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Texas Supreme Court Forbids Taking of Land for Private Pipelines

By on September 3, 2011 6:33 pm in Blight, Eminent Domain, Property Rights

In a potentially important recent decision, Texas Rice Land Partners v. Denbury Green Pipeline the Texas Supreme Court has invalidated the use of eminent domain for a private pipeline to be owned by an oil company. Gideon Kanner has some good commentary on the decision here.

In Texas and many other states, public utilities and other “common carriers” have the power to use eminent domain to acquire land for their operations. In this case, however, Denbury, an oil company, sought to use eminent domain for a pipeline that would only transport carbon dioxide to and from its own facilities, without providing any service to the general public. In theory, the public would have the right to use the pipeline, but in practice no one but Denbury would have any reason to do so. The Texas Supreme Court quite rightly concluded that a “common carrier” taking must actually serve the general public, not just the carrier itself:

To qualify as a common carrier with the power of eminent domain, the pipeline must serve the public…. [E]xtending the power of eminent domain to the taking of property for a private use cannot survive constitutional scrutiny. The Denbury Green pipeline would not serve a public purpose if it were built and maintained only to transport gas belonging to Denbury from one Denbury site to another. As a constitutional matter, we can see no purpose other than a purely private one in such circumstances….

We accordingly hold that to qualify as a common carrier of CO2 under Chapter 111 [of Texas law], a reasonable probability must exist, at or before the time common-carrier status is challenged, that the pipeline will serve the public by transporting gas for customers who will either retain ownership of their gas or sell it to parties other than

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US Commission on Civil Rights Hearing on the Impact of Eminent Domain on Minority Groups

By on August 12, 2011 12:17 pm in Blight, Eminent Domain, Kelo, Post-Kelo Reform, Property Rights

Earlier today, I testified before the US Commission on Civil Rights at a hearing on the “Civil Rights Implications of Eminent Domain Abuse.” The other panelists were Georgetown law professor Peter Byrne, Hilary Shelton of the NAACP, and David Beito, a prominent historian and chair of the Alabama State Advisory Committee to the USSCR. A C-SPAN video of the event is available here.

I have previously written about the negative impact of blight and economic development takings on the minority poor here. I also discuss the issue in my recent article on “Federalism and Property Rights.”, where I point out that the political weakness of the minority poor who are the most common victims of eminent domain weakens the case for leaving property rights issues to the discretion of local political processes. [...]

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Federalism and Property Rights

By on August 10, 2011 9:26 pm in Blight, Eminent Domain, Federalism, Kelo, Property Rights

My recently published article “Federalism and Property Rights” is now available on SSRN. It’s part of the University of Chicago Legal Forum Symposium on Governance and Power. Here is the abstract:

Both the Supreme Court and leading legal scholars have often cited federalism as a reason to severely limit federal judicial enforcement of constitutional property rights. Defenders of the federalism rationale for judicial deference on property rights issues make two key arguments. One holds that abuses of property rights by state or local governments will be curbed by interjurisdictional competition, rendering judicial intervention unnecessary. The second is the superior knowledge and expertise of state and local governments relative to federal judges.

This article criticizes both claims. Part I explains why competitive federalism is unlikely to provide effective protection for property rights in land because property is an immobile asset. People who “vote with their feet” by leaving a jurisdiction cannot take their land with them. For this crucial reason, interjurisdictional competition will often fail to effectively protect property rights in land, though it may be more useful in the case of rights to mobile property.

Part II takes up the issue of diversity and expertise. While state and local governments may indeed have greater expertise than federal courts in assessing local conditions, federal judicial protection of property rights ultimately empowers not judges but property owners. It is the latter who will actually get to decide the uses of the land in question in cases where federal courts prevent state or local governments from condemning their property or restricting its use. Owners generally have greater knowledge of their land than local government officials do. Moreover, the local expertise rationale for judicial deference on property rights would, if applied consistently, justify judicial deference to state and local governments with respect to

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The Judicial Reaction to Kelo

By on May 31, 2011 5:43 pm in Blight, Eminent Domain, Kelo, Post-Kelo Reform, Property Rights

My article “The Judicial Reaction to Kelo” is now available on SSRN. It is the Introduction to the Albany Government Law Review Symposium on Eminent Domain in the United States, which includes contributions by several well-known eminent domain scholars including my colleague Steve Eagle, Amy Lavine, and David Schultz, among others.

Here is the abstract:

Kelo v. City of New London was one of the most controversial decisions in Supreme Court history, generating a massive political backlash that led 43 states to adopt eminent domain reform laws restricting economic development takings of the kind the Court ruled were constitutional. In addition to the better-known legislative reaction, Kelo was also followed by extensive additional property rights litigation in both federal and state courts. This is the first article to systematically analyze the judicial reaction to Kelo.

Part I briefly summarizes Kelo and its holding. Part II considers state court interpretations of their state constitutional public use clauses since Kelo. Most of these cases have repudiated Kelo, either banning economic development takings outright or significantly constraining them. Part III considers judicial interpretations of Kelo’s “pretext” standard. This is the one area where Kelo might potentially permit nontrivial public use constraints on condemnation. Kelo indicated that condemnations are unconstitutional if the officially stated rationale for the taking is a pretext “for the purpose of conferring a private benefit on a particular private party.” State and lower federal courts have not come to any consensus on what qualifies as a pretextual taking. Nevertheless, several decisions suggest that the pretext standard may have some bite.

Overall, state courts have taken a skeptical view of Kelo, often rejecting it as a guide to the interpretation of their state constitutions. This reaction continues the pre-Kelo trend of increasing judicial protection for property rights at

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A Victory for Property Rights in California “Blight” Case

By on April 29, 2011 3:10 am in Blight, Eminent Domain, Post-Kelo Reform, Property Rights

The Institute for Justice has won a victory in an important property rights case in National City California. The trial judge set aside the city’s “blight” designation of a massive area including almost 700 properties. Had the designation survived, it would have enabled the city to condemn any of these properties at will. Here is IJ’s statement on the case, and here is an article in which city officials seek to downplay the damage.

For reasons, I discussed in this post, the National City case is a particularly egregious example of the widespread phenomenon under which local governments use of dubious blight designations to condemn property and transfer it to politically influential developers and other interest groups. The City declared a vast area to be “blighted” on the basis of extremely dubious evidence, and then refused to even make the evidence available for public scrutiny.

The problem of blight condemnations is far from limited to California. In numerous states, broad definitions of “blight” have undermined post-Kelo eminent domain reforms supposedly intended to protect property owners against eminent domain abuse. If pretty much any area can be declared blighted and condemned, no one’s land is safe unless, of course, they have a lot of political clout.

The trial court ruling is only the first step in an ongoing legal battle. California courts are historically very deferential to blight condemnations, and it’s certainly possible that the trial court will be overruled, at least on some issues.

I may have more to say on this subject later. But for now, I must conclude, as my laptop battery is running low, while I wait for my connecting flight to Istanbul at the Vienna airport.

CONFLICT OF INTEREST WATCH: I have done pro bono work for the Institute for Justice on [...]

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Jerry Brown’s Proposal to Abolish California’s Redevelopment Agencies Would Help End Eminent Domain Abuse

By on March 26, 2011 10:24 pm in Blight, Eminent Domain, Liberaltarianism, Property Rights

As part of his plan to address California’s fiscal crisis, liberal Democratic Governor Jerry Brown has proposed abolishing California’s 400 local “redevelopment agencies,” which would save the state some $1.7 billion per year, an important step towards closing the state’s $25 billion annual deficit. Unfortunately, his plan has so far been stymied by opposition from California Republicans, all but one of whom voted against it in the California Assembly. Under the California state constitution, passage of the bill requires a two thirds majority in the state Assembly, and Brown fell one vote short.

The GOP’s stance on this issue is extremely unfortunate, and at odds with the Party’s supposed devotion to free markets and property rights. As Steven Greenhut, an expert on California property rights issues points out in a recent Wall Street Journal op ed, the redevelopment agencies are notorious for their abuses of the power of eminent domain for the benefit of powerful private interest groups:

[I]n the last 60-some years, redevelopment agencies have become fiefdoms that run up enormous debt and abuse eminent domain by transferring private property to large developers promising to build tax-generating bonanzas. Today, there are 749 such projects. In the late 1950s, there were only nine. According to the state controller, redevelopment agencies consume about 12% of all state-wide property taxes—money that would otherwise go to critical public services….

Palm Desert’s redevelopment agency proposed to eliminate so-called blight by spending nearly $17 million on revamping a municipal golf club that remains one of the nation’s premier golfing locales.

In the 12 years I’ve spent reporting on this issue, I’ve seen an agency attempt to bulldoze an entire residential neighborhood and transfer the land to a theme-park developer. I’ve witnessed agencies declare eminent domain against churches—which pay few taxes—in order to

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Two Important New Eminent Domain Cases

By on March 19, 2011 1:38 am in Blight, Eminent Domain, Property Rights

Ilya Shapiro (no relation) has a good post detailing two important new eminent domain cases. Both are being contested by the Institute for Justice, the libertarian public interest law firm that litigated Kelo v. City of New London and many other important property rights cases.

The National City case from California is yet another egregious instance of the abusive use of “blight” takings: The City has declared a large area “blighted” on extremely dubious grounds in order to transfer the land to an influential developer who wants to build luxury condos there. It was described in greater detail in this 2007 Sports Illustrated article.

CONFLICT OF INTEREST WATCH: I have done pro bono work for IJ on a number of other property rights cases, though not these two. [...]

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Fordham Law School Conference on Eminent Domain in New York

By on February 9, 2011 5:17 pm in Blight, Eminent Domain, Property Rights

This Friday, I will be speaking at an academic conference on eminent domain in New York at Fordham Law School, 140 W. 62nd Street. The event is sponsored by the Fordham Urban Law Journal. My panel will be at 10 AM, and I will be speaking about the New York Court of Appeals controversial recent blight condemnation decisions in the Atlantic Yards and Columbia cases.

The conference will also include presentations by many well-known property scholars, including Michael Heller, Lynne Sagalyn, Chris Serkin, and my colleague Steve Eagle. [...]

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Upcoming Talks in Madison, Wisconsin on the Individual Mandate and Property Rights

By on January 24, 2011 10:06 pm in Blight, Eminent Domain, Federalism, Federalist Society, Health Care, Individual Mandate, Kelo, Post-Kelo Reform, Property Rights

This Wednesday, I will be giving two talks in Madison, Wisconsin. One, sponsored by the Federalist Society Lawyers Division, will be at a panel on the Obamacare individual mandate litigation. The other two panelists are Wisconsin Attorney General J.B. Van Hollen (Wisconsin recently became one of the 28 states challenging the mandate in court) and Democratic state representative Jon Richards, who will defend the constitutionality of the mandate. It will be held at 11:30 AM. Logistical details available here.

My second talk will be at 6 PM at the University of Wisconsin Law School, in the Lubar Commons, and is sponsored by the Law School student Federalist Society chapter. It will be about Kelo v. City of New London, post-Kelo eminent domain reform, and recent judicial decisions on takings, especially the two big New York Court of Appeals decisions (the Atlantic Yards and Columbia cases).

VC readers are more than welcome to come to either or both events! [...]

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Supreme Court Refuses to Hear Columbia University Takings Case

By on December 15, 2010 1:02 am in Blight, Eminent Domain, Kelo, Post-Kelo Reform, Property Rights

Sadly, the Supreme Court has refused to hear the Columbia University blight takings case. This New York state supreme court decision was a particularly egregious instance of the abuse of “blight” condemnations to take property that was not blighted in any meaningful sense and transfer it to a powerful private interest group. I wrote an amicus brief on behalf of the Cato Institute, Institute for Justice, and the Becket Fund for Religious Liberty urging the Court to take the case. As we pointed out in the brief, the case represented a valuable opportunity for the Court to clear up the massive confusion in state and federal courts over the issue of what qualifies as an unconstitutional “pretextual taking” – a condemnation where the official rationale is a mere pretext for a scheme to benefit a private party. Even in Kelo v. City of New London, the Supreme Court emphasized that such pretextual takings are still forbidden by Public Use Clause of the Fifth Amendment. But it gave very little guidance on the question of what counts as “pretextual.”

I share Megan McArdle’s frustration about the Court’s refusal to take the case. But I do quarrel somewhat with her lament that “this is an issue that only fires up libertarians.” Among the amicus briefs urging the Court to take the case was this one, by liberal Democratic New York state Senator Bill Perkins, a prominent critic of eminent domain abuse in the state. The Becket Fund, one of my own clients in this case, is certainly not a libertarian organization. More broadly, among those strongly opposing the Kelo decision were such liberal groups and activists as the NAACP, the Southern Christian Leadership Conference, Ralph Nader, Howard Dean, and Representative Maxine Waters, as well as various [...]

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Our Amicus Brief Urging the Supreme Court to hear the Columbia University “Blight” Takings Case

By on October 28, 2010 10:58 am in Blight, Eminent Domain, Kelo, Post-Kelo Reform, Property Rights

I recently wrote an amicus brief urging the Supreme Court to hear the Columbia University blight takings case, on behalf of the Institute for Justice (the public interest law firm that litigated Kelo v. City of New London, among many other important property rights cases), The Becket Fund for Religious Liberty, and the Cato Institute. The brief is available here. As I explained in this post, the New York Court of Appeals’ decision in the Columbia case is an extreme example of a very common problem: the use of dubious “blight” condemnations to transfer property from the politically weak to the locally powerful interest groups – in this case a major university.

The case also represents an important opportunity for the Court to address a major unresolved issue in eminent domain law. In Kelo, the majority ruled that “economic development” counts as a public use that justifies the use of eminent domain to transfer property to private parties. But the Court also noted that “pretextual” takings – condemnations where the official rationale is “a mere pretext…. when [the] actual purpose was to bestow a private benefit” – are unconstitutional. Unfortunately, the Court was extremely unclear about what qualifies as a pretextual taking. As we explain in Part I of the brief, lower federal courts and state supreme courts have been all over the map in trying to develop rules for what counts as a pretext. The New York Court of Appeals decision in the Columbia case is at an extreme end of a continuum, defining pretext so narrowly that it is almost impossible to imagine a successful pretext case. Other courts – including the supreme courts of Pennsylvania, Hawaii, Rhode Island, and the District of Columbia, and the federal Ninth Circuit – have defined pretext more [...]

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“Blight” Condemnations in Alabama

By on August 3, 2010 11:43 pm in Blight, Eminent Domain, Post-Kelo Reform, Property Rights

Historian David Beito, chair of the Alabama Advisory Committee to the US Commission on Civil Rights, has an interesting post documenting the abuse of “blight” condemnations in Montgomery, Alabama:

“[E]minent domain through the back door” has become commonplace in Montgomery, the cradle of the modern civil rights movement. Under this system, Montgomery has demolished homes without the normal due process of conventional eminent domainand often gives little notice. The city alleges that these homes are “blighted” but, as the story on Jimmy McCall shows, at least some are in excellent repeir.

Typically, under eminent domain through the back door, the city of Montgomery bills the owner for the cost of demolition and he or she is left with an essentially worthless property. The victims are often low-income blacks, many of home live near or in Rosa Parks old neighborhood.

Beito and I described the broader implications of these kinds of takings in this 2008 op ed. Unfortunately, abusive blight takings are not confined to Alabama. They are a serious problem in many parts of the country. For example, New York’s highest court recently upheld two such condemnations in the Atlantic Yards and Columbia cases. Unlike many other states, Alabama has actually passed a fairly strong post-Kelo eminent domain reform law that defines blight relatively narrowly and forbids condemnations that transfer land to private owners for pure “economic development” purposes (see my analysis of that law and other states’ reforms this article). Unfortunately, sometimes the law on the books is one thing and enforcement is another. [...]

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Universities and Eminent Domain

By on June 25, 2010 12:41 am in Blight, Eminent Domain, Kelo, Post-Kelo Reform, Property Rights

In Kaur v. New York Urban Development Corporation, its recent decision upholding the condemnation of property for transfer to Columbia University, the New York Court of Appeals claimed that the use of eminent domain to transfer land to a private university is more defensible than its use to transfer land to commercial corporations, as in the Atlantic Yards case:

Unlike the [New Jersey] Nets basketball franchise [one of the key beneficiaries of the Atlantic Yards takings], Columbia University, though private, operates as a non-profit educational corporation. Thus, the concern that a private enterprise will be profiting through eminent domain is not present. Rather, the purpose of the Project is unquestionably to promote education and academic research while providing public benefits to the local community. Indeed, the advancement of higher education is the quintessential example of a “civic purpose”…. It is fundamental that education and the expansion of knowledge are pivotal government interests.

I think this line of argument is seriously flawed. I tried to explain why in one of my earliest posts on the Columbia University takings back in 2006:

…Columbia President Lee Bollinger and [others] defend the use of eminent domain to transfer property to universities on the ground that universities create “public benefits.” While universities do provide important benefits to society, this does not justify allowing them to condemn property.

Most of the benefits provided by universities are “private goods” that are fully captured by their students and faculty. For example, going to college greatly increases a student’s earning prospects, but that student will himself capture the benefits. Basic economics shows that there is no need for government subsidies for these kinds of private goods.

Universities do also provide some “public goods” – benefits to society that the university, its faculty, and its students cannot fully

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New York High Court Upholds Columbia University Takings

By on June 24, 2010 5:44 pm in Blight, Eminent Domain, Kelo, Post-Kelo Reform, Property Rights

In today’s decision in Kaur v. New York State Urban Development Corp., The New York Court of Appeals (the state’s highest court) has upheld the condemnation of property in the Manhattanville area of New York City for transfer to Columbia University. This outcome is not surprising. In fact, I predicted it back in December. In the recent Atlantic Yards case, the Court of Appeals had already held that state and local officials could declare virtually any area “blighted” and thereby make it eligible for condemnation and transfer to favored private interest groups.

Nonetheless, there are several extremely troubling aspects of this case. As in the Atlantic Yards decision, the court upheld an extremely dubious “blight” condemnation by applying a rule holding that any area could be declared blighted so long as it might be “underdeveloped.” Indeed, even the presence of underdevelopment (a phenomenon that occurs in almost every neighborhood at one time or another) need not actually be proven. Instead, the government need only show that there is “room for reasonable difference of opinion as to whether an area is blighted.” As the lower court opinion in Kaur pointed out, this kind of lax standard would allow the city to declare “[v]irtually every neighborhood in the five boroughs” blighted. And, as I pointed out in this post, the court’s position makes a mockery of the New York state constitution, which allows blight condemnations only in “substandard and insanitary areas.”

Even worse, the Court of Appeals in Kaur brushed aside or completely ignored extensive evidence showing that the blight study justifying the condemnations had been rigged in Columbia’s favor and that Columbia itself was likely responsible for most of the “blighted” conditions. The key “blight” study was conducted by AKRF, a consulting firm hired by Columbia. As [...]

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Property Rights Five Years After Kelo

By on June 23, 2010 4:23 pm in Blight, Eminent Domain, Kelo, Post-Kelo Reform, Property Rights

Today is the fifth anniversary of Kelo v. City of New London, one of the most controversial decisions in Supreme Court history. In Kelo, a narrow 5-4 majority of the Court ruled that the condemnation of private property for transfer to other private individuals for purposes of promoting “economic development” was permitted by the Fifth Amendment, which allows government to condemn property only for a “public use.” Kelo was a flawed decision and it drew a massive political backlash. There are lesson to be learned from both.

I. The Shortcomings of Kelo.

In my view, Kelo was wrong both because it goes against the text and original meaning of the Constitution and because it embodies an unrealistic view of the political process. On the former point, this article by leading property rights historian Jim Ely does a good job of summarizing the relevant historical evidence. The Founders and early 18th and 19th century jurists disagreed among themselves about the exact meaning of “public use.” But there was widespread agreement that government lacked the power to condemn property owned by one private individuals and transfer it to another merely because the government claimed there might be some sort of public benefit.

Kelo was also mistaken because the majority justices wrongly assumed that the existence of a “plan” would minimize the likelihood that private interests would exploit the condemnation process to take from the politically weak. In reality, the political process makes it very easy for this to happen, as voters have great difficulty monitoring the quality of economic development takings. Moreover, the new owners of condemned property generally have no legal obligation to actually provide the economic benefits that supposedly justified the condemnation in the first place. This predictably results in condemnations that not treat property owners unjustly, [...]

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