Interesting Missouri Supreme Court Decision Interpreting the State’s Post-Kelo Eminent Domain Reform Law

The Supreme Court of Missouri recently issued Missouri Ex. Rel. Jackson v. Dolan, an important decision interpreting the state’s post-Kelo eminent domain reform law, which bans the use of eminent domain to condemn property for “solely economic development purposes.” As Robert Thomas points out at the Inverse Condemnation Blog, the ruling gives the statute more bite in constraining eminent domain than most experts (myself included) expected it to have.

In the aftermath of the federal Supreme Court’s unpopular decision in Kelo v. City of New London, which ruled that the federal constitution permits economic development takings, 44 states adopted eminent domain reform laws that supposedly restricted such condemnations. Unfortunately, many of the new laws do little to actually constrain the use of eminent domain authority, often allowing the same old takings to continue under other names. Most commentators believed that the Missouri law was one such ineffectual reform, because, as Thomas explains, “it would seem that all a condemnor need do is throw in another reason — in addition to economic development — and it would be off the hook.” As he points out, courts in other states that ban takings “solely” or “primarily” for economic development have accepted such circumvention. In Jackson, however, the Missouri Supreme Court struck down a condemnation that, in addition to promoting economic development, would also supposedly enhance port facilities and “improve” river commerce. The Court ruled that these alternative rationales were not genuinely different from economic development because “”[t]he record demonstrates that the only manner in which the taking will ‘improve river commerce’ is by drawing more economic development into the area” and that any enhancement of port facilities would be of value only because it too promotes development.

Thomas is right that this ruling could potentially constrain economic development takings in Missouri, since it looks like condemning authorities will only be able to take property if they come up with a rationale more distinct from promoting development than the Port Authority in this case. However, The Court did emphasize that the statute “only prohibits a taking if the sole purpose for the taking is economic development and no other purpose supports the taking.” Thus, even a fairly modest indication of some other purpose might be enough to justify a condemnation. For example, the Court noted that the taking would have been upheld if it “improved” river commerce by “making such commerce easier to conduct.” It is possible, therefore, that Missouri condemning authorities can still justify economic development takings by linking them to other non-“development” rationales. They might even be able to claim that statute advances those other purposes by promoting economic development itself (for example, increased economic development might lead to reduced crime or improved infrastructure). Future state court cases will likely determine how hard this will be. Regardless, this decision definitely makes condemnors’ task harder. As the state supreme court puts it, “[t]hough [the post-Kelo reform law] may make a taking more difficult to effectuate, that difficulty is the intended result of the statute, the primary purpose of which was to limit the opportunities for which a condemning authority may use the power of eminent domain.”

UPDATE: I have slightly expanded the last paragraph of this post.