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Eminent Domain

Eminent domain is a U.S. legal term referring to the state's power to take private property from landowners without their consent. The U.S. Constitution does not explicitly refer to eminent domain, but the premise underlying the Fifth Amendment is that the government has that power: “Private property [shall not] be taken for public use, without just compensation.” Recent U.S. Supreme Court interpretations of this clause and the limits it puts on governmental powers pose legal and ethical questions to both the government and the owners of private property, whether businesspeople or homeowners. The original conception of “public use” was that the government should not take private property unless that property was to be used by the public. In addition to this argument that takings for private purposes are unjust and tyrannical, some argue that such takings are inadvisable as they may weaken the concept of private property, weaken the incentive to invest in property, and ultimately weaken the economy. However, current Supreme Court authority allows local legislative bodies to take property from one private owner and give it to another if the taking is for purposes of economic development. In addition to controversies concerning whether public use includes economic development, there are recognized problems concerning what compensation is “just.”

Historical Background

The term eminent domain was originated by Grotius, the 17th-century jurist, who held that the state possessed the power to take or destroy property for the public's benefit but when the state so acted, it was obligated to compensate the injured property owner for his losses. Prior to Grotius, political philosophers such as Plato believed that there was nothing to prevent a state from taking private property in the interest of the polis. James Madison picked up on Grotius's limitation of state power in his drafting of the U.S. Constitution's Fifth Amendment, which imposes two distinct conditions, two checks, on the exercise of eminent domain: “The taking must be for a ‘public use,'” and “just compensation must be paid to the owner.” Originally, this power applied only to the federal government, but the passage of the Fourteenth Amendment expanded its scope to include state and local governments as well.

Public Use

Historically, the courts have employed two interpretations of the public use exception to the bar against governmental takings: a narrow view and a broad view. The narrow view was that property could be taken only if it was to be used by the public in general: the “public purpose” line of cases. So, for example, in the colonial era, one constructing a mill (the equivalent of a public utility) under the Mill Acts was liable only for limited damages if his mill caused flooding to upstream neighbors: “Apparently, the contribution of water power to the general well-being and advancement of the public trumped the rights of the private landowner.” In the 19th century, many early decisions held that governments lacked the power to permit the nonconsensual taking of private property for private use, based on natural law theories or state constitutional language. They held that actual control by the government or use by the public was essential to justifying a taking. However, this “use by the public” standard, which was adopted by the majority of the states, became difficult to apply because of the loopholes, limitations, and evasions created by 19thcentury state and local courts that wanted to encourage industrial development.

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