a regulation adopted to protect public health, safety, or welfare is not considered a taking, even if it reduces the property's value.

'Public use' requirements

The Fifth Amendment to the U.S. Constitution, also known as the Takings Clause or the Just Compensation Clause, stipulates that "private property [shall not] be taken for public use, without just compensation". This places a constitutional limit on the government's power of eminent domain, which refers to its ability to take private property and convert it into public use.

The public use requirement is generally viewed as a restriction on the government's eminent domain power. This means that the government cannot use eminent domain unless it is for the benefit of the public. The Fifth Amendment's compensation requirement is not limited to government seizures of real property, and it is extended to the states through the Fourteenth Amendment.

The U.S. Supreme Court first examined federal eminent domain power in 1876 in Kohl v. United States, where it held that the government may seize property through eminent domain, as long as it compensates the owner. The Court affirmed that this power was necessary for the existence of the government. In United States v. Gettysburg Electric Railroad Company, the Court opined that the federal government could condemn property whenever it is necessary or appropriate to use the land in the execution of any of its constitutional powers.

The term "public use" is important, as it differentiates the U.S. Constitution from other constitutions that use the terms "public purpose", "public interest", or "public benefit". The Kelo v. City of New London case in 2005 broadened the government's takings power, as it allowed a taking when the government used eminent domain to seize private property to facilitate private development. The Court justified this by stating that the taking was for a conceivable public purpose, as the community would enjoy the furthering of economic development. This caused significant controversy, and many states passed laws to restrict the government's takings abilities, such as implementing a stricter definition of "public use".

'Just compensation'

The Fifth Amendment of the U.S. Constitution limits the power of eminent domain by stipulating that the government may only exercise this power if they provide "just compensation" to the property owners. This is often referred to as the Takings Clause or the Just Compensation Clause.

The Fifth Amendment reads: "... nor shall private property be taken for public use, without just compensation." This means that whenever the government acquires a property through eminent domain, it has a constitutional responsibility to compensate the property owner for the fair market value of the property. The Fifth Amendment's compensation requirement is not limited to government seizures of real property. Regulatory takings, which occur when the government restricts a person's use of their property to the point of constituting a taking, are also included.

The concept of "just compensation" is not defined by the Takings Clause, but American courts have held that the preferred measure is the "fair market value", i.e., the price that a willing buyer would pay a willing seller in a voluntary transaction. This interpretation ensures that property owners are justly compensated for the loss of their property.

The requirement for "just compensation" was also influenced by historical contexts. Some historians suggest that the limitations on the taking power were inspired by the need to assure compensation to local ranchers when the army secured provisions from them. Similarly, the Third Amendment, enacted in 1791, addressed the quartering of soldiers on private property, requiring landowner consent in peacetime and established law to be followed in wartime, which presumably mandated "just compensation".

The power of eminent domain is inherent in the government and may be delegated to other governmental bodies or private corporations when promoting a valid public purpose. However, it is important to note that not all acquisitions of private property by the state constitute a taking, and in such cases, just compensation is not constitutionally required.

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The 'Mugler-Hadacheck' test

The Mugler-Hadacheck test is derived from two separate cases: Mugler v. Kansas (1887) and Hadacheck v. Sebastian (1915). The former established that "all property in this country is held under the implied obligation that the owner's use of it shall not be injurious to the community". In other words, the government may condemn or destroy private property to prevent the spread of disease or other threats to public health and safety.

The latter case, Hadacheck v. Sebastian, upheld a Los Angeles ordinance prohibiting the operation of brick yards or kilns within certain limits of the city. The owner, Hadacheck, argued that enforcing the ordinance against him violated the Fifth and Fourteenth Amendments of the U.S. Constitution, as it was a taking of property without just compensation. The court ruled that state and local governments have broad authority under their police powers to regulate or prohibit activities that are harmful to the general public, emphasising the importance of upholding the welfare of the community over the economic interests of an individual.

The Mugler-Hadacheck test, therefore, establishes a two-part test to determine whether a regulatory taking has occurred:

• First, the interests of the public require the interference;
• Second, the means are reasonably necessary for the accomplishment of the purpose and are not unduly oppressive of the individual.

This test was derived from Lawton v. Steele (1894), where it was held that state officers properly destroyed fishnets that were banned by state law to preserve certain fisheries from extinction.

The Supreme Court has also laid out a three-part ad hoc test to consider whether a regulatory taking has occurred:

• The economic impact of the regulation on the claimant;
• The extent to which the regulation has interfered with distinct investment-backed expectations;
• The character of the government action.

These factors have been criticised for their lack of clarity and guidance.

State vs federal eminent domain powers

The power of eminent domain is held by both federal and state governments in the United States. Eminent domain refers to the power of the government to take private property and convert it into public use, referred to as a "taking".

The federal power of eminent domain is limited by the grants of power in the Constitution, specifically the Fifth Amendment, which includes the public use requirement under the Takings Clause. The Fifth Amendment mandates that the government may only exercise this power if they provide "'just compensation' to the property owners. The Third Amendment, enacted in 1791, also addresses the quartering of soldiers on private property, requiring the landowner's consent in peacetime and the following of established law in wartime.

The power of eminent domain can be delegated by the state to municipalities, government subdivisions, or private persons/corporations when they are authorized to exercise functions of public character. State laws and constitutions also specify eminent domain procedures and restrictions within their respective territories. For example, in response to the Kelo v. City of New London case, many states passed laws restricting governments' takings abilities, such as implementing stricter definitions of "public use".

While the federal government has the power of eminent domain, it is more often exercised by local and state governments, with funds obtained from the federal government.

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