What is Eminent Domain?

In addition to the Obama win, there was another outcome of the 2012 Elections that caused much debate in the press: Virginia passed a law limiting the power of eminent domain. This led to many people asking, "What is eminent domain?"

Eminent domain is "the power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property." It is an action of the state to seize private property without the owner’s consent by providing just compensation. The rule is normally applied when building highways, train tracks or public property for the benefit of a community and the action is protected by the US Constitution.

In general, to exercise the power of eminent domain, the government must prove that the four elements set forth in the Fifth Amendment are present: (1) private property (2) must be taken (3) for public use (4) and with just compensation. These elements have been interpreted broadly.

However, the United States Supreme Court ruled in 2005 that the Constitution grants the government the right to take private property – homes, businesses, and other property – and sell or give it to another private entity if jobs and taxes could be generated (Kelo versus City of New London, Connecticut, 2005). The eminent domain attorney for the case pressed the high court to vote in favor of economic development projects that create jobs, increases taxes and other revenue, and revitalizes a depressed or blighted area that qualifies as “public use.” The courts ruled that private economic development is a public use under the Fifth Amendment.

The VA amendment makes it so that private property can only be taken for a public use - it cannot be taken and given to another private landowner, even if the transfer would spur economic development. Supporters of the amendment claimed that that changes are necessary because the 2005 ruling gave the government too much power to use eminent domain for private economic development projects. 

Opposers, both Republicans and Democrats alike, were against the amendment as it may force the state government and municipalities to pay more money for what they claim are appropriate uses of eminent domain. The amendment may cost both over tens of millions of dollars for both the local and state governments. Even with the opposition, the amendment passed with flying colors, passing with 75 percent of the voters for the limits on eminent domain - the law will go into effect on Jan 1, 2013.

The 2005 Kelo decision informed the public about eminent domain abuse. Since the decision, 44 other states have made amendments to their constitutions to reduce the government’s power to take private property though eminent domain.

VA to Vote on Eminent Domain Amendment

On November 6 Virginia residents will vote on an amendment to the state's constitution regarding eminent domain and private property rights. The proposed amendment will change the way that the government can seize private property under eminent domain. Any property rights lawyer would agree that the outcome of this election would surely affect the VA economy.

In a 2005 United States Supreme Court case, Kelo versus City of New London, Connecticut, the courts ruled that the US Constitution gives the government the power to take a person’s private property and then sell or give it to another private entity if jobs and taxes can be generated. The VA state government thus could use eminent domain to transfer land from one private owner to another to further that state's economic development.

The question that VA residents will answer in just one week is this: "Shall Section 11 of Article I (Bill of Rights) of the Constitution of Virginia be amended (i) to require that eminent domain only be exercised where the property taken or damaged is for public use and, except for utilities or the elimination of a public nuisance, not where the primary use is for private gain, private benefit, private increasing jobs, increasing tax revenue, or economic development; (ii) to define what is included in just compensation for such taking or damaging of property; and (iii) to prohibit the taking or damaging of more private property than is necessary for the public use?"

In layman's terms, if this amendment is approved, private property can only be taken for a public use - it cannot be taken and given to another private landowner; if property is taken under eminent domain, the landowner will receive fair compensation for the loss of property (with the assistance of a just compensation attorney if need be); and only the absolutely necessary amount of property can be taken.

Unlike most issues, this amendment has drawn bipartisan support for and against the amendment. Critics are concerned that the amendment may be too broad and have unforeseen consequences. They claim that the state's constitution already provides protection for eminent domain, and if the amendment is approved, then state officials will not be able to use eminent domain to take property for economic development purposes. It could force the state to pay more for what they claim are appropriate eminent domain uses and force them to hire an eminent domain lawyer to review the possible outcomes of any proposal.

If approved, the changes would go into affect on January 1, 2013. Virginia is one of the 44 states that examined the issue of private property and limiting eminent domain since the 2005 Kelo decision.