Saturday, March 17, 2012

How Eminent Domain Perverts Legal System

Fry’s Spring Condemnation…1st of 1 reading. Sale of Elliott Avenue Property…1st of 2 readings. What's wrong with this picture? Monday’s Agenda Items 4 and 5 illustrate a problem. Private property can be taken at a single, surprise City Council meeting. But public property requires two meetings to sell. (More on Fry's Spring at end of article.)

Charlottesville, Va. – Does eminent domain deny your day in court? Or does it guarantee your day in court? That question came up Friday Mar. 9 on the Neal Boortz radio talk show aired on WINA AM-1070 around 11:15 a.m.

Liberal caller Joe asserts that eminent domain for the Keystone Pipeline would deny people’s day in court. But Neal claims that “by definition” eminent domain guarantees your day in court. Instead of explaining or giving examples, Neal goes off with name-calling and appeals to authority. Neal has 42 years experience watching eminent domain cases. And Neal is an attorney. At some point Neal will have to correct the misstatement.

Of course, Joe is right. How many courtroom dramas have we all seen or read where due process is on display, the rights of the accused and burden of proof of the accuser? But has anyone seen a movie or read a book where someone is charged with eminent domain? There are a few on the subject, such as the 1939 film Jesse James where actor Henry Fonda robs trains to avenge the unjust taking of his mother’s farm by the railroad. And the line from Blazing Saddles: If you look up "land snatching" in the dictionary, the ways to snatch land go on for a few pages.

Around 1900 most states reformed eminent domain laws to stop those abuses. But the pendulum swung the other way beginning with the Great Depression. By the 1950s cities could seize and sell any property designated as "blighted", which began the decline of American cities. In 2005 the Supreme Court ruled 5 to 4 that private use is public use if there’s a public purpose. All private property serves a public purpose by paying taxes. Since the infamous ruling, there’s been a new wave of reforms including Virginia’s amendment on the ballot this November.

Most people know there are 3 branches of government. But few people know there’s a 3-step process to take property. Eminent domain is only 2 steps because no crime is alleged.

Due Process / Rule of Law

(1) Legislative branch passes a law.
(2) Executive branch accuses someone of breaking the law.
(3) Judicial branch decides guilt/innocence and how much life/liberty/property the executive should take to fit the crime. The court also determines whether steps 1 and 2 were followed properly; if not, case dismissed even if you’re guilty.

Eminent Domain / Public Use / Just Compensation

(1) Legislative branch passes a law (ordinance) with your name on it.
(2) Executive branch seizes your property.
( ) In order to have your day in court, the owner must sue the government. The system is flipped on its head when government agents coming for your stuff are presumed innocent, but the victim is presumed to be the false accuser. Judicial branch defers to Legislative branch on most issues because the legislature funds the courts.

Remember the 2005 case that sparked the recent eminent domain reforms. It was called “Suzette Kelo vs. New London, CT” because Kelo had to sue to have her day in court. It was not called “New London vs. Kelo” although that may be the reality. By far, most cases never go to court because few have the resources to pay for it. If not for the Institute for Justice financing this case, we never would have heard of Suzette Kelo.

To address the expense of defending (suing) against eminent domain, most recent reforms have tweaked just compensation to include lawyers’ fees if the “accused” wins the case. But if you lose, which is more likely, you’ll be under a mountain of debt in addition to losing your home or business. Just compensation is the amount that would justify the violation (omission) of your due process if taken for a true public use.

Local Examples of Eminent Domain

704 Montrose Avenue in Belmont. How did the non-judicial, 2-step process play out last year? We learned how City Council is all-powerful when it comes to eminent domain. They pass the laws and they adjudicate the laws they pass. There’s no judicial oversight, no third step, no due process. The owner would have to sue for his day in court. He could argue blight abatement is not a public use, therefore his due process civil rights are violated by not turning the case over to local courts and district attorney.

What was the just compensation? The owner of the blighted house was billed $10,000 for the demolition and was allowed to keep the parcel of land. City Council tried the case in public meetings and ordered the demolition Sep. 19, which occurred Nov. 17. The case was prosecuted by housing/building code inspectors. The property owner pleaded guilty to the blight and that circumstances had overtaken him.

Why is the 2-step preferred over the 3-step process, other than being simpler and concentrating power in one branch? Property taken by a court through due process is sold at a police auction to prevent corruption. But there’s no auction to sell “surplus public land,” thus guaranteeing corruption. Local examples are too numerous to list but are documented here and in City Council agendas, minutes and video online.

110 Parking Spaces at Kmart. In this case Kmart’s landlord asked Council to seize land the landlord had already agreed to give to the City for Hillsdale Drive Extended as a proffer for approving the Whole Foods development. With eminent domain, landlord Meadowbrook Creek would not have to renegotiate the lease with tenant Kmart. Landlord can say, “Act of God: Eminent Domain. Here’s the money we gave to Council to give to Kmart so we won’t have to deal with Kmart.”

The No-Name Neighborhood. The eminent domain abuse of this part of town four decades ago is still so controversial that it has lost its name. Now it can only be referred to in relation to a nearby location whose name you can say. The “area south of the railroad tracks” is the city’s largest but least successful urban renewal project. Council wants someone new to come up with a new, magic plan that will be successful and remain outside the rule of law and due process.

How does controversy around eminent domain abuse linger forever while legitimate eminent domain is forgotten? Because violating due process is a felony. And felonies have no statute of limitations. We know this because of TV shows like “Cold Case” where murder (taking life without due process) can be prosecuted many years later. Other felonies have no expiration date, such as kidnapping, molestation, slavery (taking liberty without due process.)

But nowadays a different standard is applied to real estate. It has become customary and traditional to use eminent domain for property. It has the advantage that the seizing agency can cherry-pick the new owner and subsidize the property transfer. They low-ball the offer to take the property citing care of taxpayer funds, but don’t sell to the highest bidder property they’ve seized for someone else.

Fry’s Spring Beach Club. To widen a road used by any and all members of the public, the City wants a piece of the beach club. In this case, the club agrees the stated reason is a bona fide public use. But they dispute the just compensation. The club wants fair market value. Over the years new terms were substituted for the Constitutional terms. Then eminent domain was expanded arguing from the new terms. “Fair market value” might have been adopted because it has “fair” in the name. Eminent domain is inherently unfair. So it makes some weird psychological sense it would be the rhetorical name for just compensation.

The negotiation is typical funny business. City offers $11,100. Beach Club wants $350,000. City’s final offer $24,500 after City hires an independent appraiser to say the land value is zero ($24,360 for land minus $24,360 for improvement.) The City is confusing easement with eminent domain. Easement allows public use while owner retains the land. Eminent domain is an acquisition of title. Other shenanigans: “The board of the Beach Club has been involved in multiple discussions so the need to use their property has not been unknown.” Sounds like this is the first notification of eminent domain.

March 19, 2012 City Council with background materials.
Live Video of City Council March 19, 2012 and other dates.


By definition, eminent domain denies your day in court. Will Neal defend his position and point out where this article is wrong? Or will he simply go off on Blair’s Blog for making the arguments above? Neal’s misstatement was an opportunity to inform more people on the Constitutional limits of capitalism.

The 3-step process causes prosperity. The 2-step process causes poverty.


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