EMINENT DOMAIN, THE BASICS

In the U.S., eminent domain refers to the government’s power to appropriate private property for public use without the owner’s consent. Eminent domain is most commonly used when the acquisition of private property is necessary for the completion of a public project such as a road, and the owner of the required property is unwilling to negotiate a price for its sale. The Fifth Amendment of the U.S. Constitution requires that just compensation be paid when the power of eminent domain is used, and requires that “public use” of the property be demonstrated. Over the years the defi nition of “public use” has expanded to include economic development plans, which use eminent domain for the purpose of generating more tax revenue for the local government. In 1981, the Michigan Supreme Court, building on the precedent set by Berman v. Parker, 348 U.S. 26 (1954), permitted the Detroit neighborhood of Poletown to be taken in order to build a General Motors plant. This expansion of the defi nition was argued before the United States Supreme Court in February 2005, in Kelo v. City of New London, a case in which homeowners fought the City of New London’s attempt to use eminent domain to seize their property for the development of a Pfi zer biotech park. In June 2005, the Supreme Court issued its decision in favor of New London, ruling that private property may be con- demned by eminent domain and used for private development projects that are predicted to have a “public benefi t,” such as the creation of jobs or the generation of increased tax revenue. In her dissent on the case, Justice O’Connor wrote: “Any property may now be taken for the benefi t of another private party, but the fallout from this decision will not be random. The benefi ciaries are likely to be those citizens with disproportionate infl uence and power in the political process, including large corporations and development fi rms. As for the victims, the government now has license to transfer prop- erty from those with fewer resources to those with more. The Founders cannot have intended this perverse result.”