North Carolina’s State House passed HB 3 which attempts to limit eminent domain powers. The bill, which has 69 House sponsors and co-sponsors, would add language to the North Carolina constitution specifying that local and state governments can take private property with “just compensation” only for a “public use” and would guarantee a jury trial if requested by the condemnee. Sponsor Rep. Chuck McGrady, stated his belief that these requirements are already in North Carolina law, but unlike most states, are not in its constitution. It is the first step towards a ballot measure to amend the NC Constitution.
The US Constitution – and many other state constitutions – have a “public use” requirement that must be satisfied before the power of eminent domain can be exercised. However, federal law – most notably restated in the infamous Kelo case, holds that the term “public use” means “public purpose” and does not mean that the public must be permitted to use the condemned property. Rep. McGrady stated, “Some courts have talked in terms of a public purpose or public benefit, and with time, the test has gotten rather fuzzy or has morphed.” “The bill will mean that a public use does not mean the taking of property in order to convey an interest in that property for economic development,” McGrady said. “We’re not trying to make new law here. We’re just trying to make sure North Carolina’s law stays what it is.”
Nearly identical provisions passed the House in 2013 and 2014 by overwhelming margins, and similar bills won House approval in prior years, but Senate leaders have refused to take up the matter. It is currently in the Senate Rules Committee. If passed by the NC Senate it will allow a ballot measure to amend the State constitution.
According to Interthinx, Inc., a subsidiary of First American Financial Corporation, the “National Mortgage Fraud Risk Index” increased 3 percent from the last quarter, and is unchanged from one year ago. However, the “Property Valuation Fraud Risk Index is down 2 percent from Q3 2014. According to the report, Florida is the riskiest state this quarter with Property Valuation and Occupancy Fraud Risk being the main drivers of Florida’s overall risk index. Mortgage fraud risk is also rising in MSAs in Texas, Oklahoma, Kansas and the Dakotas.
Legislation making it more difficult for private utilities to acquire access to private property through condemnation cleared two Iowa subcommittees. Subcommittees in both the Iowa House and Senate approved Senate Study Bill 1276 to change the process for private companies to build underground pipelines and overhead transmission lines. The bill, according to House Government Oversight Committee Chairman Bobby Kaufmann, R-Wilton, would require projects be recommended in the Iowa Economic Development Authority’s annual energy report and that proponents pay attorney fees for landowners who cannot afford their own attorney. It would prohibit companies from telling landowners that unless they sign voluntary easements their land will be condemned and they will be paid less for their land. In addition, SSB 1276 would require companies to get voluntary easements from 75 percent of the landowners in the path of their projects before the Iowa Utilities Board would consider a request for condemnation.
The Bill now moves to the full House and Senate.
The VA Supreme Court recently heard an interesting case involving facts that should be cautionary to litigants. In that case, VDOT made an initial offer to the property owners of $246,292 based on an appraisal. When the condemnees rejected the offer, VDOT obtained another appraisal estimating the damages at $92,127. VDOT told the condemnees that they could either accept the offer or VDOT would only present the lower appraisal at trial.
The condemnees would not agree to the initial offer and at trial the jurors were only allowed to hear the lower value. The condemnees ultimately appealed to the VA Supreme Court alleging, in essence, that the VDOT engaged in an improper use of its power and the jurors should be permitted to hear the story of the negotiations. The Court agreed and held that allowing the jury to hear the whole story – the initial appraisal and the state’s explanation for why subsequent appraisals were less – provides a “limited and wholly appropriate check on the broad powers of the state in condemnation proceedings.” The justices ordered a new trial for the condemnees.
The Florida Supreme Court is considering whether a statute used to calculate attorneys’ fees in Florida eminent domain cases is unconstitutional when applied in the event of excessive litigation by the condemning authority. The condemnor in that case is the Central Florida Expressway Authority and the jury returned a verdict valuing the property at more than $5.7 million. The court found that the counsel for the property owners obtained a benefit of $832,000 for their clients after considering the difference between the original offer and the verdict. The Florida fee award statute mandated a fee award of close to $228,000 and the attorneys also were to receive nearly $118,000 pursuant to their contract with the owners.
The property owners argued the statutory fee was unconstitutionally low due the number of hours expended to respond to allegedly excessive litigation by the Expressway Authority. The case is Joseph B. Doerr Trust et al. v. Central Florida Expressway Authority et al., case number SC14-1007, in the Supreme Court of Florida.
New London, Connecticut Mayor Daryl Finizio recently signed an agreement authorizing the construction of a “memorial park” on the former site of Susette Kelo’s “little pink house,” one of the fifteen residential properties condemned by the city as part in the famous Kelo v. City of New London case. That Supreme Court case held that it was not unconstitutional to condemn properties for economic development and unleashed a firestorm of negative reaction.
In his State of the City address Tuesday evening, Mayor Daryl Justin Finizio announced that he and the Renaissance City Development Association have reached an agreement that would remove Kelo’s former property from consideration for any future development.
After the firestorm, the plans were abandoned and the condemned property was never developed and remains vacant.
An installation about eminent domain by Matt Rahner at the Kansas City Public Library in downtown Kansas City focuses on four blocks of Eminent Domain history that were cleared to make way for a new East Patrol police station and crime lab. The installation will be open to the public beginning Saturday, March 21, and runs through May 31, 2015. Read more here: http://www.kansascity.com/news/local/article15541937.html#storylink=cpy
A Texas state senator introduced a bill seeking to prevent the use of eminent domain to take private property for public projects. TX SB 479 creates a stricter pool of defined project milestones that government entities would have to hit to prove they are making progress toward the stated public use, according to Texas State Senator Charles Schwertner, R-Georgetown, who proposed the bill. “It’s important that the legislature reestablish the rights of private property owners, prevent government abuse, and encourage more timely use of property acquired through eminent domain. While eminent domain is commonly used for the greater good, it’s a power that can be easily abused,” Schwertner said in a statement.
SB 479 is intended to build on a 2011 law requiring “actual progress” be made to hold land via eminent domain. If there is no such progress, the property owner may buy back the condemned land. Schwertner contends a more stringent set of definitions is necessary to prevent abuse of eminent domain and to protect landowners’ rights.
SB 479 bumps up the number of necessary milestones that a government entity would have to hit to continue exercising eminent domain from two major benchmarks to three. The possible milestones allowed under Schwertner’s bill include performing significant labor on the property, purchasing development materials, applying for state or federal funds, procuring the services of an expert needed for the project — such as an architect, engineer or surveyor — or applying for a state or federal permit for the development.
New York City Planning Director Carl Weisbrod recently stated that the City’s redevelopment plans won’t involve the use of eminent domain to acquire property. The planning priorities include building more affordable housing and rezoning a five-block stretch of midtown Manhattan adjacent to Grand Central Terminal. “I don’t see us using eminent domain in a broad way,” Weisbrod told a real estate conference hosted by Crain’s New York Business. “I don’t believe that it’s going to be in our toolbox.”
You may recall a prior blog post regarding a case where we proved a “de facto” taking of a property. A “de facto” condemnation – sometimes known as an “inverse condemnation” – occurs when a condemnor’s actions cause the equivalent of a taking before a declaration of taking is filed. Our client was in the process of developing a property for residential condominiums. PennDOT did not initiate a condemnation action until May, 2009. We established that PennDOT’s actions caused a taking in December 2006. As a result, the property will now be valued as of December 2006 and not May 2009.
We recently tried the damages part of the case before a “Board of View.” PennDOT alleged the value of the condemned property was $6.75 million. We presented evidence that the value was $25 million. The Board entered an award of $22.5 million.
One other benefit of our de facto win is the amount of delay compensation – interest – owed to the property owner. It will now be calculated beginning in December 2006 as opposed to 2009. The amount will be substantial.
PennDOT will undoubtedly appeal.