The Condemned: The Power of Eminent Domain

Harper J. Dimmerman, Esq. on 05/10/2010

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There is an inherent limitation regarding the power of eminent domain.  On paper, it seems reasonable that governmental entities would need the flexibility and autonomy to acquire private property, for the sake of infrastructural enhancements and progress in general.  Yet defining the concept of public use has never seemed so controversial, in a economic environment where the boundaries between private and public appear so blurred. 

Take the Obama mortgage rescue attempts for instance or the bailouts or the health care reform initiatives.  Conservative pundits, politicians and other talking heads, in no particular order, purport to take offense to the government’s intermeddling in private industry.  Whether or not these efforts have occasionally crossed the line you will is a complex debate and one for another day.  Yet the very prominence of this so-called “line” speaks volumes about the oftentimes subjective demarcations. 

Consider a couple of the hot condemnation cases being bandied about in the media and articles like this.  The first is the Campbell’s Soup case.  For those of you familiar with Admiral Wilson Boulevard (the highway which leads to cheap gas and adult beverages), there is a huge white architecturally inappropriate monstrosity mugging for all the speed racers to see, in all of its dilapidated splendor.  Well it turns out that a hip hop Horatio Alger type of businessman acquired it, intending to fire the first warning shot in city of Camden’s revitalization run.   Campbell’s has been doing its darnedest to nab it, looking to convert it to offices or the like.  Yet the owner refuses to yield, unwilling to settle for “just” compensation, as constitutionally required.  Clearly Campbell’s position that its acquisition would be part of a greater good, a stimulus to the local economy and what could be the beginning of a dramatic change in that landscape, is self-serving at best.  Plus there’s the potential Kelo problem, assuming it can get over the private/public hurdle, which I believe it will.  What if the war is ultimately won by Campbell’s, a few years down the line, and Campbell’s decides not to proceed with the expansion?  Then what?  Will the condemnation efforts be all for naught?  Or is ridding the area of this entrepreneur, who some may believe is selfishly stonewalling inevitable progress, necessary regardless?  

It is undeniable that bad things can happen when governments permit themselves to be swayed by behemoth corporations, assuredly with the deep pockets to do wonders for any particular locality, if they so desire.  How about the case of Donald Pulver?  A developer in Conshohocken who’d been trying to grab a special piece of property for more than the past twenty years or so.  Just this past February, after a tortured negotiation, he finally struck a deal with the owners for 10 million bucks; the sellers originally acquired it for only $135,000.  But don’t think for a second a mogul like Mr. Pulver wasn’t exploring other less costly and less time-consuming alternatives as he went.  Rumor has it that he persuaded the Redevelopment Authority of Montgomery County to condemn the subject parcel through eminent domain.  The Commonwealth Court eventually sided with the landowners and the state Supreme Court refused to entertain the Authority’s appeal.  That matter prompted a civil rights suit, currently pending in the US Court of Appeals for the Third Circuit.   

On one end of the spectrum, you have seeming favoritism for big business and takings equating to virtual windfalls.  And on the other, there are the cases of just compensation which are challenged for being too rich.  Right now, New Jersey’s Supreme Court is weighing the arguments in an important inverse condemnation matter.  In Klumpp v. Borough of Avalon, the borough constructed sand dunes and vacated access roads to private property.  No formal condemnation was ever filed and no notice of a taking was ever provided.   In another Jersey shore (no reference intended) matter, a couple in Long Beach Island was awarded close to a half million dollars for an easement.  Apparently the three million dollar digs, a vacation home mind you, happens to be situated on a corner lot where the Army Corps of Engineers intended to create a protective sand dune.  Amazingly, the easement was originally valued at $300 dollar for the 8,500 square-foot strip.  The municipal appraiser considered the project’s benefit for various landowners versus the loss of the couple’s view from their first floor and through some sort of miraculous public benefit analysis arrived at a pathetically low number.     

Perhaps the most obvious limitation with condemnation seems to be delineating what even qualifies as a public purpose.  Clearly the fact that private enterprise stands to benefit from the process does not necessarily render that process unconstitutional.  That seems inevitable.  But the does the potential for economic redevelopment truly justify the taking of private property toward that end?  What makes one large company’s arguments more persuasive than a significantly smaller ones?  And even if the greater good outweighs everything else, why wouldn’t the little guy be entitled to a bonus for having the vision (or not) to own in an undesirable and then suddenly desirable location?  Since when did being in the right place at the place become a bad thing?  So long as large private industry is prevented from behaving like government, more equitable results will follow.  Yet when they upset the balance, the public/private distinction becomes particularly tricky.  And of course the larger question is should they be permitted to?  Maybe financial prosperity for us all hinges on big business being permitted to throw their weight around.