▪ Eminent Domain: The Offer You Can’t Refuse

An earlier version of this commentary was published in the Honolulu Advertiser

Do you mean to tell me, Katie Scarlett O'Hara, that Tara, that land, doesn't mean anything to you? Why, land is the only thing in the world worth working for, worth fighting for, worth dying for, because it's the only thing that lasts!

– “Gone With the Wind”

Maybe not. In June 2005, the U.S. Supreme Court approved the radically un-American notion that you own your property only as long as someone more influential doesn’t want it.

In Kelo v. City of New London, the Court allowed a Connecticut redevelopment agency to use eminent domain to seize perfectly good homes in a working-class neighborhood and turn them over to a private developer. The homes will be demolished, replaced by a fashionable hotel, health club and marina to support a neighboring facility for the pharmaceutical company, Pfizer.

Eminent domain is the government’s power to confiscate private property against the will of the property owner. Using eminent domain, completely innocent families can be forced from their homesteads and established businesses shut down against their will. Incredibly, a property owner is nearly powerless to prevent it. It is, quite literally, the “offer you can’t refuse,” and it is most often the elderly, the poor, minorities, and others who lack money and political pull whose property ends up targeted for eminent domain.

This power is exercised not only by elected officials, but also by those who have no incentive to listen to the voice of the voters, such as redevelopment agencies, utility companies, and even private developers. Once they set their sights on property, the mere threat of eminent domain is usually enough to make an unwilling owner accept a “Godfather” offer – agree to our fire sale terms or we’ll have the government take your land.

Scarlett O’Hara thankfully never met Don Corleone.

To limit this potential for abuse, the U.S. Constitution’s Fifth Amendment permits eminent domain only if the owner receives “just compensation” and only if the property is taken for “public use.”

Common sense and tradition tell us that “public” uses are schools, roads, parks, and military bases, while hotels, health clubs and corporate parks are private uses.

But in the Kelo case, the redevelopment agency hypothesized that even though the homeowners’ property ended up in a developer’s hands, evicting the homeowners and upscaling the neighborhood would increase the city’s tax revenues and “create jobs.” And the mere promise of incidental public benefit, the Court agreed, is all the U.S. Constitution requires for “public use.”

If economically modest but still viable homes and small businesses can be bulldozed whenever politicians and their friends can put your property to more grandiose use, is it now open season on property owners?

Not quite, and state and county bureaucrats and those eyeing property still must exercise restraint for two reasons.

First, the Court left open the possibility that a taking of property which results from a bogus process will not pass “public use” scrutiny. Property owners remain free to show where claims of “public use” have been unduly influenced by private interests. “A court . . . should strike down a taking that, by a clear showing, is intended to favor a particular private party, with only incidental or pretextual public benefits.” Backroom deals to take another’s property are not in the public interest.

Second, Kelo at best only reduces federal involvement in the equation. The U.S. Constitution sets minimum standards, and state constitutions and the state courts which enforce them, remain free to provide greater protection to homeowners and others threatened with eminent domain.

And many do just that. Six states have already recognized their citizens have more rights under their constitutions. Last year, for example, the Michigan Supreme Court struck down an attempted taking justified by economic development. Property owners in Michigan have more rights than property owners in Connecticut.

So Kelo simply shifts the focus away from federal law and federal courts. State constitutions and state courts are now the primary forums to protect property rights from eminent domain abuse.

The stage is already set. Hawaii’s Constitution requires “public use,” and when applying that restriction, Hawaii state courts are not bound by restrictive federal interpretations of the U.S. Constitution. The U.S. Supreme Court’s failure in Kelo presents Hawaii courts with the opportunity to join Michigan, Arizona, Washington, and other states and enforce our own “public use” requirement in the manner plainly intended.

But individual rights such as property should not be dependent upon a court’s interpretation, and the ultimate power to prevent eminent domain abuse remains with the people. Local officials must understand that the type of action taken by New London’s redevelopment agency is not acceptable to the people of Hawaii. And if officials do not respond, the people have the power to clarify our state constitution to expressly prohibit eminent domain from being used to take private property from one owner and give it to another.

Home ownership, and the ability to protect your property from forced sale to the highest bidder under government cover is an issue that everyone – regardless of means or political persuasion – can and should get behind.